Breaking Down ABM Industries Incorporated (ABM) Financial Health: Key Insights for Investors

Breaking Down ABM Industries Incorporated (ABM) Financial Health: Key Insights for Investors

US | Industrials | Specialty Business Services | NYSE

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Understanding ABM Industries Incorporated (ABM) Revenue Streams

Revenue Analysis

The company's revenue streams encompass multiple business segments with detailed financial performance metrics:

Business Segment Annual Revenue Percentage of Total Revenue
Facility Services $2.41 billion 62.3%
Business & Industrial Services $830 million 21.4%
Technology & Infrastructure Services $525 million 13.5%
Energy Services $125 million 3.2%

Revenue growth analysis reveals:

  • Total annual revenue: $3.87 billion
  • Year-over-year revenue growth: 5.2%
  • Compound annual growth rate (CAGR): 4.8%

Geographic revenue distribution highlights:

  • United States: 92.6%
  • International markets: 7.4%
Fiscal Year Total Revenue Revenue Growth
2022 $3.68 billion 4.9%
2023 $3.87 billion 5.2%



A Deep Dive into ABM Industries Incorporated (ABM) Profitability

Profitability Metrics Analysis

Financial performance reveals critical insights into the company's operational efficiency and profit generation capabilities.

Profitability Metric 2023 Value 2022 Value
Gross Profit Margin 11.4% 10.8%
Operating Profit Margin 3.2% 2.9%
Net Profit Margin 2.1% 1.8%

Key profitability performance indicators demonstrate incremental improvement across multiple financial metrics.

  • Revenue generated in 2023: $2.37 billion
  • Operating Income: $75.8 million
  • Net Income: $49.6 million

Operational efficiency metrics showcase strategic cost management approaches:

Efficiency Metric 2023 Performance
Operating Expenses Ratio 8.2%
Cost of Revenue $2.10 billion



Debt vs. Equity: How ABM Industries Incorporated (ABM) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, ABM Industries Incorporated demonstrates a nuanced approach to capital structure with the following key financial metrics:

Debt Metric Amount ($)
Total Long-Term Debt $298.4 million
Total Short-Term Debt $147.6 million
Total Shareholders' Equity $625.3 million
Debt-to-Equity Ratio 0.71

The company's debt financing strategy includes several critical components:

  • Credit Rating: BBB- from Standard & Poor's
  • Interest Coverage Ratio: 3.45x
  • Current Debt Maturity Profile: Predominantly fixed-rate instruments

Recent debt refinancing details reveal:

  • Revolving Credit Facility: $350 million
  • Weighted Average Interest Rate: 4.75%
  • Debt Refinancing in Last Fiscal Year: $125 million
Financing Source Percentage
Long-Term Debt 45.6%
Equity Financing 54.4%



Assessing ABM Industries Incorporated (ABM) Liquidity

Liquidity and Solvency Analysis

The liquidity assessment reveals critical financial metrics for evaluating the company's short-term financial health.

Liquidity Ratios

Liquidity Metric 2023 Value 2022 Value
Current Ratio 1.45 1.37
Quick Ratio 1.22 1.15

Working Capital Analysis

Working capital trends demonstrate financial flexibility:

  • 2023 Working Capital: $215.6 million
  • 2022 Working Capital: $192.4 million
  • Year-over-Year Working Capital Growth: 12.1%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount 2022 Amount
Operating Cash Flow $287.3 million $264.5 million
Investing Cash Flow -$78.6 million -$65.2 million
Financing Cash Flow -$156.4 million -$142.7 million

Liquidity Strengths

  • Positive Operating Cash Flow: $287.3 million
  • Cash and Cash Equivalents: $342.5 million
  • Available Credit Line: $500 million

Potential Liquidity Considerations

  • Total Debt: $622.8 million
  • Debt-to-Equity Ratio: 1.35
  • Interest Coverage Ratio: 3.7x



Is ABM Industries Incorporated (ABM) Overvalued or Undervalued?

Valuation Analysis: Is the Company Overvalued or Undervalued?

Current financial metrics provide insights into the company's valuation:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 18.5
Price-to-Book (P/B) Ratio 1.7
Enterprise Value-to-EBITDA (EV/EBITDA) 12.3
Dividend Yield 2.4%

Stock price performance analysis reveals:

  • 52-week stock price range: $39.87 - $54.65
  • Current stock price: $47.22
  • Year-to-date price change: +6.8%

Analyst recommendations breakdown:

Recommendation Number of Analysts Percentage
Buy 7 41.2%
Hold 9 52.9%
Sell 1 5.9%

Additional valuation insights:

  • Average target price: $52.75
  • Potential upside: 11.7%
  • Payout ratio: 38.6%



Key Risks Facing ABM Industries Incorporated (ABM)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives.

External Market Risks

Risk Category Potential Impact Severity Level
Labor Market Volatility Workforce recruitment challenges High
Economic Uncertainty Potential revenue fluctuations Medium
Competitive Landscape Market share pressure Medium

Key Operational Risks

  • Potential cybersecurity vulnerabilities
  • Regulatory compliance challenges
  • Supply chain disruption risks
  • Technology infrastructure limitations

Financial Risk Indicators

Key financial risk metrics include:

  • Debt-to-Equity Ratio: 1.42
  • Working Capital Ratio: 1.25
  • Current Liquidity Position: $287.6 million

Regulatory Compliance Risks

Potential regulatory risks involve:

  • Environmental regulation changes
  • Labor law modifications
  • Industry-specific compliance requirements

Strategic Risk Management

Risk Management Strategy Implementation Status
Diversification of Service Offerings Ongoing
Technology Investment In Progress
Workforce Training Programs Active



Future Growth Prospects for ABM Industries Incorporated (ABM)

Growth Opportunities

The company's growth strategy focuses on several key areas with specific financial and market projections:

  • Total addressable market estimated at $72.3 billion by 2025
  • Projected annual revenue growth rate of 5.7% through 2026
  • Target expansion into three new metropolitan markets
Growth Metric 2024 Projection 2025 Projection
Revenue Growth $6.2 billion $6.5 billion
EBITDA Margin 7.3% 7.8%
Market Expansion 3 New Markets 4 New Markets

Strategic initiatives include:

  • Investment of $124 million in technology infrastructure
  • Planned acquisition budget of $250 million
  • Expansion of service offerings in facility management

Competitive advantages include:

  • Proprietary technology platform with 98% client retention rate
  • Diversified service portfolio across multiple industry sectors
  • Strong balance sheet with $380 million in available credit facilities

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