AECOM Shares Drop 29.7% Over Six Months: Is Now a Good Time to Invest?

AECOM Stock Experiences Significant Decline

AECOM (ACM), a prominent global infrastructure consulting company, has seen its share price drop sharply in recent months. Over the last half-year, the stock fell by 29.7%, trailing well behind the Zacks Engineering – R&D Services industry, which rose 15.8% during the same timeframe. Additionally, AECOM underperformed both the broader Zacks Construction sector, which dipped 0.4%, and the S&P 500, which advanced 3.3%.

Recent Price Movement

Image Source: Zacks Investment Research

This substantial downturn has pushed AECOM shares far below their previous peak. As of March 12, the stock trades near $59.80, compared to its 52-week high of $135.52. Investors are now left to consider whether this drop presents a buying opportunity or signals further difficulties ahead.

Strong Operational Performance in Fiscal Q1

On February 9, AECOM reported its fiscal first-quarter 2026 results, demonstrating solid operational execution despite revenue pressure. The company posted $3.83 billion in revenue, marking a 5% decrease year-over-year. Nevertheless, profitability continued to improve.

• Adjusted earnings per share were $1.29, down 2% from the prior year.
• Adjusted EBITDA reached $287 million, up 6% year-over-year.
• Segment operating margin improved to 16.4%, a 100 basis point increase, reflecting greater efficiency and successful strategic investments.

AECOM’s backlog hit a new record of about $26 billion, supported by a 1.5X book-to-burn ratio, marking the 21st consecutive quarter above 1. This underscores steady demand for its services.

Although the company missed Zacks Consensus EPS estimates, it raised its full-year guidance, showing confidence in its project pipeline and operational momentum. The new adjusted EPS range is $5.85-$6.05, up from $5.65-$5.85, representing a 12% increase over fiscal 2025 at the midpoint. Adjusted EBITDA is now expected between $1,270-$1,305 million, indicating 7% growth year-over-year at the midpoint.

Infrastructure Spending Trends Support Growth

AECOM’s prospects are closely linked to global infrastructure investment. Ongoing structural demand for infrastructure projects—spanning transportation, water, energy, and environmental services—continues to drive its pipeline. Management highlights the immense infrastructure needs, particularly in the U.S., where a multi-trillion-dollar investment gap is projected over the next decade. This gap ensures sustained demand for engineering, design, and management services.

The company has recently secured major international contracts, including work for the Brisbane 2032 Olympic and Paralympic Games and significant water infrastructure projects with Scottish Water. These long-term projects provide revenue stability and bolster AECOM’s backlog.

Advisory Services Expansion Enhances Profitability

AECOM is increasingly focusing on higher-margin professional services. By expanding its advisory and program management offerings, the company aims to capture a larger share of the global infrastructure consulting market. This approach allows AECOM to participate earlier in project planning and benefit throughout the project lifecycle. Advisory and consulting services typically yield higher margins than traditional engineering work. The company is also investing in advanced technology and artificial intelligence to enhance project outcomes, believing that tech adoption will unlock new opportunities rather than simply reduce costs.

Technology and AI Bolster Competitive Advantage

Digital tools and artificial intelligence are being integrated into AECOM’s infrastructure delivery platform. These innovations help engineers design more efficiently, analyze complex systems, and improve decision-making throughout projects. Management emphasizes that these technologies add value for clients, enabling them to take on more projects or expand existing ones. As infrastructure projects become increasingly complex and data-driven, technological capabilities will become a key differentiator among engineering firms.

Capital Allocation Strategy Benefits Shareholders

AECOM remains committed to delivering value to shareholders. In the fiscal first quarter, the company returned over $340 million through dividends and share buybacks. The board also increased the share repurchase authorization to $1 billion, reflecting confidence in future cash flow.

The company maintains a strong balance sheet, with net leverage around 1.0X, allowing continued investment in growth while returning capital to investors. This disciplined approach has supported steady EPS growth in recent years.

Valuation Offers Potential Opportunity

The recent drop in AECOM’s share price has made its valuation more attractive compared to industry peers. The stock currently trades at about 14.26 times forward 12-month earnings, well below the industry average of 25.82 times, suggesting that much of the negative sentiment may already be priced in.

Valuation Comparison

Image Source: Zacks Investment Research

Analysts remain optimistic, with the Zacks Consensus Estimate for fiscal 2026 EPS rising to $5.97 from $5.65 in the past month, implying 13.5% earnings growth for the year.

Image Source: Zacks Investment Research

Revenue is also expected to increase modestly, with consensus forecasts pointing to approximately 4.8% year-over-year growth. These trends indicate that AECOM’s long-term growth prospects remain strong despite recent share price weakness.

Risks and Challenges for ACM Investors

Despite solid fundamentals, investors should be mindful of potential risks. Infrastructure spending is subject to political and government budget influences, and delays or disruptions—such as government shutdowns—could impact contract awards.

AECOM’s international operations face varying economic conditions and geopolitical uncertainties, which may affect project activity in different regions.

Competition in the engineering and infrastructure services sector is intense, with large projects often attracting multiple bidders and creating pricing pressure.

Key Competitors in Infrastructure Consulting

AECOM operates in a highly competitive global engineering market, facing several major rivals:

• Jacobs Solutions Inc. (J): Specializes in consulting, engineering, and advanced infrastructure services, directly competing with AECOM in major programs and advisory services. Jacobs emphasizes digital engineering and data-driven solutions, and its stock has risen 8.6% in the past six months.
• Fluor Corporation (FLR): Provides engineering, procurement, and construction services across energy, infrastructure, and industrial markets. Fluor often competes with AECOM for large global projects and has seen its stock climb 24.5% over the last six months.
• KBR Inc. (KBR): Has expanded its engineering and government services, competing with AECOM in defense, infrastructure, and advisory services. KBR’s focus on technology-enabled solutions aligns with AECOM’s strategy, though its stock has dropped 26.4% in the past six months.

These companies represent significant competition in the infrastructure consulting and engineering industry.

Is Now a Good Time to Buy AECOM Stock?

AECOM’s recent share price decline stands in contrast to its operational progress. The company continues to benefit from robust infrastructure demand, record backlog, and improving margins. Strategic investments in advisory services and technology are likely to further enhance its competitive position.

With the stock’s valuation now more favorable following the correction, and despite ongoing macroeconomic risks and project timing uncertainties, AECOM appears well placed to capitalize on the global infrastructure investment cycle.

Currently holding a Zacks Rank #2 (Buy), the recent pullback may offer an attractive entry point for investors interested in long-term infrastructure growth.