AECOM (ACM) Stock Forecast & Price Target

AECOM has demonstrated strong financial growth, with Adjusted EBITDA rising from $657 million in fiscal 2019 to $1,095 million in fiscal 2024, reflecting a compound annual growth rate of approximately 11%. Additionally, the company has improved its Adjusted EBITDA margin from 10.6% to 15.3%, representing an increase of 472 basis points during the same period. The introduction of its first-ever dividend, coupled with expectations for annual double-digit percentage increases, further underscores the company's commitment to returning value to shareholders while maintaining a trajectory of revenue and profitability improvement.

AECOM's negative outlook is underscored by potential shortfalls in organic revenue growth and the risk of higher costs, which may lead to reduced margins that fall below company forecasts. Additionally, the company's reliance on government contracts for more than 50% of its net service revenue exposes it to economic weakness and fluctuations in private sector demand. Labor shortages and wage pressures could further erode margins if increased costs are not able to be passed on to clients, complicating the company's ability to maintain project delivery and operational efficiency.