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Here's Why You Should Retain ABM Stock in Your Portfolio for Now
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Key Takeaways
ABM posted record second-quarter revenues and first-half new sales bookings, supporting growth.
ABM is expanding in data centers and semiconductors through investments and the WGNSTAR acquisition.
ABM's rising operating costs and economic uncertainties could pressure margins and future growth.
Shares of ABM Industries (ABM - Free Report) have had a decent run over the past three months. The stock has gained 12.6% against the industry's 1.5% drop. The Zacks S&P 500 composite rose 8.7% during the said time frame.
ABM has a Growth Score of B. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s third-quarter fiscal 2026 earnings are expected to increase 23.2% year over year. Earnings for fiscal 2026 and fiscal 2027 are projected to rise 15.4% and 9.3%, respectively, year over year. Revenues are expected to increase 5.3% in fiscal 2026 and 3% in fiscal 2027.
Factors That Bode Well for ABM
ABM Industries, a leading provider of integrated facility solutions globally, benefits from growing demand across its broad range of services that support infrastructure functionality and operational efficiency. The services include janitorial, energy management, facilities engineering, electrical and lighting, landscape and turf care, heating, ventilation and air conditioning (HVAC) and mechanical, mission-critical and parking solutions across various sectors.
Recently, the company reported that its second-quarter fiscal 2026 revenues increased 8.4% year over year to a record $2.3 billion. It also gained a record $1.2 billion in first-half new sales bookings, highlighting continued success in expanding its customer base across key growth markets.
ABM’s multi-year, comprehensive strategic plan, ELEVATE, launched in 2021, has also significantly boosted its overall revenues by driving client value through transparent and efficient solutions, talent optimization, expanded data utilization and digital modernization. This initiative has enabled the company to generate revenues and net income with a compounded annual growth rate (CAGR) of 7% and 5%, respectively, from fiscal 2021 to fiscal 2025.
Strategic expansion into high-demand sectors like data centers through targeted acquisitions and investments has amplified ABM’s mission-critical offerings. The company continues to accelerate investment in energy infrastructure, battery storage, data centers and artificial intelligence infrastructure due to strong demand for data centers, battery energy storage systems and HVAC projects. ABM’s Manufacturing & Distribution segment growth was also driven by semiconductor industry investments and technology-sector contract wins. The recent WGNSTAR acquisition has enhanced ABM's capabilities within semiconductor fabrication environments and contributed meaningfully to financial results.
The company has demonstrated a strong commitment to its shareholders through consistent dividend payments and share repurchases. ABM paid dividends of $57.5 million, $56.5 million and $65.6 million while repurchasing shares worth $138.1 million, $56.1 million and $122.2 million in fiscal 2023, 2024 and 2025, respectively. This consistency underscores its dedication to creating long-term value for investors.
Key Risks to Watch
ABM Industries remains exposed to broad economic risks, with trade tariffs and changing government policies threatening to increase input expenses and delay key infrastructure projects. Shifts in spending allocations and trade uncertainties may reduce contract awards but elevate operational costs, dampening profit margins and growth potential.
Rising operating costs are squeezing profit margins and limiting short-term earnings growth. ABM’s total operating costs increased by 4.2% in fiscal 2023, 4.1% in fiscal 2024 and 4.7% in fiscal 2025. The company reported that its operating expenses rose 9.3% year over year during the second quarter of 2026.
Corpay also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 14.3%. CPAY's earnings beat estimates in three of the last four reported quarters and matched once, with the surprise being 2%, on average.
View the Zacks #1 Rank List
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Here's Why You Should Retain ABM Stock in Your Portfolio for Now
Key Takeaways
Shares of ABM Industries (ABM - Free Report) have had a decent run over the past three months. The stock has gained 12.6% against the industry's 1.5% drop. The Zacks S&P 500 composite rose 8.7% during the said time frame.
ABM has a Growth Score of B. This style score condenses key financial metrics to reflect a fair sense of the quality and sustainability of its growth.
The company’s third-quarter fiscal 2026 earnings are expected to increase 23.2% year over year. Earnings for fiscal 2026 and fiscal 2027 are projected to rise 15.4% and 9.3%, respectively, year over year. Revenues are expected to increase 5.3% in fiscal 2026 and 3% in fiscal 2027.
Factors That Bode Well for ABM
ABM Industries, a leading provider of integrated facility solutions globally, benefits from growing demand across its broad range of services that support infrastructure functionality and operational efficiency. The services include janitorial, energy management, facilities engineering, electrical and lighting, landscape and turf care, heating, ventilation and air conditioning (HVAC) and mechanical, mission-critical and parking solutions across various sectors.
Recently, the company reported that its second-quarter fiscal 2026 revenues increased 8.4% year over year to a record $2.3 billion. It also gained a record $1.2 billion in first-half new sales bookings, highlighting continued success in expanding its customer base across key growth markets.
ABM’s multi-year, comprehensive strategic plan, ELEVATE, launched in 2021, has also significantly boosted its overall revenues by driving client value through transparent and efficient solutions, talent optimization, expanded data utilization and digital modernization. This initiative has enabled the company to generate revenues and net income with a compounded annual growth rate (CAGR) of 7% and 5%, respectively, from fiscal 2021 to fiscal 2025.
ABM Industries Revenues (TTM)
ABM Industries Incorporated revenue-ttm | ABM Industries Incorporated Quote
Strategic expansion into high-demand sectors like data centers through targeted acquisitions and investments has amplified ABM’s mission-critical offerings. The company continues to accelerate investment in energy infrastructure, battery storage, data centers and artificial intelligence infrastructure due to strong demand for data centers, battery energy storage systems and HVAC projects. ABM’s Manufacturing & Distribution segment growth was also driven by semiconductor industry investments and technology-sector contract wins. The recent WGNSTAR acquisition has enhanced ABM's capabilities within semiconductor fabrication environments and contributed meaningfully to financial results.
The company has demonstrated a strong commitment to its shareholders through consistent dividend payments and share repurchases. ABM paid dividends of $57.5 million, $56.5 million and $65.6 million while repurchasing shares worth $138.1 million, $56.1 million and $122.2 million in fiscal 2023, 2024 and 2025, respectively. This consistency underscores its dedication to creating long-term value for investors.
Key Risks to Watch
ABM Industries remains exposed to broad economic risks, with trade tariffs and changing government policies threatening to increase input expenses and delay key infrastructure projects. Shifts in spending allocations and trade uncertainties may reduce contract awards but elevate operational costs, dampening profit margins and growth potential.
Rising operating costs are squeezing profit margins and limiting short-term earnings growth. ABM’s total operating costs increased by 4.2% in fiscal 2023, 4.1% in fiscal 2024 and 4.7% in fiscal 2025. The company reported that its operating expenses rose 9.3% year over year during the second quarter of 2026.
ABM currently carries a Zacks Rank #3 (Hold).
Stocks to Consider
A couple of better-ranked stocks in the broader Zacks Business Services sector are Veralto Corporation (VLTO - Free Report) and Corpay, Inc. (CPAY - Free Report) .
Veralto carries a Zacks Rank #2 (Buy) at present. It has a long-term earnings growth expectation of 8.4%. VLTO delivered a trailing four-quarter earnings surprise of 4.9%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Corpay also holds a Zacks Rank of 2 at present. It has a long-term earnings growth expectation of 14.3%. CPAY's earnings beat estimates in three of the last four reported quarters and matched once, with the surprise being 2%, on average.