AECOM (ACM) Buy or Sell Stock Guide

Last updated: Oct 12, '19

Are you looking for the analysis of AECOM (ACM) stock? Are you wondering what the bulls and the bears say about it?

If so, you came to the right place. In this stock guide, we will share with you 8 reasons to buy and 7 reasons to sell ACM stock. You’ll get a perspective on what the bulls and the bears say about it.

The analysis below may be also helpful to you if you have any of the following questions about ACM stock:

  • Is ACM a buy or a sell?
  • Should I sell or hold ACM stock today?
  • Is ACM a good buy / investment?
  • What are ACM analyst opinions, recommendations and ratings?

Let’s start with the bull case. Here are the reasons to buy ACM stock:

1. AECOM is well positioned to benefit from rising infrastructure demand, with broad capabilities in design, engineering, project management, and direct construction to serve federal, state, and local level infrastructure.

2. AECOM's purchase of Hunt Construction in 2015 positioned it as one of the few E&C's with design-build capabilities for major sports venues and event destinations.

3. Through its AECOM Capital unit, the company is one of the relatively few E&Cs to embrace infrastructure-based public-private partnerships, a segment with high growth and economic moat potential.

4. ACM forward P/E ratio is 10.93, and it’s low compared to its industry peers’ P/E ratios. See ACM forward P/E ratio chart.

5. ACM Price/Book ratio is 1.32, and it’s low compared to its industry peers’ P/B ratios. See ACM forward Price/Book ratio chart.

6. ACM Price/Sales ratio is 0.28, and it’s low compared to its industry peers’ P/S ratios. See ACM forward Price/Sales ratio chart.

7. ACM PEG ratio (P/E adjusted for growth) is 1.34, and it’s low compared to its industry peers’ PEG ratios. See ACM PEG chart.

8. ACM average analyst rating is Buy. See ACM analyst rating chart.

Now that you understand the bull case, let’s look at the reasons to sell ACM stock (i.e., the bear case):

1. Almost two thirds of AECOM's business is from government entities, both in the U.S. and abroad. Delays in expected federal incentives for infrastructure spending could lead to shortfalls in demand and disappoint investors.

2. After nearly three years and more than $600 million in integration and restructuring costs, it is hard to pinpoint the major cost savings from the URS acquisition in reported results.

3. AECOM's Oil and Gas business is heavily tied to unconventional energy sources in the U.S. and Canada and has significantly declined the past few years along with global oil prices.

4. ACM quarterly revenue growth was -3.30%, lower than the industry and sector average revenue growth (3.70% and 3.07%, respectively). See ACM revenue growth chart.

5. ACM profitability is declining. The YoY profit margin change was -1.19 percentage points. See ACM profitability chart.

6. ACM short share of float is 5.07%. The stock is much more frequently shorted than the average industry, sector or S&P 500 stock. See ACM short share of float chart.

7. ACM short interest (days to cover the shorts) ratio is 6.77. The stock garners more short interest than the average industry, sector or S&P 500 stock. See ACM short interest ratio chart.

Now let's look at the key statistics for ACM:

Metrics ACM
Price $41.02
Average Price Target / Upside $39.11 / -4.66%
Average Analyst Rating Buy
Industry Engineering & Construction
Sector Industrials
Number of Employees 87,000
Market Cap $6.23B
Forward P/E Ratio 11.97
Price/Book Ratio 0.31
PEG 1.36
Revenue (TTM) $20.36B
YoY Quarterly Revenue Growth -3.3%
Profit Margin 1.46%

What are your thoughts on ACM?

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