Investment Thesis
AECOM demonstrates stable revenue with modest profitability, but faces headwinds from declining net income and weak cash generation relative to asset base. The company's thin 1.9% net margin and concerning 0.6% ROA indicate inefficient asset utilization, while moderate leverage at 1.18x debt-to-equity and adequate interest coverage of 2.5x provide some financial stability.
ACM Strengths
- Solid liquidity position with 1.10x current ratio and $1.2B cash reserves
- Positive free cash flow of $41.9M demonstrates ability to generate cash despite margins
- Operating margin expansion to 5.8% shows some operational discipline
ACM Risks
- Net income declined 11.7% YoY despite flat revenue growth, indicating margin compression
- Extremely low profitability metrics (1.9% net margin, 0.6% ROA) suggest operational inefficiencies
- Elevated leverage at 1.18x debt-to-equity with modest 2.5x interest coverage limits financial flexibility
- Free cash flow margin of only 1.1% relative to $3.8B revenue is inadequate for debt service and growth
- Minimal ROE of 3.3% indicates poor returns on shareholder capital
Key Metrics to Watch
- Operating margin trend and ability to sustain 5.8% level
- Free cash flow conversion and working capital management efficiency
- Debt-to-equity ratio trajectory and refinancing requirements for $2.6B long-term debt
- Revenue growth acceleration and gross margin stability at 7.3%
- Return on assets improvement from current 0.6% baseline
ACM Financial Metrics
ACM Profitability Ratios
ACM Balance Sheet & Liquidity
ACM 5-Year Financial Trend
5-Year Trend Summary: AECOM's revenue has grown significantly by 18% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.39 reflects profitable operations.
ACM Growth Metrics (YoY)
ACM Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.8B | $74.5M | $0.56 |
| Q3 2025 | $4.2B | $131.0M | $0.98 |
| Q2 2025 | $3.8B | $1.0M | $0.01 |
| Q1 2025 | $3.9B | $94.4M | $0.69 |
| Q3 2024 | $3.7B | $29.9M | $0.21 |
| Q2 2024 | $3.5B | $1.0M | $0.01 |
| Q1 2024 | $3.4B | $87.9M | $0.63 |
| Q3 2023 | $3.2B | $29.9M | $0.21 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
ACM Capital Allocation
ACM SEC Filings
Access official SEC EDGAR filings for AECOM (CIK: 0000868857)