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Can AECOM Sustain 5%-8% Organic Growth as Backlog Hits a Record?
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Key Takeaways
AECOM's backlog rose 13% to a record $27.8B, backed by $4.2B of wins and a 1.6x book-to-burn ratio.
U.S. water and federal defense pipelines each grew about 30%, while international backlog climbed 28%.
Slower project starts and a $337M legacy charge may pressure growth and cash flow into fiscal 2027.
AECOM (ACM - Free Report) continues to reinforce its long-term growth case through record backlog and strong project wins across transportation, water, environment and facilities. In the third quarter of fiscal 2026, total backlog increased 13% year over year to a record $27.8 billion, supported by $4.2 billion of quarterly wins and a 1.6x book-to-burn ratio. Management said this stronger visibility supports its long-term target of 5%-8% organic net service revenue (NSR) growth through fiscal 2029.
The underlying demand picture remains broad. In the United States, AECOM’s water pipeline expanded 30%, while its federal defense pipeline also increased about 30%. State and local infrastructure activity remains healthy, and less than half of IIJA funding in AECOM’s core markets has been spent. The company is also seeing accelerating private-sector demand from data centers. Internationally, backlog rose 28%, while Australia posted double-digit growth and backlog increased more than 40% year over year.
Near-term execution remains the key constraint. Slower construction management project starts and weakness in Middle East hospitality and tourism weighed on fiscal 2026 NSR growth. AECOM also recorded a $337 million charge tied to a legacy construction management project, while those projects are expected to pressure cash flow through the first half of fiscal 2027.
Still, the design business is providing support, with Americas design organic growth running near 7% year to date on a workday-adjusted basis. The bigger test will be how quickly AECOM converts its record backlog into revenues, particularly in construction management, where large projects can take 12-18 months to ramp. With strong pipelines, record wins and improving multiyear visibility, the company has a solid foundation to sustain its 5%-8% organic growth algorithm as delayed projects move into execution.
Infrastructure Backlogs Highlight a Competitive Growth Landscape
AECOM’s record backlog and 5%-8% organic growth target come as peers are also benefiting from strong infrastructure and project demand. EMCOR Group, Inc. (EME - Free Report) is seeing broad-based strength across data centers, institutional, manufacturing and water-related markets. In the second quarter of 2026, EMCOR’s remaining performance obligations reached a record $17.14 billion, up 44% year over year, with 95% of the increase generated organically. EME’s Network and communications, led by data centers, remained a major driver, while bookings were also strong in water and wastewater, health care and institutional projects.
Fluor Corporation (FLR - Free Report) is another relevant rival, with exposure to large-scale infrastructure, energy, mining, nuclear and data-center-related projects. Fluor secured more than $6 billion of new awards in the second quarter of 2026, lifting backlog to nearly $27 billion. FLR’s pipeline includes about $30 billion of potential mining and metals awards over the next 18 months, while power opportunities tied to data-center growth are expected to support meaningful backlog additions in the first half of 2027.
ACM Stock’s Price Performance & Valuation Trend
Shares of this Texas-based provider of professional, technical and management solutions have lost 14.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry and the broader Construction sector, but underperforming the S&P 500 index.
ACM Three-Month Share Price Performance
Image Source: Zacks Investment Research
ACM stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 9.92, as evidenced by the chart below.
ACM Valuation
Image Source: Zacks Investment Research
Earnings Estimate Revision of ACM
ACM’s earnings estimates for fiscal 2026 and 2027 have trended downward in the past 60 days. The revised estimates for fiscal 2026 imply a year-over-year decline of 14.8%, while the same for fiscal 2027 implies growth of 33.7%.
Image Source: Zacks Investment Research
AECOM stock currently carries a Zacks Rank #5 (Strong Sell).
View the Zacks #1 Rank List
Image: Bigstock
Can AECOM Sustain 5%-8% Organic Growth as Backlog Hits a Record?
Key Takeaways
AECOM (ACM - Free Report) continues to reinforce its long-term growth case through record backlog and strong project wins across transportation, water, environment and facilities. In the third quarter of fiscal 2026, total backlog increased 13% year over year to a record $27.8 billion, supported by $4.2 billion of quarterly wins and a 1.6x book-to-burn ratio. Management said this stronger visibility supports its long-term target of 5%-8% organic net service revenue (NSR) growth through fiscal 2029.
The underlying demand picture remains broad. In the United States, AECOM’s water pipeline expanded 30%, while its federal defense pipeline also increased about 30%. State and local infrastructure activity remains healthy, and less than half of IIJA funding in AECOM’s core markets has been spent. The company is also seeing accelerating private-sector demand from data centers. Internationally, backlog rose 28%, while Australia posted double-digit growth and backlog increased more than 40% year over year.
Near-term execution remains the key constraint. Slower construction management project starts and weakness in Middle East hospitality and tourism weighed on fiscal 2026 NSR growth. AECOM also recorded a $337 million charge tied to a legacy construction management project, while those projects are expected to pressure cash flow through the first half of fiscal 2027.
Still, the design business is providing support, with Americas design organic growth running near 7% year to date on a workday-adjusted basis. The bigger test will be how quickly AECOM converts its record backlog into revenues, particularly in construction management, where large projects can take 12-18 months to ramp. With strong pipelines, record wins and improving multiyear visibility, the company has a solid foundation to sustain its 5%-8% organic growth algorithm as delayed projects move into execution.
Infrastructure Backlogs Highlight a Competitive Growth Landscape
AECOM’s record backlog and 5%-8% organic growth target come as peers are also benefiting from strong infrastructure and project demand. EMCOR Group, Inc. (EME - Free Report) is seeing broad-based strength across data centers, institutional, manufacturing and water-related markets. In the second quarter of 2026, EMCOR’s remaining performance obligations reached a record $17.14 billion, up 44% year over year, with 95% of the increase generated organically. EME’s Network and communications, led by data centers, remained a major driver, while bookings were also strong in water and wastewater, health care and institutional projects.
Fluor Corporation (FLR - Free Report) is another relevant rival, with exposure to large-scale infrastructure, energy, mining, nuclear and data-center-related projects. Fluor secured more than $6 billion of new awards in the second quarter of 2026, lifting backlog to nearly $27 billion. FLR’s pipeline includes about $30 billion of potential mining and metals awards over the next 18 months, while power opportunities tied to data-center growth are expected to support meaningful backlog additions in the first half of 2027.
ACM Stock’s Price Performance & Valuation Trend
Shares of this Texas-based provider of professional, technical and management solutions have lost 14.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry and the broader Construction sector, but underperforming the S&P 500 index.
ACM Three-Month Share Price Performance
Image Source: Zacks Investment Research
ACM stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 9.92, as evidenced by the chart below.
ACM Valuation
Image Source: Zacks Investment Research
Earnings Estimate Revision of ACM
ACM’s earnings estimates for fiscal 2026 and 2027 have trended downward in the past 60 days. The revised estimates for fiscal 2026 imply a year-over-year decline of 14.8%, while the same for fiscal 2027 implies growth of 33.7%.
Image Source: Zacks Investment Research
AECOM stock currently carries a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.