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Stantec (TSE:STN)
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Stantec (STN) AI Stock Analysis

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Stantec

(NYSE:STN)

Rating:79Outperform
Price Target:
C$171.00
▲(11.61%Upside)
Stantec's overall stock score is driven by its strong financial performance and positive earnings outlook, bolstered by strategic acquisitions and project wins. While technical indicators are favorable, valuation concerns slightly temper the outlook.
Positive Factors
Earnings
Stantec's EBITDA increased 19% year-over-year, surpassing both the consensus and the analyst's estimates.
Financial performance
The target price increased to $145 due to upward estimate revisions and rolling forward the valuation base.
Strategic positioning
Stantec remains well-positioned to capitalize on secular demand trends including infrastructure development, energy transition, climate change, and reshoring.
Negative Factors
Competitive challenges
Despite positive outlooks, exceeding many targets like Adjusted EBITDA margin and Adjusted EPS growth remains a challenge amidst competitive pressures.

Stantec (STN) vs. iShares MSCI Canada ETF (EWC)

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 Earnings Call Summary

Earnings Call Date:May 14, 2025
(Q1-2025)
|
% Change Since: 15.98%|
Next Earnings Date:Aug 13, 2025
Earnings Call Sentiment Positive
Stantec's Q1 2025 performance was robust, characterized by strong revenue growth, successful acquisitions, and increased profitability. The company continues to expand its global presence and maintain a strong backlog. While there are some challenges in the U.S. market, particularly in government procurement, these are minor in comparison to the overall positive performance and outlook.
Q1-2025 Updates
Positive Updates
Strong Revenue and Growth
Stantec delivered net revenue of $1.6 billion in Q1 2025, up 13.3% year-over-year, with 5.9% organic growth and 3.2% acquisition growth.
Record Adjusted EBITDA and EPS Growth
Adjusted EBITDA grew by over 19% with a margin of 16.2%, and adjusted EPS increased by 29% compared to Q1 2024.
Successful Strategic Acquisitions
Stantec announced two major acquisitions: Page, a 1,400-person architecture and engineering firm, and Ryan Hanley, a 150-person consultancy in Ireland, enhancing expertise in key growth areas.
Strong Performance in Canada and Global Markets
Canada saw 15% net revenue growth (12.2% organic), while global business delivered 20.3% growth in net revenue with 7.5% organic growth.
Record Backlog
Backlog reached an all-time high of $7.9 billion, with almost 13% year-over-year growth, 7.5% of which was organic.
Improved Cash Flow and Leverage
Operating cash flow increased by 136% year-over-year, and the net debt to adjusted EBITDA ratio was reduced to 1.1 times.
Negative Updates
Slower Growth in U.S. Organic Revenue
U.S. Q1 net revenues increased by 9.7% but organic growth was only 2.4% due to project cycle timing in the Water segment.
Challenges in Government Procurement
Some slowing in procurement cycles in the U.S. government due to changes in procurement practices, affecting project timelines.
Company Guidance
In the first quarter of 2025, Stantec showcased strong financial performance with a net revenue increase of 13.3% year-over-year, reaching $1.6 billion. The growth was driven by a 5.9% organic increase and 3.2% from acquisitions. Adjusted EBITDA saw a rise of over 19%, resulting in a margin of 16.2%, while adjusted EPS grew by 29% compared to Q1 2024. Stantec also reported robust regional growth, with Canada achieving 12.2% organic growth and the U.S. recording a 9.7% increase in net revenues. The company announced strategic acquisitions, including Page and Ryan Hanley, to bolster its market position. Stantec's backlog reached a record $7.9 billion, reflecting a 13% increase from the previous year, with significant contributions from the Water and Energy & Resources sectors. The company's outlook remains optimistic, maintaining a guidance of 7% to 10% net revenue growth for the year.

Stantec Financial Statement Overview

Summary
Stantec demonstrates robust financial performance with consistent revenue growth, improving profit margins, and strong cash flow management. The company's stable debt position and increasing return on equity further enhance its financial health, despite moderate reliance on debt financing.
Income Statement
85
Very Positive
Stantec's income statement reveals robust growth with a steady increase in revenue over the years, culminating in a TTM revenue of $7.7 billion. Gross profit margin remains strong, and the net profit margin has improved to 5.01% in TTM from 4.82% in 2024, indicating efficient cost management. The EBIT and EBITDA margins have also shown consistent improvement, reflecting operational efficiency and profitability.
Balance Sheet
75
Positive
The balance sheet reflects a balanced growth trajectory with a healthy equity base. The debt-to-equity ratio has remained stable, indicating effective leverage management. Return on equity has been steadily growing, showing improved profitability relative to equity. However, the equity ratio indicates a moderate reliance on debt financing, which could pose risks if not managed well.
Cash Flow
80
Positive
Stantec's cash flow statement demonstrates strong cash generation capabilities, with TTM operating cash flow surpassing $666 million. The free cash flow has consistently grown, showing effective capital expenditure management. The operating cash flow to net income ratio indicates solid cash conversion efficiency.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue7.70B7.50B6.48B5.68B4.58B4.73B
Gross Profit3.13B3.20B2.46B2.42B1.96B1.93B
EBITDA931.50M901.70M801.00M677.50M523.40M491.50M
Net Income385.90M361.50M331.20M247.00M200.70M171.10M
Balance Sheet
Total Assets6.94B6.96B6.08B5.65B5.23B4.39B
Cash, Cash Equivalents and Short-Term Investments282.80M254.70M352.90M148.30M193.90M285.00M
Total Debt2.05B2.04B1.73B1.92B1.92B1.32B
Total Liabilities3.90B4.01B3.32B3.37B3.22B2.46B
Stockholders Equity3.04B2.95B2.76B2.29B2.00B1.93B
Cash Flow
Free Cash Flow572.10M504.10M444.10M229.40M346.40M569.60M
Operating Cash Flow666.70M603.10M544.70M304.30M397.00M603.80M
Investing Cash Flow-218.50M-605.00M-201.70M-73.80M-764.80M-102.00M
Financing Cash Flow-419.90M-152.10M-134.00M-296.70M276.50M-412.60M

Stantec Technical Analysis

Technical Analysis Sentiment
Positive
Last Price153.21
Price Trends
50DMA
142.39
Positive
100DMA
130.47
Positive
200DMA
122.13
Positive
Market Momentum
MACD
2.69
Negative
RSI
73.35
Negative
STOCH
93.59
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 153.21 is above the 20-day moving average (MA) of 148.11, above the 50-day MA of 142.39, and above the 200-day MA of 122.13, indicating a bullish trend. The MACD of 2.69 indicates Negative momentum. The RSI at 73.35 is Negative, neither overbought nor oversold. The STOCH value of 93.59 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 (67)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
TSBDT
79
Outperform
C$1.64B16.3526.31%2.83%16.14%27.71%
TSSTN
79
Outperform
C$17.22B44.6213.13%0.59%15.62%9.66%
TSWSP
78
Outperform
C$36.76B51.249.42%0.53%16.77%21.38%
76
Outperform
$1.71B25.5719.89%1.48%10.97%24.27%
73
Outperform
C$16.39B56.258.66%0.08%12.05%1.32%
67
Neutral
$2.55B12.779.94%4.12%-2.21%31.02%
TSARE
55
Neutral
C$1.30B-9.26%3.68%1.70%-154.73%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
TSE:STN
Stantec
152.50
33.92
28.60%
TSE:ATRL
AtkinsRealis
98.98
40.83
70.21%
TSE:BDGI
Badger Infrastructure Solutions
52.91
15.65
42.01%
TSE:BDT
Bird Construction
29.87
4.38
17.18%
TSE:ARE
Aecon Group Inc.
20.66
6.34
44.27%
TSE:WSP
WSP Global
284.97
62.06
27.84%

Stantec Corporate Events

Financial Disclosures
Stantec to Announce Q2 2025 Financial Results
Neutral
Jul 9, 2025

Stantec announced it will release its second quarter 2025 financial results on August 13, 2025, followed by a webcast and conference call on August 14, 2025, led by CEO Gord Johnston and CFO Vito Culmone. This announcement is significant for stakeholders as it provides insights into the company’s financial performance and strategic direction, reinforcing its position as a leader in sustainable design and engineering.

The most recent analyst rating on (TSE:STN) stock is a Buy with a C$134.00 price target. To see the full list of analyst forecasts on Stantec stock, see the TSE:STN Stock Forecast page.

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.

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.

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.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Jul 09, 2025