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Why Tetra Tech (TTEK) Is an Attractive Bet for Investors Now

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Tetra Tech, Inc. (TTEK - Free Report) is well poised for growth, courtesy of strength across its businesses, accretive buyouts, undertaken projects and a sound capital-deployment strategy.

Zacks Investment Research
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Currently holding a Zacks Rank #2 (Buy), Tetra Tech has a market capitalization of $6.4 billion. In the past year, the stock has gained 2.8%, against the industry’s decline of 7.4%.

Let’s delve into the factors that make investments in TTEK a smart choice at the moment.

Business Strength: Tetra Tech benefits from its presence in diverse end markets, allowing it to offset risks associated with a single market. In the quarters ahead, strength in businesses associated with the state, commercial and international clients will likely benefit TTEK. Also, water & environment, international development, and climate change projects have been aiding the company for some time. Factors like U.S. infrastructure stimulus, U.S. administration priorities and TTEK’s global focus on climate change are anticipated to drive its performance over time. Tetra Tech predicts net revenues of $665-$715 million for third-quarter fiscal 2022 (ending June 2022).

Benefits From Acquisitions: Tetra Tech focuses on strengthening and expanding its businesses through the acquisition of assets. The Piteau Associates acquisition (March 2022) will likely boost its capabilities in advanced analytics for providing water management and geotechnical solutions to its customers. The buyout of Axiom Data Science in March 2022 is expected to strengthen TTEK’s advanced climate data analytics solutions offerings. The addition of Enterprise Automation in October 2021 added vigor to its digital technology solutions for water-sector clients. Tetra Tech’s acquisition spending totaled $33.6 million in the first six months of fiscal 2022 (ending September 2022).

Rewards to Shareholders: Tetra Tech rewards shareholders through share repurchases and dividend payouts. In the first six months of fiscal 2022, the company paid out dividends worth $21.6 million and repurchased shares worth $100 million. In May 2022, the quarterly dividend rate was hiked by 15%. Tetra Tech was left to repurchase shares worth $448 million exiting the second quarter of fiscal 2022 (ended March 2022).

Estimate Revisions: In the past 60 days, the Zacks Consensus Estimate for the company’s fiscal 2022 earnings has trended from $4.28 to $4.41 per share on two upward estimate revisions against none downward. Also, the estimates for fiscal 2023 (ending September 2023) earnings have increased from $4.63 to $4.81 on two upward estimate revisions versus none downward.

Zacks Rank & Stocks to Consider

Some other better-ranked companies from the industrial products sector are discussed below:

Applied Industrial Technologies, Inc. (AIT - Free Report) presently sports a Zacks Rank #1 (Strong Buy). AIT delivered a trailing four-quarter earnings surprise of 25.4%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here

AIT’s earnings estimates have increased 5.9% for fiscal 2022 (ending June 2022) in the past 60 days. The stock has rallied 4.8% in the past year.

RBC Bearings Incorporated (ROLL - Free Report) presently has a Zacks Rank of 1. ROLL delivered a trailing four-quarter earnings surprise of 3.4%, on average.

ROLL’s earnings estimates have increased 9.9% for fiscal 2023 (ending March 2022) in the past 60 days. Its shares have declined 10.6% in the past year.

Roper Technologies, Inc. (ROP - Free Report) presently has a Zacks Rank #2. Its earnings surprise in the last four quarters was 2%, on average.

In the past 60 days, ROP’s earnings estimates have increased 1.2% for 2022. The stock has declined 18.2% in the past year.