Stantec Stock Soars 21.01% on Strong Q1 Earnings

On July 28, 2025, Stantec's stock surged by 21.01% in pre-market trading, reflecting a significant bullish sentiment among investors.

Stantec's strategic positioning in the infrastructure sector is a key driver of its recent performance. The company's business model is closely aligned with global infrastructure megatrends, including investments in water systems, transportation networks, and energy transition projects. This alignment is evident in its first-quarter 2025 results, which showed a 13.3% year-over-year increase in net revenue to $1.6 billion. Organic growth of 5.9% was driven by various high-growth projects across different regions, including wastewater projects in Canada, rail expansions in the U.S., and energy transition work in Australia.

Stantec's geographic diversification further strengthens its market position. The company's operations span North America, Europe, and emerging markets, allowing it to capitalize on overlapping cycles of public and private spending. This multi-jurisdictional footprint ensures that Stantec is not reliant on a single market, providing resilience against regional volatility.

Stantec's financial performance is marked by operational discipline and pricing power. In Q1 2025, adjusted EBITDA rose 19.1% to $252.3 million, with margins expanding to 16.2%. The firm's $7.9 billion backlog, up 12.8% year-over-year, provides a clear runway for future revenue. This backlog includes high-margin projects such as the $1.1 billion Irving Pulp & Paper mill upgrade in New Brunswick and the PFAS water treatment project in Vancouver, Washington, which highlights Stantec's technical edge in addressing emerging contaminants.

While some critics may point to Stantec's forward P/E ratio of 25 as a sign of overvaluation, this premium reflects the market's recognition of its unique position in a sector with structural demand. The recent acquisition of Page, which adds 1,400 professionals in the U.S. architecture and engineering sector, further enhances Stantec's revenue base and diversifies its earnings streams. This acquisition positions Stantec to tap into the $1.2 trillion infrastructure bill's emphasis on modernizing buildings and data centers, reducing reliance on cyclical sectors like oil and gas.

For investors, Stantec's long-term growth potential is driven by its deliberate strategy of aligning with infrastructure tailwinds, executing high-margin projects, and expanding through accretive acquisitions. The firm's balance sheet, with a net debt-to-EBITDA ratio of 2.1x, provides the flexibility to fund acquisitions without overleveraging. This strategic positioning in high-demand sectors like water treatment and energy transition makes Stantec a compelling long-term investment, particularly for those with a multi-year horizon.