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Tetra Tech Stock Up 34.1% in 3 Months: What's Driving it?

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Tetra Tech, Inc.’s (TTEK - Free Report) price performance has been impressive in the past three months, which is evident from a 34.1% increase in its share price. Strong backlog level, solid demand for its services and rewards to shareholders boosted market sentiments for the company.  

The Pasadena, CA-based company, with $5.4 billion of market capitalization, belongs to the Zacks Pollution Control industry. It currently carries a Zacks Rank #2 (Buy).



In the past three months, Tetra Tech has outperformed its industry’s growth of 19.5% and the S&P 500’s increase of 8.3%.

Factors Favoring the Stock

The company has been benefiting from its strong backlog level, which was $3.07 billion at the end of the third quarter of fiscal 2020 (ended June 2020). Notably, Tetra Tech has been gaining from higher federal government spending, and solid demand for its services related to water supply, wastewater treatment, flood control and environmental restoration. In addition, the company is likely to benefit from strength across its renewable energy end market.  

Also, acquisitions made by Tetra Tech are likely to prove beneficial for it. For instance, the company’s buyout of Segue Technologies (February 2020) has been strengthening its business associated with government clients, especially the U.S. Department of Defense and commercial customers. Moreover, its acquisition of BlueWater Federal Solutions, Inc. (September 2020) is likely to enhance its capabilities in cybersecurity solutions, artificial intelligence and mission-critical services for its federal clients.

Moreover, it remains committed to rewarding shareholders handsomely through share buybacks and dividend payments. Notably, during the first three quarters of fiscal 2020, Tetra Tech paid out dividends worth $25.6 million and repurchased common stock worth $102.2 million. The quarterly dividend rate was hiked 13% in April 2020.

Further, analysts have become increasingly bullish about the company over the past couple of months. Its earnings estimates for fiscal 2020 (ended September 2020) and fiscal 2021 (ending September 2021) have been increased by 0.6% and 1.5%, respectively.

Other Stocks to Consider

Some other top-ranked stocks from the Zacks Industrial Products sector are II-VI Incorporated (IIVI - Free Report) , NortonLifeLock Inc. (NLOK - Free Report) and Graphic Packaging Holding Company (GPK - Free Report) . While II-VI and NortonLifeLock currently sport a Zacks Rank #1 (Strong Buy), Graphic Packaging carries a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

II-VI delivered a positive earnings surprise of 64.90%, on average, in the trailing four quarters.

NortonLifeLock delivered a positive earnings surprise of 59.96%, on average, in the trailing four quarters.

Graphic Packaging delivered a positive earnings surprise of 16.53%, on average, in the trailing four quarters.

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