A month has gone by since the last earnings report for ABM Industries (ABM Quick QuoteABM - Free Report) . Shares have lost about 2% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is ABM Industries due for a breakout? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important catalysts.

ABM Industries Beats Q3 Earnings Estimates

ABM reported better-than-expected third-quarter fiscal 2026 results.

ABM posted adjusted earnings of $1.04 per share, which increased 27% year over year and surpassed the Zacks Consensus Estimate of $1.01 by 3%. Higher segment operating profit, lower tax expense and reduced ongoing corporate costs supported the bottom line.

Revenues rose 4.2% to $2.32 billion and beat the consensus mark of $2.30 billion by 0.7%. Growth was led by M&D and Aviation. Semiconductor, microgrid and data center-related revenues reached nearly $775 million through nine months, rising 26% organically.

ABM Revenue Growth Led by M&D and Aviation

M&D revenues climbed 17.6% year over year to $481 million, including 7.8% organic growth and 9.9% growth from acquisitions. The increase reflected client expansions and the WGNSTAR acquisition. Aviation revenues rose 12.5% to $328.1 million, supported by healthy travel demand and the continued ramp of the Heathrow Airport contract.

Business & Industry revenues declined 2.6% to $1.01 billion, reflecting the exit of a large U.K.-based client and West Coast softness. Education revenues were nearly flat, up 0.3% to $235.8 million.

ABM Industries Manages Technical Solutions Project Timing

Technical Solutions revenues increased 4.2% to $259.9 million, with organic growth of 2.1% and acquisitions adding another 2.1%. Strong HVAC and battery energy storage system activity was partly offset by microgrid project delays tied to an important client.

The segment generated operating profit of $21.5 million, up 10.8%, while margin improved to 8.3% from 7.8% on favorable service mix. Management said about $15 million of projects were deferred in the quarter, with nearly all expected to land in the fourth quarter and a small portion in the first quarter of fiscal 2027.

ABM Expands High-Growth Technology Exposure

Semiconductor revenues reached about $300 million through the first nine months of fiscal 2026 and grew 65% organically. Microgrid revenues were about $300 million, up 17% organically, while data center revenues totaled roughly $175 million and advanced 8% organically. Together, these markets represented more than 11% of company revenues and carried double-digit blended operating margins.

Management said WGNSTAR is tracking well above its earlier $120-$130 million annualized revenue expectation. ABM reported two or three cross-sells across the combined semiconductor client base. The data center pipeline is also a multiple of its year-ago level, while a roughly $20 million Army Corps of Engineers microgrid project is expected to be executed in 2027.

ABM Industries Shows Better Margin Execution

On a GAAP basis, net income increased 18.9% to $49.7 million, or 84 cents per share, from $41.8 million, or 67 cents. Selling, general and administrative expenses declined 3.5% to $171.3 million. Adjusted EBITDA increased 11% to $139.6 million.

Segment operating margin was 7.7%, flat year over year but up 40 basis points sequentially. Business & Industry margin expanded to 7.4% from 7.1% and Education margin improved to 9.7% from 9%.

Aviation margin fell to 5.6% from 6.8% as airline customers sought cost relief amid higher jet fuel costs. M&D margin declined to 8.4% from 8.9%, reflecting growth investments and nearly $4 million of incremental WGNSTAR amortization. Excluding that amortization, the segment margin was 9.2%.

ABM Strengthens Cash Flow and Leverage

Third-quarter operating cash flow was $146.8 million and free cash flow was $128.4 million. Through nine months, operating cash flow increased to $275 million from $101 million, while free cash flow rose to $199.6 million from $42.4 million, supported by working-capital management and ERP stabilization.

Total indebtedness ended the quarter at $1.8 billion, while leverage improved to 2.9X from 3.2X in the previous quarter. Available liquidity was $605.8 million, including $110.5 million of cash and equivalents. ABM also established a $300 million accounts receivable financing facility.

ABM Industries Raises Fiscal 2026 Outlook

ABM raised its adjusted earnings outlook to $3.95-$4.10 per share from $3.85-$4.15, increasing the midpoint.

Organic revenue growth is still expected toward the high end of 3-4%, with total revenue growth toward the high end of 4-5%. Segment operating margin is now projected to be in the band of 7.7-7.8% compared with the prior 7.8-8% range.

The company lifted its full-year operating cash flow expectation to about $300 million and free cash flow to about $210 million, up $25 million from the prior free cash flow outlook. Interest expense is still expected to be $110 million and the normalized tax rate remains at 29-30%.

How Have Estimates Been Moving Since Then?

Since the earnings release, investors have witnessed a flat trend in fresh estimates.

VGM Scores

At this time, ABM Industries has a nice Growth Score of B, though it is lagging a bit on the Momentum Score front with a C. However, the stock has a score of A on the value side, putting it in the top quintile for this investment strategy.

Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

ABM Industries has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.