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APi Group Corporation ((APG - Free Report) ) is a business services provider specializing in life safety, security, and monitoring such as fire detection and suppression systems. The company expanded in recent years via a major acquisition and organic growth across a somewhat boring but essential area of the economy.
APi Group shares have jumped around 20% in the last 12 months to blow away its industry, while still trading at a huge discount on the valuation front. APG’s earnings revisions have rocketed higher as it benefits from its resilient offerings and its growing recurring revenue streams.
The Basics
APi Group began trading on the NYSE in the spring of 2020. The move came not too long after J2 Acquisition acquired APi Group via a SPAC in 2019. APi Group then in January 2022 completed its purchase of the Chubb fire and security business from Carrier Global ((CARR - Free Report) ).
The deal brought the UK-headquarter provider of fire safety and security services under the same roof as the New Brighton, Minnesota-based APi Group. APG now operates in over 20 countries and is one of the top providers of life safety, security, monitoring, and specialty services business. APi Group operates two business segments: Safety Services and Specialty Services.
APG’s Safety Services is focused on fire detection and suppression systems, as well as security systems for a wide range of customers. The company operates across the lifecycle of these critical offerings from design and installation to service and monitoring. APi Group’s Specialty Services segment centers around maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure.
APi Group’s offerings include turnkey solutions, with a focus on end-to-end integrated occupancy systems. APG boasts that its clients can “satisfy all” of their “OSHA requirements” with its “world-class solutions, systems and programs for risk response.”
Image Source: Zacks Investment Research
Recent Growth, Outlook & Earnings Revisions
APi Group’s 2022 sales skyrocketed 66% to $6.6 billion, driven by its key acquisitions in safety services, alongside strong organic growth. The firm’s organic revenue climbed by 12%, driven by expansion across inspection, service, and monitoring in Safety Services, alongside what it called a “general market recovery” in Safety and Specialty Services as companies around the U.S. and beyond got back to normal following covid.
APi Group closed 2022 with a 9% bigger backlog, and it is focused on disciplined project and customer selection, while also aiming to greatly boost its “acyclical, recurring service revenue.” And it was able to improve its gross margin by over 2% to 26.1% in 2022.
APi Groups’ consensus fiscal 2023 EPS outlook popped over 7% since it posted solid Q4 results, with FY24 up 29% even as Wall Street worries about slowing economic growth. APG’s upward earnings revisions help it land a Zacks Rank #1 (Strong Buy) right now.
Despite the rough-to-compete against period, Zacks estimates call for APi Group’s sales to climb another 5% in 2023 and 3% higher in FY24 to reach $7.1 billion. Meanwhile, its adjusted earnings are expected to jump 12% and 19%, respectively to eventually hit $1.78 a share next year, which would come on top of 30% bottom line expansion last year.
Image Source: Zacks Investment Research
Price Movement and Valuation
APG shares have climbed 112% in the past three years to leave the S&P 500’s 44% and its industry’s 42% run in the dust. APi Group shares, like most of the market, fell between the start of 2022 and the end of the third quarter of last year.
APG stock is now up 37% in the past six months vs. its industry’s 2% drop and the S&P 500’s 8% climb. This run includes a 17% jump in 2023.
At around $22 per share, APi Group stock trades 10% below its early March peaks and 14% underneath its average Zacks price target. And APG is currently floating right around its 50-day moving average, having experienced a bullish golden cross (short-term moving average crosses back above the longer-term) back in December.
Alongside its under $25 per share price target, APG trades at a 20% discount to its highly-ranked industry and 25% vs. the S&P 500 despite easily outperforming both since it began trading on the NYSE. APi Group is trading just above its historic median at 14X forward 12-month earnings and at a 25% discount to its own highs.
Image Source: Zacks Investment Research
Bottom Line
APG is part of the Zacks Business Services industry that ranks in the top 16% of over 250 Zacks industries, and it grabs “B” grades for both Value and Growth in our Style Scores system. APi Group’s balance sheet is sturdy and it is worth stressing that companies can ill afford to cut back on many of APG’s core products and services.
APG’s pitch to investors remains straightforward heading into its Q1 earnings release on Thursday, May 4. APi Group is actively expanding its reach across critical, hard-to-cut-back-on areas of the economy. APG's valuation and price performance seemingly speak for themselves, while its $22 per share price might make it even more attractive to some.
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Bull of the Day: APi Group Corporation (APG)
APi Group Corporation ((APG - Free Report) ) is a business services provider specializing in life safety, security, and monitoring such as fire detection and suppression systems. The company expanded in recent years via a major acquisition and organic growth across a somewhat boring but essential area of the economy.
APi Group shares have jumped around 20% in the last 12 months to blow away its industry, while still trading at a huge discount on the valuation front. APG’s earnings revisions have rocketed higher as it benefits from its resilient offerings and its growing recurring revenue streams.
The Basics
APi Group began trading on the NYSE in the spring of 2020. The move came not too long after J2 Acquisition acquired APi Group via a SPAC in 2019. APi Group then in January 2022 completed its purchase of the Chubb fire and security business from Carrier Global ((CARR - Free Report) ).
The deal brought the UK-headquarter provider of fire safety and security services under the same roof as the New Brighton, Minnesota-based APi Group. APG now operates in over 20 countries and is one of the top providers of life safety, security, monitoring, and specialty services business. APi Group operates two business segments: Safety Services and Specialty Services.
APG’s Safety Services is focused on fire detection and suppression systems, as well as security systems for a wide range of customers. The company operates across the lifecycle of these critical offerings from design and installation to service and monitoring. APi Group’s Specialty Services segment centers around maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure.
APi Group’s offerings include turnkey solutions, with a focus on end-to-end integrated occupancy systems. APG boasts that its clients can “satisfy all” of their “OSHA requirements” with its “world-class solutions, systems and programs for risk response.”
Image Source: Zacks Investment Research
Recent Growth, Outlook & Earnings Revisions
APi Group’s 2022 sales skyrocketed 66% to $6.6 billion, driven by its key acquisitions in safety services, alongside strong organic growth. The firm’s organic revenue climbed by 12%, driven by expansion across inspection, service, and monitoring in Safety Services, alongside what it called a “general market recovery” in Safety and Specialty Services as companies around the U.S. and beyond got back to normal following covid.
APi Group closed 2022 with a 9% bigger backlog, and it is focused on disciplined project and customer selection, while also aiming to greatly boost its “acyclical, recurring service revenue.” And it was able to improve its gross margin by over 2% to 26.1% in 2022.
APi Groups’ consensus fiscal 2023 EPS outlook popped over 7% since it posted solid Q4 results, with FY24 up 29% even as Wall Street worries about slowing economic growth. APG’s upward earnings revisions help it land a Zacks Rank #1 (Strong Buy) right now.
Despite the rough-to-compete against period, Zacks estimates call for APi Group’s sales to climb another 5% in 2023 and 3% higher in FY24 to reach $7.1 billion. Meanwhile, its adjusted earnings are expected to jump 12% and 19%, respectively to eventually hit $1.78 a share next year, which would come on top of 30% bottom line expansion last year.
Image Source: Zacks Investment Research
Price Movement and Valuation
APG shares have climbed 112% in the past three years to leave the S&P 500’s 44% and its industry’s 42% run in the dust. APi Group shares, like most of the market, fell between the start of 2022 and the end of the third quarter of last year.
APG stock is now up 37% in the past six months vs. its industry’s 2% drop and the S&P 500’s 8% climb. This run includes a 17% jump in 2023.
At around $22 per share, APi Group stock trades 10% below its early March peaks and 14% underneath its average Zacks price target. And APG is currently floating right around its 50-day moving average, having experienced a bullish golden cross (short-term moving average crosses back above the longer-term) back in December.
Alongside its under $25 per share price target, APG trades at a 20% discount to its highly-ranked industry and 25% vs. the S&P 500 despite easily outperforming both since it began trading on the NYSE. APi Group is trading just above its historic median at 14X forward 12-month earnings and at a 25% discount to its own highs.
Image Source: Zacks Investment Research
Bottom Line
APG is part of the Zacks Business Services industry that ranks in the top 16% of over 250 Zacks industries, and it grabs “B” grades for both Value and Growth in our Style Scores system. APi Group’s balance sheet is sturdy and it is worth stressing that companies can ill afford to cut back on many of APG’s core products and services.
APG’s pitch to investors remains straightforward heading into its Q1 earnings release on Thursday, May 4. APi Group is actively expanding its reach across critical, hard-to-cut-back-on areas of the economy. APG's valuation and price performance seemingly speak for themselves, while its $22 per share price might make it even more attractive to some.