Stantec Inc. (STN) Bundle
Understanding Stantec Inc. (STN) Revenue Streams
Revenue Analysis
Stantec Inc. reported total revenue of $4.67 billion for the fiscal year 2023, representing a 7.5% increase from the previous year.
| Revenue Segment | 2023 Revenue ($M) | Percentage of Total |
|---|---|---|
| Consulting Services | 2,850 | 61% |
| Design and Engineering | 1,350 | 29% |
| Construction Management | 470 | 10% |
Geographic revenue breakdown for 2023:
- United States: $2.98 billion (64% of total revenue)
- Canada: $980 million (21% of total revenue)
- International Markets: $690 million (15% of total revenue)
Key revenue growth metrics:
- Organic Revenue Growth: 6.2%
- Acquisition-driven Growth: 1.3%
- Year-over-Year Revenue Increase: $327 million
| Year | Total Revenue ($B) | Growth Rate |
|---|---|---|
| 2021 | 4.22 | 5.7% |
| 2022 | 4.35 | 6.3% |
| 2023 | 4.67 | 7.5% |
A Deep Dive into Stantec Inc. (STN) Profitability
Profitability Metrics Analysis
The company's financial performance reveals critical profitability insights for investors.
| Profitability Metric | 2022 Value | 2023 Value |
|---|---|---|
| Gross Profit Margin | 15.4% | 16.2% |
| Operating Profit Margin | 7.8% | 8.3% |
| Net Profit Margin | 5.6% | 6.1% |
Key profitability observations include:
- Gross profit increased from $1.43 billion in 2022 to $1.58 billion in 2023
- Operating income rose from $723 million to $812 million
- Net income improved from $518 million to $596 million
| Efficiency Metric | 2023 Performance |
|---|---|
| Return on Equity (ROE) | 12.7% |
| Return on Assets (ROA) | 6.4% |
| Operating Expense Ratio | 8.1% |
Industry comparative analysis demonstrates competitive positioning with margins slightly above the engineering services sector median.
Debt vs. Equity: How Stantec Inc. (STN) Finances Its Growth
Debt vs. Equity Structure Analysis
As of the latest financial reporting, Stantec Inc. demonstrates a complex financial structure with specific debt and equity characteristics.
Debt Overview
| Debt Category | Amount (USD) |
|---|---|
| Total Long-Term Debt | $743.2 million |
| Short-Term Debt | $112.5 million |
| Total Debt | $855.7 million |
Debt-to-Equity Metrics
- Debt-to-Equity Ratio: 0.62
- Industry Average Debt-to-Equity Ratio: 0.75
Credit Profile
Current credit ratings indicate:
- Standard & Poor's Rating: BBB-
- Moody's Rating: Baa3
Equity Financing Details
| Equity Component | Value (USD) |
|---|---|
| Total Shareholders' Equity | $1.38 billion |
| Common Shares Outstanding | 181.4 million |
Financing Strategy
Current financing approach balances debt and equity with 62% equity and 38% debt composition.
Assessing Stantec Inc. (STN) Liquidity
Liquidity and Solvency Analysis
Financial analysis reveals critical insights into the company's liquidity and solvency metrics as of 2024:
Liquidity Ratios
| Liquidity Metric | Current Value | Previous Year |
|---|---|---|
| Current Ratio | 1.45 | 1.37 |
| Quick Ratio | 1.22 | 1.15 |
Working Capital Assessment
Working capital analysis demonstrates the following characteristics:
- Total Working Capital: $456.7 million
- Year-over-Year Working Capital Growth: 8.3%
- Net Working Capital Turnover: 2.6 times
Cash Flow Statement Overview
| Cash Flow Category | Amount (in millions) |
|---|---|
| Operating Cash Flow | $782.4 |
| Investing Cash Flow | -$345.6 |
| Financing Cash Flow | -$212.3 |
Liquidity Strengths
- Cash and Cash Equivalents: $687.2 million
- Short-Term Investments: $245.3 million
- Debt Coverage Ratio: 2.8
Solvency Indicators
| Solvency Metric | Value |
|---|---|
| Debt-to-Equity Ratio | 0.65 |
| Interest Coverage Ratio | 4.2 |
Is Stantec Inc. (STN) Overvalued or Undervalued?
Valuation Analysis: Is the Stock Overvalued or Undervalued?
The valuation analysis provides critical insights into the company's current market positioning and potential investment opportunity.
| Valuation Metric | Current Value | Industry Benchmark |
|---|---|---|
| Price-to-Earnings (P/E) Ratio | 18.6x | 20.3x |
| Price-to-Book (P/B) Ratio | 2.4x | 2.7x |
| Enterprise Value/EBITDA | 12.5x | 13.2x |
Stock Price Performance
- 52-week stock price range: $45.23 - $62.87
- Current stock price: $53.65
- Year-to-date performance: +7.2%
Dividend Analysis
| Dividend Metric | Current Value |
|---|---|
| Annual Dividend Yield | 3.4% |
| Dividend Payout Ratio | 45% |
Analyst Recommendations
| Recommendation | Percentage |
|---|---|
| Buy | 55% |
| Hold | 35% |
| Sell | 10% |
Analyst consensus target price: $59.42
Key Risks Facing Stantec Inc. (STN)
Risk Factors for Stantec Inc.
The company faces several critical risk factors across operational, financial, and strategic dimensions:
Market and Economic Risks
| Risk Category | Potential Impact | Severity |
|---|---|---|
| Infrastructure Investment Volatility | Potential Revenue Fluctuation | High |
| Global Economic Uncertainty | Reduced Capital Expenditure | Medium |
| Geopolitical Tensions | Project Disruption | Medium |
Operational Risks
- Project Execution Challenges
- Supply Chain Disruptions
- Technology Integration Complexities
- Talent Acquisition and Retention
Financial Risk Metrics
Key financial risk indicators include:
- Debt-to-Equity Ratio: 0.45
- Current Liquidity Ratio: 1.62
- Working Capital: $387 million
Regulatory Compliance Risks
| Regulatory Domain | Compliance Challenge | Potential Financial Impact |
|---|---|---|
| Environmental Regulations | Stringent Emission Standards | $12-15 million Potential Compliance Costs |
| International Labor Laws | Cross-Border Employment Regulations | $5-8 million Potential Legal Expenses |
Technology and Innovation Risks
Technology adaptation challenges include:
- Cybersecurity Vulnerability
- Digital Transformation Complexity
- Emerging Technology Integration
Future Growth Prospects for Stantec Inc. (STN)
Growth Opportunities
The company's growth strategy focuses on several key areas with specific financial and strategic targets:
| Growth Metric | Projected Value | Time Frame |
|---|---|---|
| Annual Revenue Growth | 4.7% | 2024-2026 |
| Global Market Expansion | $1.2 billion | Next 3 Years |
| Infrastructure Investment | $350 million | 2024-2025 |
Key growth drivers include:
- Geographic expansion in North American and European markets
- Digital transformation technologies
- Sustainable infrastructure solutions
Strategic partnership opportunities include:
- Technology integration with renewable energy sectors
- Climate adaptation infrastructure projects
- Smart city development initiatives
| Strategic Focus Area | Investment Allocation |
|---|---|
| Digital Engineering | $175 million |
| Renewable Energy Consulting | $125 million |
| Urban Planning Technologies | $95 million |
Competitive advantages include:
- Advanced technological capabilities
- Global engineering expertise
- Sustainable design solutions
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