Stantec (STN) AI Stock Analysis

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Stantec

(TSX:STN)

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Rating:73Outperform

Price Target:CAD 115.00▲(13.94% Upside)

Action:upgraded

Date:08/19/26

Overall score reflects solid financial performance and a strong earnings update (margin expansion, EPS growth, and record backlog supporting outlook). This is tempered by mixed technicals (below 100/200-day averages) and a valuation that offers limited dividend support at a ~23x P/E.

Positive Factors

Record backlog supports multi-month revenue visibilityThe record backlog provides substantial visibility into future billable work and supports revenue conversion over the next several quarters. Organic backlog growth and strength in Global and Water also indicate broad demand rather than dependence on one market.

Negative Factors

Recent growth is slowing and Infrastructure organic growth was flatThe sharp multi-year expansion has not translated into comparable recent growth, creating greater reliance on acquisitions and future project ramps. Flat Infrastructure organic growth also signals that timing and demand conversion could weigh on growth if delays persist.

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

Market Cap: CAD 8.13B
Dividend Yield: 0.95%
Average Volume (3M): 488.48K
Price to Earnings (P/E): 22.8
Beta (1Y): 0.85
Revenue Growth: 9.97%
EPS Growth: 15.80%
Country: Canada
Employees: 34,000
Sector: Industrials
Sector Strength: 63
Industry: Engineering & Construction

Stantec Business Overview & Revenue Model

Company Description

Stantec Inc. operates as a prominent global professional services firm, offering comprehensive consulting in engineering, architecture, and environmental domains. The company specializes in infrastructure and facilities, serving clients across Canada...

How the Company Makes Money

Stantec primarily makes money by delivering fee-based professional services on client projects. Revenue is generated when the company performs billable work—typically charged under time-and-materials (hourly billing rates for staff time plus reimburs...

Stantec Earnings Call Summary

Earnings Call Date:Aug 11, 2026(Q2-2026)|% Change Since:-2.28%|Next Earnings Date:Nov 11, 2026

Earnings Call SentimentPositive

The call emphasized robust top-line growth (net revenue +~11.5%), material margin expansion (adjusted EBITDA margin 18.7%, +90 bps YoY), record backlog ($9.2B, +17.5% YoY), strong adjusted EPS (+18.4%) and several large project wins and strategic acquisitions. Management acknowledged near-term timing-related softness in U.S. organic growth, working-capital/headcount impacts and a valuation gap affecting some M&A opportunities, but expects organic acceleration in H2, supported by backlog and the Page integration. On balance the positive operational and financial momentum substantially outweighs the highlighted near-term execution and working-capital challenges.

Positive Updates

Revenue Growth

Net revenue of $1.8 billion in Q2 2026, up ~11.5% year-over-year (management cited 'almost 12%'); driven by ~3.7% organic growth and ~7.1% acquisition growth (primarily Page). Gross revenue was $2.2 billion.

Negative Updates

U.S. Organic Softness and Project Timing Delays in Q2

Some U.S. segments experienced slower-than-expected organic growth in Q2 due to timing issues: several projects wrapped as scheduled while awarded work was slower to ramp (e.g., a Navy program, a large electrical utility project, and a public transit project). This contributed to weaker Q2 organic growth in the U.S. and softer organic backlog trends in the quarter.

Company Guidance

Stantec reiterated full-year targets while tightening its margin range: it now expects net revenue growth of 8.5%–11.5% (overall organic growth in the mid-single-digit range), adjusted EBITDA margin of 17.8%–18.3% and adjusted EPS growth of 15%–18%; by segment, U.S. organic growth is expected in the mid-single-digits, Canada mid-single-digits and Global high-single-digits (with Page converting from acquisition to organic in Q3). Those targets are backed by Q2 results of gross revenue $2.2B and net revenue $1.8B (+11.5% YoY: +3.7% organic, +7.1% acquisition), a record Q2 adjusted EBITDA margin of 18.7% (+90 bps YoY) and adjusted EPS of $1.61 (+18.4%), project margins of 54.5% (+30 bps), trailing‑12‑month EBITDA margin of 18% (+80 bps), a record backlog of $9.2B (+17.5% YoY, ~13 months of work, +7% organic; Global backlog ~+25%, Water backlog >+10% organic), YTD operating cash flow of $116M, the July acquisition of 200‑person Niche in Australia, a Q2 NCIB repurchase of ~1.7M shares (~1.5%) for ~$175M, net debt/adjusted EBITDA of 1.3x (target 1–2x) and DSO of 75 days.

Stantec Financial Statement Overview

Summary

Fundamentals are solid: strong multi-year revenue expansion, healthy profitability (TTM net margin ~6.2%; EBIT margin improved vs 2025), and robust cash generation (TTM FCF ~666M, ~0.89x net income). Offsets include slowed recent revenue growth, some margin volatility versus prior years, and meaningful (though improving) leverage with sizable debt still outstanding.

Income Statement

78Positive

Balance Sheet

70Positive

Cash Flow

74Positive

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	8.10B	8.14B	5.87B	5.07B	4.46B	3.64B
Gross Profit	3.51B	3.18B	3.20B	2.74B	2.42B	1.96B
EBITDA	1.17B	1.09B	973.80M	838.50M	716.60M	539.70M
Net Income	505.00M	479.40M	361.50M	316.50M	247.00M	200.70M
Balance Sheet
Total Assets	8.19B	7.96B	6.96B	5.77B	5.65B	5.23B
Cash, Cash Equivalents and Short-Term Investments	377.30M	398.10M	228.50M	352.90M	148.30M	193.90M
Total Debt	2.75B	3.13B	2.04B	1.70B	1.92B	1.92B
Total Liabilities	4.80B	4.72B	4.01B	3.32B	3.37B	3.22B
Stockholders Equity	3.39B	3.24B	2.95B	2.45B	2.29B	2.00B
Cash Flow
Free Cash Flow	666.20M	791.00M	504.10M	419.40M	235.80M	351.20M
Operating Cash Flow	744.50M	862.90M	603.10M	520.00M	304.30M	397.00M
Investing Cash Flow	-470.70M	-534.10M	-605.00M	-201.70M	-73.80M	-764.80M
Financing Cash Flow	-278.50M	-139.50M	-152.10M	-109.30M	-296.70M	276.50M

Stantec Technical Analysis

Technical Analysis SentimentPositive

Last Price100.93

Price Trends

50DMA98.71Positive

100DMA98.84Positive

200DMA110.11Negative

Market Momentum

MACD0.78Negative

RSI58.25Neutral

STOCH76.66Neutral

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 100.93 is above the 20-day moving average (MA) of 97.91, above the 50-day MA of 98.71, and below the 200-day MA of 110.11, indicating a neutral trend. The MACD of 0.78 indicates Negative momentum. The RSI at 58.25 is Neutral, neither overbought nor oversold. The STOCH value of 76.66 is Neutral, 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 (63)

Financial Indicators

TSE:STN against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TSE:ATRL	85Outperform	CAD 13.66B	32.95	7.89%	0.09%	14.82%	-82.14%
TSE:BDT	76Outperform	CAD 3.77B	62.97	13.41%	1.24%	7.38%	-39.80%
TSE:STN	73Outperform	CAD 11.34B	22.78	15.26%	0.95%	9.97%	15.80%
TSE:WSP	72Outperform	CAD 25.15B	26.49	9.52%	0.80%	10.24%	14.12%
TSE:BDGI	64Neutral	CAD 2.81B	28.08	24.14%	0.92%	16.24%	10.17%
Sector *	63Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
TSE:ARE	63Neutral	CAD 3.38B	-63.94	-5.32%	1.56%	23.05%	-682.62%

* Industrials Sector Average

Performance Comparison

TSE:STN and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
TSE:STN	Stantec	100.93	-51.63	-33.84%
TSE:ATRL	Atkinsrealis	86.33	-11.46	-11.72%
TSE:BDGI	Badger Infrastructure Solutions Ltd.	83.58	10.82	14.87%
TSE:ARE	Aecon Group Inc.	49.23	18.85	62.06%
TSE:BDT	Bird Construction	68.01	38.68	131.91%
TSE:WSP	Wsp Global	186.52	-79.19	-29.80%

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: Aug 19, 2026

Stantec AI Stock Analysis