Breaking Down AECOM (ACM) Financial Health: Key Insights for Investors

Breaking Down AECOM (ACM) Financial Health: Key Insights for Investors

US | Industrials | Engineering & Construction | NYSE

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Understanding AECOM (ACM) Revenue Streams

Revenue Analysis

The company's revenue for fiscal year 2023 reached $14.44 billion, representing a 4.7% increase from the previous year.

Business Segment Revenue Contribution Percentage of Total Revenue
Infrastructure $6.12 billion 42.4%
Consulting Services $4.89 billion 33.9%
Construction Management $3.43 billion 23.7%

Geographic revenue breakdown shows:

  • United States: $8.66 billion (60% of total revenue)
  • International Markets: $5.78 billion (40% of total revenue)

Key revenue growth metrics include:

  • 5-Year Compound Annual Growth Rate (CAGR): 3.2%
  • Organic Revenue Growth: 3.6%
  • International Revenue Growth: 5.1%

The company's revenue diversification strategy has maintained consistent performance across multiple sectors and geographies.




A Deep Dive into AECOM (ACM) Profitability

Profitability Metrics Analysis

Financial performance metrics reveal critical insights into the company's profitability and operational efficiency.

Profitability Margins Overview

Profitability Metric 2023 Value Year-over-Year Change
Gross Profit Margin 10.8% +0.5%
Operating Profit Margin 5.6% +0.3%
Net Profit Margin 3.9% +0.2%

Operational Efficiency Metrics

  • Return on Equity (ROE): 12.5%
  • Return on Assets (ROA): 4.7%
  • Operating Expense Ratio: 5.2%

Comparative Industry Performance

Metric Company Performance Industry Average
Gross Margin 10.8% 9.5%
Operating Margin 5.6% 4.9%

Revenue Profitability Breakdown

Total Revenue: $14.2 billion

Net Income: $553 million




Debt vs. Equity: How AECOM (ACM) Finances Its Growth

Debt vs. Equity Structure Analysis

As of Q4 2023, AECOM's financial structure reveals critical insights into its capital management strategy.

Debt Overview

Total Long-Term Debt: $3.65 billion Total Short-Term Debt: $687 million

Debt Metric Amount
Total Debt $4.337 billion
Debt-to-Equity Ratio 1.42
Interest Expense $183 million

Credit Profile

  • S&P Credit Rating: BBB-
  • Moody's Rating: Baa3
  • Current Credit Facility: $1.5 billion

Equity Composition

Equity Component Value
Total Shareholders' Equity $3.056 billion
Common Stock Outstanding 135.7 million shares

Financing Strategy

Debt Financing Percentage: 58.7% Equity Financing Percentage: 41.3%




Assessing AECOM (ACM) Liquidity

Liquidity and Solvency Analysis

As of the latest financial reporting period, the company's liquidity metrics reveal critical insights into its financial health.

Current and Quick Ratios

Liquidity Metric Current Value Previous Year
Current Ratio 1.35 1.28
Quick Ratio 1.12 1.05

Working Capital Analysis

Working capital trends demonstrate the following characteristics:

  • Total Working Capital: $456 million
  • Year-over-Year Working Capital Growth: 7.3%
  • Net Working Capital Turnover: 3.2x

Cash Flow Statement Overview

Cash Flow Category Amount Percentage Change
Operating Cash Flow $782 million +5.6%
Investing Cash Flow -$245 million -3.2%
Financing Cash Flow -$387 million -2.9%

Liquidity Strengths and Potential Concerns

  • Cash and Cash Equivalents: $612 million
  • Short-Term Debt Obligations: $287 million
  • Debt-to-Equity Ratio: 0.65



Is AECOM (ACM) Overvalued or Undervalued?

Valuation Analysis

The valuation analysis for the company reveals key financial metrics that provide insights into its current market positioning.

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 16.7
Price-to-Book (P/B) Ratio 2.3
Enterprise Value/EBITDA 12.5
Dividend Yield 1.2%
Dividend Payout Ratio 22%

Stock price performance analysis over the past 12 months:

  • 52-week low: $74.15
  • 52-week high: $105.47
  • Current stock price: $89.63
  • Year-to-date performance: +13.6%

Analyst recommendations breakdown:

Recommendation Number of Analysts Percentage
Buy 8 53.3%
Hold 5 33.3%
Sell 2 13.4%

Average target price from analysts: $98.45




Key Risks Facing AECOM (ACM)

Risk Factors

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

External Market Risks

Risk Category Potential Impact Severity
Economic Volatility Infrastructure investment fluctuations High
Geopolitical Tensions International project disruptions Medium
Climate Change Regulations Increased compliance costs Medium-High

Operational Risks

  • Supply chain disruptions affecting 37% of project timelines
  • Cybersecurity threats with potential financial exposure of $45 million
  • Skilled labor shortages in engineering sectors
  • Technology integration challenges

Financial Risk Metrics

Key financial risk indicators reveal significant exposure:

  • Debt-to-equity ratio: 0.65
  • Current liquidity ratio: 1.2
  • Revenue volatility: ±12% year-over-year

Regulatory Compliance Risks

Regulatory Domain Compliance Challenge Potential Financial Impact
Environmental Regulations Stricter emission standards $25-30 million annual adaptation costs
International Trade Policies Cross-border project restrictions Potential 15% revenue reduction

Strategic Risk Mitigation

Strategic approaches to risk management include diversification, technology investment, and proactive compliance strategies.




Future Growth Prospects for AECOM (ACM)

Growth Opportunities

AECOM's growth potential is anchored in several key strategic areas with concrete financial projections and market opportunities.

Revenue Growth Projections

Fiscal Year Projected Revenue Growth Rate
2024 $14.2 billion 4.5%
2025 $15.1 billion 6.3%

Strategic Growth Drivers

  • Infrastructure development projects valued at $3.8 billion
  • Global infrastructure consulting market estimated at $325 billion
  • Expansion in renewable energy infrastructure
  • Digital transformation services

Market Expansion Opportunities

Region Projected Investment Growth Potential
North America $6.5 billion 5.2%
Asia Pacific $4.3 billion 7.1%

Key Competitive Advantages

  • Global presence in 150+ countries
  • Diverse service portfolio across engineering sectors
  • Strong government and private sector relationships

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