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AECOM (ACM), SitScape Finalizes a Five-Year Strategic Deal

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AECOM (ACM - Free Report) recently announced that it has signed a five-year partnership agreement with SitScape, Inc. Notably, SitScape is the leader in collaborative User-Defined-Operating-Picture (UDOP) solutions, with its well recognized Digital Enterprise Enablement Platform (DEEP) software.

The partnership will see rollout of SitScape’s software in AECOM’s Management Services group, which in turn is likely to enhance the latter’s internal operations. AECOM will leverage SitScape’s award-winning, DEEP software, with integrated data analytics, machine learning, process automation and collaboration capabilities to optimize the mission-critical operations of its customers worldwide.

Our Take

AECOM is witnessing robust prospects in all of its segments. Evidently, the Construction Services and the Management Services segments continue to benefit from higher margin work in the building construction and power businesses. Also, the company’s solid backlog levels, which are a key indicator of future revenue growth, reflect significant opportunities in the forthcoming quarters. Moreover, the company’s solid level of backlog of large commercial, stadia and power projects is expected to drive revenue growth and margins going ahead.

Additionally, AECOM’s diversified portfolio comprises both designing and construction services. The company is also efficient in dealing with cyclical market volatility, which helps it capitalize on upside of its business during downturns. Notably, more than 70% of the company’s profits are generated from the infrastructure and defense markets that are likely to benefit from the favorable political climate in the United States and abroad.

 

In the past six months, this Zacks Rank #2 (Buy) company has returned 0.6% against the industry’s decline of 8%. Also, the Trump administration's focus on investing in defense and cyber security is expected to prove conducive to the company’s growth.

Other Stocks to Consider

Some other top-ranked stocks from the same space include Fluor Corporation (FLR - Free Report) , Willdan Group, Inc. (WLDN - Free Report) and Jacobs Engineering Group Inc. . While Fluor and Willdan Group sport a Zacks Rank #1 (Strong Buy), Jacobs Engineering Group carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Fluor surpassed estimates thrice in the trailing four quarters, with an average positive earnings surprise of 8.4%.

Willdan Group surpassed estimates in the preceding four quarters, with an average positive earnings surprise of 45.4%.

Jacobs Engineering Group outpaced estimates in the preceding four quarters, with an average earnings surprise of 11.4%.

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