Does AECOM's Record Backlog Signal Strong Infrastructure Demand Ahead?

AECOM ACM is seeing strong momentum from rising infrastructure investment across global markets. Rising investment in transportation networks, water systems and environmental infrastructure is creating a steady pipeline of projects. This environment is supporting strong demand for engineering and consulting services while improving visibility into future activity for infrastructure firms.

AECOM continues to benefit from this favorable demand environment. The company’s net service revenues (“NSR”), which exclude subcontractor and other direct costs, are supported by strength in transportation, water and environmental markets. In the first quarter of fiscal 2026, NSR increased 2.7% on an adjusted basis to $1.85 billion. Growth remained particularly strong in the Americas segment, where NSR rose 9% year over year.

The company’s backlog highlights the scale of this demand. As of the first quarter of fiscal 2026, backlog totaled $25.96 billion, reflecting an 8.7% increase from $23.88 billion recorded in the prior-year quarter. AECOM also recorded its 21st consecutive quarter with a book-to-burn ratio above 1x, demonstrating continued strength in project awards and steady demand for infrastructure services.

AECOM’s strategic capabilities are also helping sustain backlog growth. The Advisory business assists clients in planning infrastructure investments and managing risks in complex projects. The Program Management business supports the delivery of large-scale developments across multiple markets. Over time, the company expects these two businesses to account for nearly 50% of total operations.

Investments in leadership, technical expertise and artificial intelligence are further enhancing project execution and strengthening the company’s competitive position, supporting long-term revenue visibility.

Peer Backlogs Reinforce Revenue Visibility

Rising infrastructure investment is also strengthening revenue visibility for AECOM’s peers, particularly Fluor Corporation FLR and Sterling Infrastructure, Inc. STRL. Both companies are supported by expanding project pipelines across complex infrastructure, industrial and mission-critical development.

Fluor is also strengthening project visibility through a diversified backlog across engineering, procurement and construction markets. At the end of 2025, the company reported a backlog of $25.5 billion, reflecting stable demand across sectors such as LNG, mining and metals, advanced technologies, life sciences, nuclear fuels and national security programs. Approximately 81% of the backlog is structured as reimbursable work, offering better cost visibility and balanced project risk. During 2025, Fluor secured $12 billion in new awards, with nearly 87% structured as reimbursable contracts, while about $1 billion of positive backlog adjustments reflected normal project growth across ongoing developments.

Sterling is also improving forward visibility through exposure to large, multi-phase projects. At the end of 2025, the company reported a signed backlog of about $3 billion, up 78% from the prior year. When combined with $301 million of unsigned awards and more than $1 billion of future-phase opportunities, total potential work approaches $4.5 billion. Strong demand for mission-critical projects such as data centers is supporting Sterling’s E-Infrastructure segment and long-term activity.

ACM Stock’s Price Performance & Valuation Trend

Shares of this Texas-based provider of professional, technical and management solutions have trended downward 5.9% in the past three months, underperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 index.

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ACM stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 14.96, as evidenced by the chart below.

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Earnings Estimate Revision of ACM

ACM’s earnings estimates for fiscal 2026 and 2027 have trended upward in the past 30 days. The revised estimates for fiscal 2026 and 2027 imply year-over-year growth of 13.5% and 12%, respectively.

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AECOM currently carries a Zacks Rank #2 (Buy). 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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