AECOM Stock Plunges 29.7% in 6 Months: Should You Buy the Dip?

AECOM ACM, a leading global infrastructure consulting firm, has experienced a sharp correction in recent months. Over the past six months, the stock has plummeted 29.7%, significantly underperforming the Zacks Engineering – R&D Services industry, which gained 15.8% during the same period. The stock also lagged the broader Zacks Construction sector, which slipped 0.4%, and the S&P 500, which advanced 3.3%.

AECOM Price Performance

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The steep pullback has pushed AECOM shares far below their previous highs. As of March 12, the stock trades around $59.80 compared with a 52-week high of $135.52. This raises a key question for investors: Does the decline create a buying opportunity, or are further challenges ahead?

AECOM’s Fiscal Q1 Results Reflect Solid Operational Execution

AECOM released its fiscal first-quarter 2026 results on Feb. 9, delivering solid operational performance despite some top-line pressure. Revenues totaled $3.83 billion, representing a decline of roughly 5% year over year. However, the company continued to expand profitability.

Adjusted earnings per share came in at $1.29 (down 2% from a year ago), while adjusted EBITDA reached $287 million (up 6%). Importantly, the company achieved segment operating margin of 16.4%, an improvement of 100 basis points year over year, reflecting operating efficiency and the benefits of strategic investments.

Backlog also continued to expand, reaching a new record level of approximately $26 billion, supported by a 1.5X book-to-burn ratio. This marks the 21st consecutive quarter in which AECOM’s book-to-burn ratio exceeded 1, highlighting consistent demand for its services.

Despite missing the Zacks Consensus Estimates’ earnings per share (EPS) expectations, the company raised its full-year outlook, reflecting confidence in project visibility and operational momentum. It is now expecting adjusted EPS in the range of $5.85-$6.05 (prior expectation was between $5.65 and $5.85). This indicates a 12% improvement from fiscal 2025 levels on a constant-currency basis, considering the midpoint of the guidance. AECOM expects adjusted EBITDA in the range of $1,270-$1,305 million (prior expectation was between $1,265 and $1,305 million). This indicates 7% year-over-year growth at the midpoint.

Infrastructure Spending Trends Provide Strong Visibility

AECOM’s growth outlook remains closely tied to global infrastructure spending. Structural demand for infrastructure development continues to support project pipelines across transportation, water systems, energy networks and environmental services. Management notes that infrastructure needs remain massive, with the United States alone facing a multi-trillion-dollar investment gap over the next decade. This spending gap supports long-term demand for engineering, design and program management services.

The company is also securing high-profile global projects. Recent contract wins include participation in the Brisbane 2032 Olympic and Paralympic Games infrastructure program and work related to major water infrastructure investments with Scottish Water. Such projects typically span multiple years, providing revenue visibility and strengthening AECOM’s backlog.

AECOM Expanding Advisory Services to Boost Margins

AECOM is increasingly shifting toward higher-value professional services. One of the company’s key strategies is expanding its advisory and program management platform, which targets a large global market for infrastructure consulting services. These offerings allow AECOM to engage earlier in project planning and capture a larger portion of the project lifecycle. This shift toward consulting and advisory services also supports margin expansion, as these activities typically carry higher profitability than traditional engineering work. In addition, the company is investing in advanced technology and artificial intelligence to improve project delivery and client outcomes. Management believes that technology adoption can help unlock new opportunities rather than simply reducing project costs.

AI and Technology Strengthening AECOM’s Competitive Edge

AECOM is integrating digital tools and artificial intelligence into its infrastructure delivery platform. These technologies help engineers design projects more efficiently, analyze complex infrastructure systems and improve decision-making across project lifecycles. Management has emphasized that these capabilities can expand the value created for clients rather than replacing traditional engineering services. In many cases, improved productivity enables clients to undertake additional projects or expand the scope of existing programs. As infrastructure projects become more complex and data-driven, technology capabilities are expected to become an increasingly important differentiator among engineering firms.

AECOM’s Capital Allocation Strategy Driving Shareholder Value

AECOM continues to focus heavily on shareholder returns. During the fiscal first quarter, the company returned more than $340 million to shareholders through dividends and share repurchases. The board also approved an increase in the company’s share repurchase authorization to $1 billion, reflecting management’s confidence in long-term cash flow generation.

The company maintains a solid balance sheet, with net leverage of roughly 1.0X, providing flexibility to continue investing in growth initiatives while returning capital to investors. This disciplined capital allocation strategy has helped drive steady EPS growth in recent years.

ACM Stock’s Valuation Appears Attractive

AECOM’s recent share price decline has significantly lowered its valuation relative to peers. The stock currently trades at approximately 14.26X forward 12-month earnings compared with the industry average of about 25.82X. This discount suggests that much of the recent pessimism may already be reflected in the share price.

AECOM Valuation – P/E F12M

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At the same time, analyst expectations remain positive. The Zacks Consensus Estimate for fiscal 2026 EPS has increased to $5.97 from $5.65 over the past month. The updated estimate implies 13.5% earnings growth for fiscal 2026.

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Revenue is also expected to grow modestly, with consensus projections indicating around 4.8% year-over-year revenue growth. These trends suggest that AECOM’s long-term growth outlook remains intact despite the stock’s recent decline.

Challenges Investors Should Watch for ACM Stock

While AECOM’s fundamentals remain solid, investors should remain aware of potential risks. Infrastructure spending cycles can be influenced by political developments and government budget decisions. Delays in project funding or disruptions such as government shutdowns could slow contract awards.

The company’s international operations also face varying economic conditions across regions. Geopolitical uncertainty or funding shifts in certain markets may create volatility in project activity.

In addition, the engineering and infrastructure services industry is highly competitive. Large projects often attract multiple bidders, which can create pricing pressure.

AECOM’s Competitors in the Infrastructure Consulting Industry

AECOM operates in a competitive global engineering services market. Several companies compete with AECOM for large infrastructure projects and consulting assignments.

One key competitor is Jacobs Solutions Inc. J. The company focuses on consulting, engineering and advanced infrastructure services. Jacobs competes directly with AECOM across major infrastructure programs and advisory services. Jacobs also emphasizes digital engineering and data-driven infrastructure solutions, positioning it as a major rival. J stock has gained 8.6% in the past six months.

Another important competitor is Fluor Corporation FLR. The company provides engineering, procurement and construction services across energy, infrastructure and industrial markets. Fluor frequently competes with AECOM for large global projects requiring integrated engineering and program management capabilities. FLR stock has gained 24.5% in the past six months.

A third competitor is KBR Inc. KBR. The company has expanded its engineering and government services capabilities in recent years. KBR competes with AECOM in defense, infrastructure and advisory services. The company’s focus on technology-enabled engineering solutions also overlaps with AECOM’s strategy. KBR stock has plunged 26.4% in the past six months.

Together, Jacobs, Fluor and KBR represent major competitors in the infrastructure consulting and engineering industry.

Should Investors Consider Buying AECOM Stock Now?

AECOM’s recent stock decline contrasts with the company’s operational momentum. The firm continues to benefit from strong infrastructure demand, record backlog levels and expanding margins. Strategic investments in advisory services and technology could further strengthen its competitive position in the coming years.

At the same time, the stock’s valuation has become more attractive following the recent correction. Although macroeconomic risks and project timing uncertainties remain, AECOM appears well positioned to benefit from the long-term global infrastructure investment cycle.

With the stock currently holding a Zacks Rank #2 (Buy), the recent pullback could represent an appealing entry point for long-term investors seeking exposure to infrastructure growth trends. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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