Shares of AECOM ACM have been on a strong upward trend, recently reaching a new 52-week high. On Wednesday, the stock hit a new 52-week high of $118.54 but ended the day slightly lower at $116.74.

The stock has surged 36.5% over the past six months, far outpacing the 4.7% rise in the Zacks Engineering - R and D Services industry, the broader Construction sector's 17.7% growth, and even the S&P 500's impressive 13.8% rally.

ACM Stock’s 6-Month Price Performance

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With analysts revising earnings estimates upward and the company benefiting from long-term infrastructure trends, the question is whether investors should jump in now or wait for a pullback.

ACM Stock Trades Above 50 and 200-Day Moving Averages

Technical indicators suggest continued strong performance for AECOM. Notably, the 50-day SMA continues to read higher than the 200-day SMA, signaling the bullish trend. This technical strength underscores positive market sentiment and confidence in AECOM’s financial health and prospects.

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AECOM’s Upward Estimate Revisions Signal Confidence

AECOM’s upward trajectory is bolstered by analysts' rising optimism. Earnings per share (EPS) estimates for fiscal 2025 and 2026 have been revised upward over the past 30 days, as shown in the chart below, reflecting confidence in the company’s ability to sustain its growth.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.
 

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Here’s a closer look at the factors driving this performance and what the future might hold for AECOM stock.

AECOM Faces Resilient Demand for Infrastructure Investment

The global demand for infrastructure modernization remains a critical growth driver for AECOM. With over 46,000 structurally deficient bridges in the United States, initiatives like the Infrastructure Investment and Jobs Act (IIJA) provide long-term funding stability. AECOM’s expertise in addressing these challenges, coupled with bipartisan support for infrastructure spending, ensures a robust pipeline of projects.

Global Trends Create Tailwinds for AECOM

Urbanization and energy modernization further support AECOM’s growth. By 2050, nearly 70% of the global population is expected to live in urban areas, driving demand for advanced transportation, water, and energy systems. AECOM’s leadership in projects like the UK’s Great Grid and Australia’s transmission grid expansion highlights its ability to capitalize on these trends.

Additionally, the company is well-positioned to benefit from the global push for energy efficiency and electrification, with opportunities in grid modernization and energy storage expanding rapidly.

ACM’s High Win Rates and Backlog Visibility

AECOM’s competitive edge lies in its consistent ability to secure large-scale projects. The company boasts a win rate exceeding 50% for large pursuits, which increases for projects over $25 million. With a strong 1.2 book-to-burn ratio in the fourth quarter of fiscal 2024, AECOM ensures a growing backlog and better revenue visibility.

AECOM’s Strategic Focus on High-Margin Businesses

AECOM’s strategy to expand its advisory and program management services positions it to generate higher margins. For example, its newly launched Water and Environment Advisory business is projected to grow from $200 million to $1 billion in revenues within three years. Similarly, the program management segment, which grew 20% in fiscal 2024, enhances AECOM’s global leadership in managing complex, high-value projects.

Valuation and Efficiency of AECOM

ACM’s forward 12-month Price-to-Earnings (P/E F12M) ratio of 22.51 is nearly identical to the industry average of 22.54, indicating the stock is reasonably valued. Considering AECOM’s historical P/E range of 16.85 to 23.00, the current valuation offers room for upside, especially given the company’s growth prospects.

The company is also trading currently at a discount compared to other industry players like Comfort Systems USA, Inc. FIX and MasTec, Inc. MTZ, but premium to Fluor Corporation FLR. FIX, MTZ and FLR are trading with forward 12-month P/E multiples of 29.33, 28.18, and 19.14, respectively.

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However, AECOM stands out in efficiency, with a trailing 12-month return on equity (ROE) well above the industry average, as shown in the chart below. This indicates superior profitability and operational strength compared to peers.

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Should You Buy ACM Stock Now?

AECOM's strong fundamentals, competitive positioning, and resilience in the booming infrastructure market make it a compelling investment. With rising earnings estimates, robust win rates, and consistent outperformance of its peers, ACM stock is well-positioned for further growth.

Carrying a Zacks Rank #2 (Buy), ACM’s combination of valuation and growth potential offers investors a golden opportunity to ride the infrastructure wave. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Investors looking for a well-rounded stock in the engineering and construction space should consider adding AECOM to their portfolio today.

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Fluor Corporation (FLR) : Free Stock Analysis Report

AECOM (ACM) : Free Stock Analysis Report

Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report

MasTec, Inc. (MTZ) : Free Stock Analysis Report

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