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Stantec Inc (TSE:STN)
TSX:STN

Stantec (STN) AI Stock Analysis

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TS

Stantec

(TSX:STN)

77Outperform
Stantec's overall stock score is bolstered by strong financial performance, positive earnings guidance, and favorable technical indicators. High P/E ratio poses valuation concerns, but strategic corporate developments, such as significant project wins, reinforce growth potential.
Positive Factors
Demand Trends
STN remains well-positioned to capitalize on secular demand trends including infrastructure development, energy transition, climate change, and reshoring.
Earnings
STN is trending towards meeting or exceeding many of its targets, including Adjusted EBITDA margin and Adjusted EPS growth.
M&A Activity
Optimistic outlook for M&A activity with management appearing most optimistic for potential deals in the U.S. and Europe.
Negative Factors
Wage Inflation
Demand across STN's regions and business units remains strong with pricing more than offsetting wage inflation.

Stantec (STN) vs. S&P 500 (SPY)

Stantec Business Overview & Revenue Model

Company DescriptionStantec Inc. is a global design and consulting services firm headquartered in Edmonton, Alberta, Canada. The company operates in diverse sectors including infrastructure, water, energy, and built environment, providing engineering, architecture, interior design, landscape architecture, surveying, environmental sciences, project management, and project economics services. Stantec collaborates with clients across various industries to deliver sustainable solutions and innovative designs that enhance the quality of life in communities worldwide.
How the Company Makes MoneyStantec makes money primarily through providing professional consulting services across its key sectors: infrastructure, water, energy, and the built environment. The company generates revenue by offering engineering and architectural design services, environmental consulting, and project management. Its revenue model is based on fee-for-service arrangements, where clients are billed for the time and expertise provided by its professionals on a project basis. Significant partnerships with government agencies, private sector clients, and other organizations also contribute to its earnings. Stantec's diverse portfolio and global presence enable it to secure a steady stream of projects and maintain a robust financial performance.

Stantec Financial Statement Overview

Summary
Stantec shows strong financial health with consistent revenue growth of 15.7% and improved profit margins. The absence of EBIT in 2024 and rising debt levels are concerns, but the company's robust cash flow management ensures liquidity and financial stability.
Income Statement
80
Positive
Stantec has demonstrated consistent revenue growth, with a notable increase of 15.7% from 2023 to 2024. The gross profit margin improved from 38% in 2023 to 42.6% in 2024, indicating effective cost management. However, there was no EBIT recorded in 2024, which is a concern and affects profitability analysis. The net profit margin remained stable at approximately 4.8% in 2024, showcasing decent profitability.
Balance Sheet
75
Positive
The company's debt-to-equity ratio is 0.69 in 2024, indicating a moderate level of leverage. The return on equity (ROE) improved to 12.3% in 2024 from 12% in 2023, highlighting an effective use of equity to generate profits. With an equity ratio of 42.3%, Stantec maintains a solid capital structure, but the increasing debt levels require attention.
Cash Flow
85
Very Positive
Stantec's free cash flow grew by 13.5% in 2024, reflecting strong cash generation capabilities. The operating cash flow to net income ratio of 1.67 in 2024 indicates effective cash management. The substantial free cash flow to net income ratio of 1.39 further demonstrates the company's ability to convert earnings into cash, enhancing financial flexibility.
Breakdown
Dec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
7.50B6.48B5.68B4.58B4.73B
Gross Profit
3.20B2.46B2.42B1.96B1.93B
EBIT
0.00530.10M383.60M325.70M344.50M
EBITDA
901.70M801.00M677.50M523.40M491.50M
Net Income Common Stockholders
361.50M331.20M247.00M200.70M171.10M
Balance SheetCash, Cash Equivalents and Short-Term Investments
254.70M352.90M148.30M193.90M285.00M
Total Assets
6.96B6.08B5.65B5.23B4.39B
Total Debt
2.04B1.73B1.92B1.92B1.32B
Net Debt
1.81B1.38B1.77B1.73B1.03B
Total Liabilities
4.01B3.32B3.37B3.22B2.46B
Stockholders Equity
2.95B2.76B2.29B2.00B1.93B
Cash FlowFree Cash Flow
504.10M444.10M229.40M346.40M569.60M
Operating Cash Flow
603.10M544.70M304.30M397.00M603.80M
Investing Cash Flow
-605.00M-201.70M-73.80M-764.80M-102.00M
Financing Cash Flow
-152.10M-134.00M-296.70M276.50M-412.60M

Stantec Technical Analysis

Technical Analysis Sentiment
Positive
Last Price131.34
Price Trends
50DMA
120.17
Positive
100DMA
116.31
Positive
200DMA
114.94
Positive
Market Momentum
MACD
2.83
Negative
RSI
70.60
Negative
STOCH
90.40
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:STN, the sentiment is Positive. The current price of 131.34 is above the 20-day moving average (MA) of 122.75, above the 50-day MA of 120.17, and above the 200-day MA of 114.94, indicating a bullish trend. The MACD of 2.83 indicates Negative momentum. The RSI at 70.60 is Negative, neither overbought nor oversold. The STOCH value of 90.40 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:STN.

Stantec Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSBDT
79
Outperform
C$1.31B13.2126.59%2.77%21.39%37.48%
TSWSP
78
Outperform
C$32.67B46.349.42%0.57%16.77%21.38%
TSSTN
77
Outperform
$14.35B39.9412.88%0.65%15.75%7.64%
74
Outperform
$12.45B43.578.26%0.11%12.20%-0.98%
70
Outperform
$1.38B20.4319.89%1.71%10.97%24.27%
64
Neutral
$4.30B11.845.23%249.82%4.06%-10.21%
TSARE
50
Neutral
C$1.08B-5.87%4.20%-8.64%-136.62%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:STN
Stantec
131.34
19.32
17.25%
TSE:ATRL
AtkinsRealis
73.55
17.30
30.76%
TSE:BDGI
Badger Infrastructure Solutions
42.60
0.28
0.67%
TSE:BDT
Bird Construction
24.48
4.58
23.02%
TSE:ARE
Aecon Group Inc.
18.11
1.59
9.62%
TSE:WSP
WSP Global
262.36
45.16
20.79%

Stantec Earnings Call Summary

Earnings Call Date:Feb 25, 2025
(Q4-2024)
|
% Change Since: 20.71%|
Next Earnings Date:May 14, 2025
Earnings Call Sentiment Positive
Stantec reported a record year in terms of revenue and growth, with strong performance across multiple business units and geographies. The company achieved significant increases in EBITDA and EPS, along with a record backlog, indicating robust demand for its services. Despite a flat organic backlog growth in the Global segment, largely due to timing issues, the overall outlook remains positive with strong guidance for 2025.
Q4-2024 Updates
Positive Updates
Record Net Revenue and Growth
Stantec delivered record net revenues of CAD5.9 billion for 2024, up 15.8% compared to 2023, driven by 7.4% organic growth and 7.5% acquisition growth.
Strong EBITDA and EPS Performance
Adjusted EBITDA grew to CAD980 million, up 18%, with an increased margin of 16.7%. Adjusted EPS also increased by over 20% to CAD4.42 compared to 2023.
Significant Backlog Increase
Stantec's backlog reached a record CAD7.8 billion, representing a 24.1% increase from December 2023, driven by 9.7% acquisition and 8.5% organic growth.
Notable Global Business Growth
Global business net revenue grew by 32.6% in Q4, with 7.3% organic growth and 21.8% acquisition growth, driven by significant projects in the U.K. and Dubai.
Water and Buildings Business Strength
Both Water and Buildings businesses experienced double-digit organic growth, driven by robust public sector demand and significant project wins in healthcare and water security.
Dividend Increase
The Board approved a 7.1% increase to the dividend, now at CAD0.90 per share on an annualized basis, reflecting the company's strong earnings growth.
Negative Updates
Flat Organic Backlog Growth in Global
While the overall Global business showed strong revenue growth, the organic backlog growth in Global was relatively flat, primarily due to timing issues and high project burn rates in New Zealand.
Company Guidance
During the call discussing Stantec's Q4 and full-year 2024 results, guidance for 2025 was outlined, indicating expectations of robust growth across various metrics. The company expects net revenue growth of 7% to 10%, fueled by strong organic and acquisition growth, with adjusted EBITDA margins projected to be between 16.7% and 17.3%. Stantec forecasts adjusted EPS growth in the range of 16% to 19%, driven by continued operational excellence and solid project execution. Additionally, the backlog reached a record CAD7.8 billion, representing a 24.1% increase from the previous year, which underscores strong demand across its geographies, particularly in the U.S., Canada, and Global sectors. The company is optimistic about continued momentum in water security, infrastructure, and energy sectors, with additional opportunities anticipated from macroeconomic factors and policy shifts.

Stantec Corporate Events

Business Operations and Strategy
Stantec to Lead Design for Mississauga’s Dundas BRT Corridor
Positive
May 8, 2025

Stantec has been selected by the City of Mississauga to lead the design and contract administration for the Dundas Bus Rapid Transit Mississauga East Corridor, a project aimed at enhancing regional transit connectivity and supporting urban growth. With a budget of C$580 million, the project will include dedicated bus lanes, improved accessibility, and environmentally friendly practices, aligning with regional transportation plans and the city’s commitment to sustainable development.

Spark’s Take on TSE:STN Stock

According to Spark, TipRanks’ AI Analyst, TSE:STN is a Outperform.

Stantec’s overall stock score reflects strong financial performance and positive earnings guidance, supported by strategic corporate events. The high valuation is a concern but is offset by the company’s growth potential and solid market positioning. The absence of EBIT and rising debt levels are key risks, but the company’s strengths in revenue growth and cash flow management provide a favorable outlook.

To see Spark’s full report on TSE:STN stock, click here.

Business Operations and StrategyRegulatory Filings and Compliance
Stantec to Design Largest PFAS Treatment System in Northwestern US
Positive
Apr 30, 2025

Stantec has been selected by the City of Vancouver, Washington, to design the largest PFAS treatment system in the Northwestern US, aiming to provide cleaner drinking water by removing harmful substances. This project aligns with the EPA’s new regulations requiring public water utilities to reduce PFAS by 2029, showcasing Stantec’s role in helping municipalities meet these standards and ensuring long-term water safety and reliability.

Spark’s Take on TSE:STN Stock

According to Spark, TipRanks’ AI Analyst, TSE:STN is a Outperform.

Stantec’s overall stock score reflects a strong financial performance and positive earnings guidance, supported by strategic corporate events. The high valuation is a concern but is offset by the company’s growth potential and solid market positioning. The absence of EBIT and rising debt levels are key risks, but the company’s strengths in revenue growth and cash flow management provide a favorable outlook.

To see Spark’s full report on TSE:STN stock, click here.

Business Operations and StrategyFinancial Disclosures
Stantec’s 2024 Sustainability Report Highlights Global Impact and Financial Success
Positive
Apr 22, 2025

Stantec has released its 18th annual Sustainability Report, highlighting its achievements in sustainability and financial performance for 2024, with revenues of $4.63 billion. The report underscores Stantec’s commitment to sustainable development goals and its recognition as a top sustainable corporation. Key projects include environmental initiatives in Australia, Canada, the UK, the US, and Uruguay, showcasing Stantec’s role in addressing global challenges and driving community success.

Spark’s Take on TSE:STN Stock

According to Spark, TipRanks’ AI Analyst, TSE:STN is a Outperform.

Stantec’s overall stock score reflects strong financial performance and positive earnings guidance, underscored by strategic corporate events. Despite high valuation concerns, the company’s growth potential and market positioning support a favorable outlook. The absence of EBIT and rising debt levels are areas to monitor, but the company remains well-positioned in its industry.

To see Spark’s full report on TSE:STN stock, click here.

Shareholder MeetingsFinancial Disclosures
Stantec Announces Q1 2025 Results Release and Annual Shareholder Meeting
Neutral
Apr 14, 2025

Stantec has announced the release of its first quarter 2025 financial results, scheduled for May 14, 2025, followed by a webcast and conference call on May 15, 2025, led by the company’s CEO and CFO. Additionally, Stantec will hold its annual general meeting of shareholders on May 15, 2025, in a hybrid format, allowing participation both in person and via live webcast. These events are significant for stakeholders as they provide insights into the company’s financial performance and strategic direction.

Spark’s Take on TSE:STN Stock

According to Spark, TipRanks’ AI Analyst, TSE:STN is a Outperform.

Stantec’s overall stock score reflects strong financial performance and positive earnings guidance, underscored by strategic corporate events. Despite high valuation concerns, the company’s growth potential and market positioning support a favorable outlook. The absence of EBIT and rising debt levels are areas to monitor, but the company remains well-positioned in its industry.

To see Spark’s full report on TSE:STN stock, click here.

M&A TransactionsBusiness Operations and Strategy
Stantec Expands Irish Presence with Ryan Hanley Acquisition
Positive
Apr 8, 2025

Stantec has acquired Ryan Hanley, an Irish engineering and environmental consultancy, to enhance its presence in Ireland, particularly in the water sector. This acquisition builds on a successful joint venture between the two companies, aiming to leverage Ryan Hanley’s local expertise and Stantec’s global resources to address Ireland’s infrastructure challenges and expand into new markets such as energy and transport.

Spark’s Take on TSE:STN Stock

According to Spark, TipRanks’ AI Analyst, TSE:STN is a Outperform.

Stantec exhibits strong financial performance with impressive revenue growth and cash flow management. Technical indicators support a positive outlook, though high valuation may limit immediate upside potential. The company benefits from strong earnings guidance and positive corporate events, reinforcing its strategic market positioning.

To see Spark’s full report on TSE:STN stock, click here.

Business Operations and Strategy
Stantec to Design €3.2 Billion Semiconductor Facility in Italy
Positive
Feb 19, 2025

Stantec, alongside its partner Drees & Sommer, has been selected to provide design services for Silicon Box’s €3.2 billion semiconductor assembly and test facility in Northern Italy. This facility, which is Silicon Box’s first manufacturing expansion outside Singapore, is expected to create approximately 1,600 jobs and serve as a catalyst for advanced manufacturing investments in Italy, supporting initiatives in artificial intelligence, mobile technologies, and more. Stantec’s involvement underscores its commitment to sustainable development and aligns with the European Commission’s standards, while also reinforcing Silicon Box’s strategy to expand its semiconductor industry presence in Europe.

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.