Exponent (EXPO) AI Stock Analysis

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Exponent

(NASDAQ:EXPO)

Rating:74Outperform

Price Target:

$87.00

▲( 12.36% Upside)

Exponent scores a 74, reflecting strong financial performance and resilience in operations despite macroeconomic challenges. The high P/E ratio suggests overvaluation, and technical indicators point to a cautious outlook. Earnings call feedback balances optimism in reactive services with caution over declining income and operational efficiency.

Exponent (EXPO) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$4.03B

Dividend Yield1.47%

Average Volume (3M)333.31K

Price to Earnings (P/E)38.8

Beta (1Y)0.93

Revenue Growth3.27%

EPS Growth3.94%

CountryUS

Employees966

SectorIndustrials

Sector Strength90

IndustryConsulting Services

Share Statistics

EPS (TTM)0.52

Shares Outstanding50,751,480

10 Day Avg. Volume279,289

30 Day Avg. Volume333,307

Financial Highlights & Ratios

PEG Ratio15.84

Price to Book (P/B)9.86

Price to Sales (P/S)0.00

P/FCF Ratio29.94

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$100.00

Price Target Upside29.15% Upside

Rating ConsensusModerate Buy

Number of Analyst Covering2

Exponent Business Overview & Revenue Model

Company DescriptionExponent (EXPO) is a multidisciplinary engineering and scientific consulting firm that operates across various sectors including engineering, environmental sciences, health, and human factors. The company provides a wide array of services such as failure analysis, accident reconstruction, and product safety evaluations. Exponent serves a diverse clientele, including corporations, law firms, insurance companies, and government agencies, offering expertise to address complex scientific and technical challenges.

How the Company Makes MoneyExponent makes money primarily through consulting fees charged for its expert services. The company's revenue model is centered around providing specialized technical consulting across different industries. Key revenue streams include fees for project-based work, retainer agreements, and advisory services. Exponent's earnings are bolstered by its reputation for delivering high-quality, expert analysis and solutions which attract repeat business and long-term partnerships. The firm also benefits from its ability to address emerging and complex technological and regulatory issues, which allows it to sustain demand for its services.

Exponent Financial Statement Overview

Summary

Exponent exhibits strong financial health with consistent revenue growth and profitability. The balance sheet is solid with low leverage, and cash flows are robust, supporting operational sustainability. However, careful attention to operational efficiency and cash management could enhance future financial performance.

Income Statement

Positive

Exponent demonstrated stable revenue growth with a 4.56% increase from 2022 to 2023 and a strong gross profit margin of 92.26% in 2023. The net profit margin was 18.70%, indicating healthy profitability. However, there was a decline in EBIT and EBITDA margins from the previous year, which could indicate operational challenges.

Balance Sheet

Positive

The company maintains a strong equity position with a debt-to-equity ratio of 0.08 in 2023, highlighting low leverage risk. Stockholders' equity grew steadily, indicating strong capitalization. The equity ratio was 55.06%, reflecting robust financial stability.

Cash Flow

Positive

Exponent showed robust free cash flow growth of 23.88% from 2022 to 2023. The operating cash flow to net income ratio was 1.27, suggesting efficient cash generation relative to reported earnings. However, the free cash flow to net income ratio slightly declined to 1.11, indicating a potential area for improvement in cash management.

Mar 2025	Dec 2023	Dec 2022	Dec 2021	Mar 2021
Breakdown
Income Statement		Total Revenue
558.51M	536.77M	513.29M	466.27M	399.90M
	Gross Profit
558.51M	495.23M	478.21M	433.68M	96.14M
	EBIT
119.56M	111.32M	140.84M	108.93M	83.25M
	EBITDA
129.25M	120.24M	147.92M	115.41M	90.12M
	Net Income Common Stockholders
109.00M	100.34M	102.33M	101.20M	82.55M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
258.90M	187.15M	161.46M	297.69M	242.53M
	Total Assets
777.27M	646.78M	586.66M	683.74M	580.10M
	Total Debt
81.48M	28.26M	18.60M	14.97M	20.33M
	Net Debt
-177.42M	-158.89M	-142.86M	-282.72M	-177.19M
	Total Liabilities
356.20M	290.69M	265.91M	266.67M	218.60M
	Stockholders Equity
421.07M	356.08M	320.75M	417.06M	361.50M
Cash Flow		Free Cash Flow
137.60M	111.00M	81.76M	117.74M	98.33M
	Operating Cash Flow
144.54M	127.35M	93.81M	124.57M	103.31M
	Investing Cash Flow
-6.94M	-16.36M	-12.04M	38.18M	5.02M
	Financing Cash Flow
-65.11M	-86.01M	-215.98M	-62.75M	-88.36M

Exponent Technical Analysis

Technical Analysis Sentiment

Negative

Last Price77.43

Price Trends

50DMA

79.23

Negative

100DMA

83.83

Negative

200DMA

93.27

Negative

Market Momentum

MACD

-0.24

Negative

RSI

45.34

Neutral

STOCH

39.30

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EXPO, the sentiment is Negative. The current price of 77.43 is below the 20-day moving average (MA) of 77.93, below the 50-day MA of 79.23, and below the 200-day MA of 93.27, indicating a bearish trend. The MACD of -0.24 indicates Negative momentum. The RSI at 45.34 is Neutral, neither overbought nor oversold. The STOCH value of 39.30 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EXPO.

Exponent Risk Analysis

Exponent disclosed 34 risk factors in its most recent earnings report. Exponent reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Exponent Peers Comparison

Overall Rating

UnderperformOutperform

Sector (64)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
BAH	78 Outperform	$16.35B	19.25	75.34%	1.62%	14.07%	116.33%
HURN	76 Outperform	$2.62B	22.58	24.88%	―	8.83%	92.48%
ICFI	75 Outperform	$1.63B	15.18	11.64%	0.64%	1.95%	17.98%
CRAI	75 Outperform	$1.30B	25.83	23.18%	0.97%	8.49%	21.06%
EXPO	74 Outperform	$4.03B	38.80	25.87%	1.47%	3.27%	3.94%
FCN	74 Outperform	$5.76B	22.60	12.46%	―	1.59%	-16.79%
Sector *	64 Neutral	$4.39B	11.81	5.17%	249.38%	3.98%	-12.17%

* Industrials Sector Average

Performance Comparison

EXPO

Exponent

77.43

-16.80

-17.83%

BAH

Booz Allen

129.13

-20.99

-13.98%

CRAI

Cra International

188.45

19.92

11.82%

FCN

FTI Consulting

166.60

-52.23

-23.87%

HURN

Huron Consulting

150.69

65.11

76.08%

ICFI

Icf International

88.00

-54.03

-38.04%

Exponent Earnings Call Summary

Earnings Call Date:May 01, 2025

(Q1-2025)

% Change Since: -0.50%|

Next Earnings Date:Jul 24, 2025

Earnings Call Sentiment Neutral

The earnings call highlighted Exponent's resilience in maintaining flat revenues despite headwinds in staffing and challenges in proactive services. Strong performance in reactive services and strategic hiring indicate optimism. However, declines in net income, EBITDA, and billable hours, coupled with macroeconomic uncertainties affecting proactive engagements, present challenges.

Q1-2025 Updates

Positive Updates

Resilience of Diversified Business Model

Despite a 5% to 6% headwind in technical full-time equivalent employees, Exponent achieved approximately flat revenues due to strong activity from key industries, particularly in reactive services like failure analysis.

Sequential Headcount Growth

Exponent reported a 2% sequential headcount growth, attributed to lower turnover than expected and mid-70s utilization.

Strong Performance in Reactive Services

Reactive services, which constitute 60% of the business, showed growth in low single digits, driven by demand in disputes and failure analysis across chemicals, transportation, and utilities industries.

Maintained Revenue and Margin Guidance

Despite macroeconomic uncertainties, Exponent maintained its revenue and margin guidance for fiscal 2025, expecting revenue growth in low single digits.

Negative Updates

Decline in Net Income and EBITDA

Net income for Q1 2025 decreased to $26.7 million from $30.1 million in the prior year. EBITDA decreased by 6% to $37.5 million, driven by increased stock-based compensation and operating expenses.

Decrease in Billable Hours and Technical Employees

Billable hours decreased by 4% year-over-year, and average technical full-time equivalent employees decreased by 4% compared to a year ago.

Easing in Consumer Electronics Industry

Revenues were impacted by easing in the consumer electronics industry due to the timing of clients' product development life cycles.

Challenges in Proactive Services

Proactive services saw a slight decline, with clients delaying work due to macroeconomic uncertainty, particularly in regulatory consulting.

Company Guidance

During the first quarter of 2025, Exponent, Inc. reported approximately flat total revenues at $145.5 million, with net revenues also flat at $137.4 million compared to the same period in 2024. The company's net income decreased to $26.7 million, or $0.52 per diluted share, from $30.1 million, or $0.59 per diluted share, in the prior year. The EBITDA margin declined to 27.3% of net revenues, down from 29.2% in the previous year, primarily due to increased stock-based compensation and other operating expenses. The company faced a 4% decrease in billable hours, totaling approximately 376,000, and a similar 4% decrease in average technical full-time equivalent employees, now at 966. Despite these challenges, Exponent achieved a mid-70s utilization rate and sequential headcount growth of 2%. Looking ahead, for the second quarter and fiscal year 2025, Exponent expects revenue before reimbursements to decline in the low single digits and EBITDA margins to range between 26% and 27%, maintaining their full-year guidance for low single-digit growth. The company anticipates year-end headcount to increase by approximately 4% from the beginning of the year, with full-year utilization expected to reach 72% to 73%.

Exponent Corporate Events

DividendsFinancial Disclosures

Exponent Announces Quarterly Dividend Amid Financial Resilience

Positive

May 1, 2025

On May 1, 2025, Exponent, Inc. announced a quarterly cash dividend of $0.30 per share, payable on June 20, 2025, to stockholders of record as of June 6, 2025. The company’s first-quarter financial results for 2025 showed resilience despite a slight decrease in net income and EBITDA compared to the previous year. Exponent’s engineering and scientific consulting services continued to drive demand across the transportation, utilities, and chemicals industries. The company remains well-positioned to navigate economic volatility and anticipates modest revenue growth for the full fiscal year 2025, despite facing headwinds in the second quarter.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.