AECOM (ACM Quick QuoteACM - Free Report) indulged in a study with clients across the United States to respond to the final regulatory rules — announced by the Environmental Protection Agency (“EPA”) — that counts for maximum contaminant levels (MCLs) for six per- and polyfluoroalkyl substances (PFAS) in drinking water.

The EPA’s new regulations are expected to generate significant infrastructure investment across the water sector, which will ultimately benefit ACM and other industry players.

AECOM has approximately 25 years of experience in providing PFAS solutions that will help its clients in their stewardship of the nation’s clean drinking water. Being one of the world’s largest PFAS technical teams and a global leader in emerging contaminant services, ACM’s expertise addresses client needs at each step, from source identification and mitigation to water treatment and, ultimately, destruction.

The company’s industry-leading, patented PFAS destruction technology — DE-FLUORO — has been successfully employed by clients like municipal governments, utilities, airports, manufacturers, and defense agencies worldwide. The technology utilizes an innovative electrochemical oxidation process to sustainably and economically destroy PFAS mass in contaminated liquids.

Professional Services Business: A Boon

AECOM is a leading solutions provider, supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government and environmental, energy and water businesses.

AECOM has been reaping rewards from its high-yielding organic growth strategies. In the first quarter of fiscal 2024, revenues increased 15% year over year. Adjusted net service revenues (NSR) also saw an uptick of 7%. Within the design business segment, organic NSR witnessed an 8% increase from the prior year, primarily driven by robust performance in the water and transportation sectors, along with a noteworthy 9% growth in the Americas region. This was also fueled by an exceptional win rate and sustained positive trends in end markets.

Contracted backlog within the design business rose 17%, supported by solid funding across key markets. Looking ahead, AECOM boasts a favorable outlook with clear visibility of a robust backlog and promising pipelines for the forthcoming quarters. The company's strong backlog levels serve as significant indicators of future revenue growth, highlighting substantial opportunities on the horizon.

Image Source: Zacks Investment Research

Over the past month, AECOM's shares grew 4.5%, trailing slightly ahead of the Zacks Engineering - R and D Services industry’s 4.3% growth. The company's recent growth and robust backlog signal strong prospects. As of the fiscal first-quarter end, AECOM's total backlog stood at an impressive $39.81 billion, with contracted backlog growth accounting for 56.5%.

Zacks Rank & Key Picks

AECOM currently carries a Zacks Rank #3 (Hold).

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