ACM - AECOM: Secular Cash Flows Support Margin Expansion Despite Scale Challenges
2023-05-02 21:16:18 ET
Summary
- In the past year, AECOM has experienced 19.12% share price growth, in contrast to SPY (+0.46%) and the general construction industry (+6.02%).
- This occurred in spite of macroeconomic challenges, such as inflation, rising interest rates, etc. with high impact on the construction industry.
- While the company's net revenues have declined in the trailing 5 years, its net income has grown substantially, and free cash flow has remained stable.
- AECOM's lean infrastructure consultancy strategy, alongside superior talent attraction and a strong relationship with the government, has contributed to this success.
- As such, despite the rally of the past year, the market's chronic inability to adequately price AECOM's operation success leads me to rate the company a 'buy'.
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AECOM: Secular Cash Flows Support Margin Expansion Despite Scale Challenges