Can ABM's EPS growth momentum continue into Q2 2025?

**ABM's EPS growth momentum is likely to face challenges in continuing into Q2 2025**. Here's why:

1. **Analyst Expectations**: William Blair has reduced its Q2 2025 earnings per share (EPS) estimates for ABM Industries, with the latest estimate being $0.89, down from the previous $0.93. This suggests that analysts are cautious about the company's future earnings growth.
2. **Macroeconomic Factors**: ABM has faced macroeconomic challenges, including remote work and slowing manufacturing, which have impacted its business segments. These factors could persist into Q2 2025, potentially affecting the company's financial performance.
3. **Strategic Initiatives**: While ABM has implemented strategic initiatives such as transitioning to a cloud-based ERP system, these changes may take time to fully realize their benefits. The temporary negative free cash flow due to the ERP system transition indicates that some challenges are associated with these initiatives.
4. **Financial Ratios**: The company's total indebtedness stands at $1.6 billion, with a debt to pro forma adjusted EBITDA ratio of 2.9 times. These financial ratios suggest that ABM is carrying significant debt, which could lead to increased interest expenses and potential financial strain if earnings growth does not keep pace with interest obligations.

In conclusion, while ABM has shown strong results in some areas, such as revenue growth and strategic contract wins, the potential challenges in continuing EPS growth momentum into Q2 2025 are notable. The company's ability to navigate macroeconomic headwinds, manage its ERP transition effectively, and maintain financial leverage will be critical in determining its future earnings trajectory.