APi Group’s Strategic Leverage Fuels Growth: A Compelling Buy at Current Levels

APi Group (NYSE: APG) has emerged as a strategic juggernaut in the infrastructure and services sector, leveraging a newly fortified capital structure and a stock split to accelerate its growth trajectory. With Q1 2025 results exceeding expectations and ambitious 2028 targets in sight, the company is positioned to capitalize on its operational strengths and financial flexibility. Here’s why investors should act now.

Optimized Capital Structure: A Foundation for Ambition

APi’s recent credit facility expansion—raising revolving commitments to $750 million—marks a pivotal step in its financial strategy. By reducing the applicable margin on its Revolving Credit Facility and extending maturities to five years post-amendment, the company has slashed interest costs and secured long-term liquidity. This move not only lowers annual interest expenses but also creates a buffer to pursue acquisitions and organic growth initiatives. The extended maturity timeline further reduces refinancing risks, allowing APi to focus on executing its long-term vision.

The 2028 targets—$10+ billion in revenue, 16%+ adjusted EBITDA margins, and 60% of revenue from inspection/service sectors—now feel within reach. With $3.037 billion in debt and a strong current ratio of 1.47, APi’s balance sheet is robust yet agile. The reduced leverage and interest costs free up capital to invest in high-margin segments like Safety Services, which grew 13.4% in Q1, far outpacing the 6.8% decline in Specialty Services. This strategic focus aligns perfectly with the company’s goal of shifting its revenue mix toward higher-margin businesses.

The Stock Split: Boosting Liquidity and Accessibility

APi’s three-for-two stock split, effective June 30, 2025, is a shrewd move to democratize ownership. By increasing shares outstanding to ~415 million, the company lowers the per-share price, making it more attractive to retail investors and enhancing trading liquidity. This is particularly advantageous as the stock has historically traded at a premium that may have deterred smaller investors.

The split also signals confidence in APi’s valuation. With analysts at RBC and Truist recently raising price targets to $52 and $54—above the current $45 range—the stock appears undervalued relative to its growth prospects. The split’s timing, coupled with a new $1 billion share repurchase program, reinforces management’s belief that APi is poised for sustained appreciation.

Q1 Results and Analyst Upgrades: Execution at Full Throttle

APi’s Q1 2025 results were a masterclass in execution. Revenue surged 7.4% year-over-year to $1.7 billion, driven by Safety Services’ strong performance, while adjusted EPS of $0.37 beat estimates. The company raised its full-year revenue guidance to $7.4–7.6 billion, a 6–8% increase over 2024, and reaffirmed its Q2 guidance. Analysts have taken notice: RBC called the results “impressive” and highlighted APi’s margin-expansion potential, while Truist praised its disciplined capital allocation.

Why APi Is Undervalued Now—and Why to Buy

Despite these positives, APi’s stock trades at a P/E ratio of ~20x forward earnings—below its five-year average of ~23x and well below its growth peers. This disconnect presents an opportunity. With $3.0+ billion in cumulative free cash flow targeted by 2028 and a strong track record of hitting milestones, APi is primed to outperform.

The data underscores this thesis: APi’s stock has underperformed the S&P 500 YTD despite outpacing revenue and margin goals. Meanwhile, its debt-to-EBITDA ratio of ~3.5x remains manageable, leaving room for further leverage if needed.

Conclusion: A Rare Blend of Catalysts and Valuation

APi Group’s combination of strategic capital management, a liquidity-boosting stock split, and robust execution makes it a standout investment. The company is not just meeting targets—it’s redefining them. With a clear roadmap to $10 billion in revenue and analyst price targets signaling upside, now is the time to act. For long-term growth investors seeking a leveraged play on infrastructure and safety services, APi Group is a compelling buy at current levels.

The path forward is clear: APi’s strategic moves are not just tactical adjustments but foundational shifts to fuel dominance in its markets. Investors who miss this window may find themselves playing catch-up later.