ABM Industries (ABM) AI Stock Analysis

• Market Cap: $2.64B
• Dividend Yield: 2.46%
• Average Volume (3M): 498.41K
• Price to Earnings (P/E): 24.6
• Beta (1Y): 0.86
• Revenue Growth: 4.27%
• EPS Growth: -24.06%
• Country: US
• Employees: 100,000
• Sector: Industrials
• Sector Strength: 72
• Industry: Specialty Business Services
• EPS (TTM): 0.82
• Shares Outstanding: 61,233,894
• 10 Day Avg. Volume: 457,084
• 30 Day Avg. Volume: 498,406
• PEG Ratio: -0.62
• Price to Book (P/B): 1.88
• Price to Sales (P/S): 0.40
• P/FCF Ratio: 20.04
• Enterprise Value/Market Cap: 1.69
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 3.95
• Enterprise Value/Ebitda: 8.88
• 1Y Price Target: $59.00
• Price Target Upside: 36.99% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 6

• Rating: 66 Neutral
• Price Target: $47.00 ▲(9.12% Upside)

ABM Industries' strong financial performance and positive earnings call guidance are key strengths, indicating potential for future growth. However, technical indicators suggest bearish momentum, and valuation metrics imply the stock may be overvalued. The company's strategic initiatives and restructuring efforts are expected to yield benefits, but current margin pressures and cash flow challenges warrant caution.

Positive Factors

Revenue Growth

Consistent organic revenue growth across all segments indicates strong market demand and effective business strategies, supporting long-term expansion.

AI Investments

Investments in AI enhance operational efficiency and open new revenue streams, positioning ABM to leverage technology for competitive advantage.

Debt Reduction

Significant reduction in leverage enhances financial stability and flexibility, allowing for better capital allocation and risk management.

Negative Factors

Margin Pressures

Ongoing margin pressures from strategic pricing decisions may limit profitability, impacting the company's ability to invest in growth opportunities.

Cash Flow Challenges

Significant decline in free cash flow generation indicates potential cash management issues, affecting the company's ability to fund operations and growth.

Leadership Change

The departure of the CFO may lead to strategic and operational uncertainties, potentially disrupting financial management and long-term planning.

ABM Industries Business Overview & Revenue Model

Company Description

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally. The company operates through Business & Industry, Technology & Manufacturing, Education, Aviation, and Technical Solutions segments. It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, and mechanical and electrical services; and vehicle maintenance and other services to rental car providers. The company was incorporated in 1985 and is based in New York, New York.

How the Company Makes Money

ABM generates revenue primarily through its comprehensive facility solutions offered to clients across different industries. The company operates on a contract-based model, providing services that are typically long-term contracts, often spanning several years. Key revenue streams include janitorial services, maintenance and engineering services, and specialized services like energy management and parking solutions. Additionally, ABM benefits from economies of scale, as it can leverage its extensive workforce and resources to provide cost-effective services. Significant partnerships with clients in sectors such as healthcare and education further contribute to stable and recurring revenue, while the company's commitment to sustainability and technology-driven solutions helps attract new business opportunities.

ABM Industries Financial Statement Overview

Summary

ABM Industries shows steady revenue growth and improved leverage, indicating financial health. However, challenges in maintaining profit margins and generating free cash flow are notable concerns.

Income Statement

ABM Industries shows a steady revenue growth with a TTM growth rate of 1.53%, indicating a positive trajectory. The gross profit margin has slightly decreased to 10.10% in TTM from 13.34% in the previous year, suggesting some pressure on cost management. Net profit margin improved to 1.34% in TTM, reflecting better profitability. However, EBIT and EBITDA margins have slightly declined, indicating potential operational efficiency challenges.

Balance Sheet

The company's debt-to-equity ratio has significantly improved to 0.08 in TTM from 0.83 in the previous year, indicating a strong reduction in leverage. Return on equity stands at 6.42%, showing a moderate return on shareholder investment. The equity ratio is stable, reflecting a solid financial position with a good proportion of equity financing.

Cash Flow

Operating cash flow to net income ratio is at 0.10, indicating a weaker cash conversion from net income. Free cash flow has decreased significantly, with a negative growth rate of -305.67% in TTM, highlighting potential cash flow management issues. The free cash flow to net income ratio is 0.44, suggesting limited free cash flow generation relative to net income.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	8.63B	8.36B	8.10B	7.81B	6.23B	5.99B
Gross Profit	1.13B	1.12B	1.13B	1.05B	970.40M	830.60M
EBITDA	503.20M	414.40M	460.60M	461.10M	296.10M	372.50M
Net Income	115.90M	81.40M	251.30M	230.40M	126.30M	300.00K
Balance Sheet
Total Assets	5.27B	5.10B	4.93B	4.87B	4.44B	3.78B
Cash, Cash Equivalents and Short-Term Investments	69.30M	64.60M	69.50M	73.00M	62.80M	394.20M
Total Debt	142.00M	1.47B	1.44B	1.40B	1.03B	886.10M
Total Liabilities	3.44B	3.32B	3.13B	3.15B	2.83B	2.28B
Stockholders Equity	1.83B	1.78B	1.80B	1.72B	1.61B	1.50B
Cash Flow
Free Cash Flow	58.00M	167.30M	190.70M	-30.40M	280.00M	419.50M
Operating Cash Flow	131.40M	226.70M	243.30M	20.40M	314.30M	457.50M
Investing Cash Flow	-88.80M	-171.90M	-62.10M	-241.50M	-740.00M	-27.50M
Financing Cash Flow	-61.00M	-61.50M	-186.30M	235.50M	92.40M	-94.10M

ABM Industries Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.07
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABM, the sentiment is Negative. The current price of 43.07 is below the 20-day moving average (MA) of 45.34, below the 50-day MA of 46.14, and below the 200-day MA of 48.09, indicating a bearish trend. The MACD of -0.34 indicates Positive momentum. The RSI at 31.45 is Neutral, neither overbought nor oversold. The STOCH value of 39.06 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ABM.

ABM Industries Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MMS	―	$4.80B	15.88	17.61%	1.41%	3.40%	13.75%
UNF	―	$2.77B	19.99	6.93%	0.88%	0.21%	2.72%
ABM	―	$2.64B	24.62	6.32%	2.46%	4.27%	-24.06%
CBZ	―	$2.77B	29.59	7.84%	―	46.49%	-25.62%
Sector *	―	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
BV	―	$1.19B	374.03	3.03%	―	-2.99%	-72.13%
FA	―	$2.46B	549.40	-13.57%	―	65.34%	-633.72%

ABM Industries Corporate Events

ABM Industries Reports Strong Q3 Results and Restructuring

On September 5, 2025, ABM Industries announced its fiscal third-quarter results, highlighting a 6.2% revenue increase to $2.2 billion, driven by organic growth and acquisitions. The company reported a significant rise in net income to $41.8 million, attributed to the absence of prior year adjustments and lower corporate costs. ABM launched a restructuring program aimed at achieving $35 million in annualized cost savings, expected to begin in the fourth quarter. The Board also approved a $150 million increase in share repurchase authorization, reflecting confidence in ABM’s strategic direction. Despite some margin pressures, the company anticipates improved fourth-quarter results and continues to invest in AI capabilities and client-facing resources.

ABM Industries Expands Board with New Director

On June 11, 2025, ABM Industries announced the election of Carol A. Clements to its Board of Directors, expanding the board from ten to eleven members. Ms. Clements, a technology and digital transformation leader with over 25 years of experience, currently serves as Chief Digital and Technology Officer at JetBlue Airways Corporation. Her appointment is seen as a strategic move to leverage her expertise in technology and innovation, aligning with ABM’s focus on redefining industry standards through advanced digital solutions.

ABM Industries Appoints New CFO David Orr

On June 6, 2025, ABM Industries appointed David Orr as the new Executive Vice President and Chief Financial Officer, succeeding Earl Ellis who has served since November 2020. Orr, who has been with ABM since 2001, brings extensive experience in finance and strategy, having previously held roles such as Senior Vice President of Financial Planning and Analysis. His appointment is seen as a move to leverage his deep understanding of the industry and operational excellence to drive growth and transformation for ABM. Ellis will continue as a Senior Advisor until September 5, 2025, and will receive severance benefits as per his employment agreement.

ABM Industries Reports Q2 Revenue Growth and New Bookings

On June 6, 2025, ABM Industries announced its fiscal second quarter results, reporting a 4.6% increase in revenue to $2.1 billion, driven by 3.8% organic growth. Despite a slight decrease in net income compared to the previous year, adjusted net income and EBITDA showed improvement. The company secured $1.1 billion in new bookings, highlighting its strong market position. ABM also declared a quarterly dividend of $0.265 per share, payable in August 2025, marking its 237th consecutive quarterly dividend.