Value
7.5/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.5 |
| P/S | 10.0 |
| EV/EBITDA | 4.8 |
| Fwd P/E | 9.2 |
| PEG | 8.7 |
| Analyst target | 6.0 |
- ▸Forward P/E: 10.6x
- ▸PEG: 0.72
- ▸Attractively valued
ACM · Why this verdict
Why AECOM (ACM) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
AECOM is a cheap engineering and construction firm (forward P/E 10.1x) with excellent cash conversion (132% FCF/NI) and a 2.0% dividend, but revenue is down 14%, it has no moat and it sits in a downtrend after a 52% drawdown. The reward-to-risk of 1.3 is thin ahead of the November 16 earnings.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
AECOM trades at a forward P/E of 10.1x with a PEG of 0.69, which is attractively valued. Valuation breakdown | Forward P/E stays below 13x while earnings recover. | ↓Deteriorating |
| CounterThe latest quarter showed an EPS loss of $0.50 versus a $1.46 estimate, so the forward multiple may rest on earnings that do not arrive. | ||
Free cash flow is 132% of net income and the company is a dividend aristocrat with a 2.0% yield, which supports shareholder returns. Quality breakdown | FCF/NI stays above 100% and the dividend continues to grow. | →Stable |
| CounterNet margin scores only 0.9 out of 10 and there is no competitive moat, so cash conversion may reflect working-capital timing. | ||
Revenue is declining 14% and growth scores 0.0 out of 10, which limits fundamental support for the rebound. Growth breakdown | Revenue growth returns to at least 0% year over year within 12 months. | →Stable |
| CounterA large earnings miss (-134%) in August 2026 shows the decline may reflect real project problems, not just timing. | ||
AECOM beat estimates in 3 of the last 4 quarters but missed badly in August 2026 ($-0.50 versus $1.46), leaving a four-quarter average surprise of -29.5%. Earnings | The November 16 report returns to a positive surprise. | ↓Deteriorating |
| CounterA single large miss can signal an accounting charge or deteriorating project margins that repeat in later quarters. | ||
The price of $63.34 is 15.3% below the $73.01 analyst target, against 11.4% downside to the stop, a reward-to-risk of 1.3, but the price is below a falling 200-day average (-6.9% per 30 days). Targets | The price reclaims its 200-day average and moves toward $73.01. | ↓Deteriorating |
| CounterRSI of 75 in a confirmed downtrend marks an overbought bear rally, which often fades. | ||
AECOM trades at a forward P/E of 10.1x with a PEG of 0.69, which is attractively valued.
↓DeterioratingValuation breakdown
- Expectation
- Forward P/E stays below 13x while earnings recover.
CounterThe latest quarter showed an EPS loss of $0.50 versus a $1.46 estimate, so the forward multiple may rest on earnings that do not arrive.
Free cash flow is 132% of net income and the company is a dividend aristocrat with a 2.0% yield, which supports shareholder returns.
→StableQuality breakdown
- Expectation
- FCF/NI stays above 100% and the dividend continues to grow.
CounterNet margin scores only 0.9 out of 10 and there is no competitive moat, so cash conversion may reflect working-capital timing.
Revenue is declining 14% and growth scores 0.0 out of 10, which limits fundamental support for the rebound.
→StableGrowth breakdown
- Expectation
- Revenue growth returns to at least 0% year over year within 12 months.
CounterA large earnings miss (-134%) in August 2026 shows the decline may reflect real project problems, not just timing.
AECOM beat estimates in 3 of the last 4 quarters but missed badly in August 2026 ($-0.50 versus $1.46), leaving a four-quarter average surprise of -29.5%.
↓DeterioratingEarnings
- Expectation
- The November 16 report returns to a positive surprise.
CounterA single large miss can signal an accounting charge or deteriorating project margins that repeat in later quarters.
The price of $63.34 is 15.3% below the $73.01 analyst target, against 11.4% downside to the stop, a reward-to-risk of 1.3, but the price is below a falling 200-day average (-6.9% per 30 days).
↓DeterioratingTargets
- Expectation
- The price reclaims its 200-day average and moves toward $73.01.
CounterRSI of 75 in a confirmed downtrend marks an overbought bear rally, which often fades.
Per-dimension breakdown
Quality
3.4/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.5 |
| ROA | 2.5 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 0.9 |
| Current ratio | 4.2 |
| FCF quality | 9.4 |
| Moat | 3.6 |
| Piotroski F | 4.4 |
- ▸Excellent cash conversion: 132% FCF/NI
- ▸No competitive moat
Growth
0.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 0.0 |
- ▸Declining revenue: -14%
Momentum
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 1.9 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 6.0 |
| Volume | 3.9 |
- ▸Overbought bear rally (RSI 87)
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -6.8%/30d — confirmed downtrend
Sentiment
7.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 8.4 |
| Price target | 8.0 |
| erm sentiment | 5.0 |
- ▸Analyst upside: 23%
Insider
7.1/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 9.3 |
| notable moves | 7.0 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
- ▸Institutions accumulating
Peer rank
3.4/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.5 |
| quality rank | 3.9 |
| growth rank | 0.0 |
Technical
1.3/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.0 |
| 52w position | 0.2 |
| gap | 5.0 |
Risk (lower is worse)
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.0 |
| days to cover | 6.9 |
| volatility | 6.2 |
| put call | 8.7 |
| implied vol | 4.1 |
| max pain risk | 3.0 |
| beta | 7.6 |
| debt equity | 4.2 |
- ▸Above max pain $48
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
4.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 6.7 |
| earnings timing | 5.0 |
| surprise avg | 0.0 |
| dividend safety | 8.0 |
- ▸Strong earnings: 3B/1M
- ▸Earnings in 12 days
- ▸Dividend aristocrat: 1.9% yield
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCK:QUALITY_FLOORPassed (6)
- MOMENTUM:6.4>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:0.5<1.5@spot
Warning (2)
- DEATH_CROSS:momentum=6.4>=5.0 recovering
- EARNINGS_PROXIMITY:12d<=14d (soft)
Reward-to-Risk
0.47
Upside
+7.0%
Downside
15.0%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 87
EdgeCatalyst-Driven — Earnings in 12d with 3/4 beat streak
SuitabilitySpeculative — Drawdown -49% (>40% off 52w high)
Investment implication
The SELL_IF_HOLDING verdict reflects the ASYMMETRY gate's 0.5<1.5@spot outcome against Value at 7.5 and asymmetric R:R of 0.47.
The strongest dimensions are Value at 7.5, Sentiment at 7.3, and Insider at 7.1; the weakest are Growth at 0.0, Technical at 1.3, and Peer rank at 3.4. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of 0.47 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Cheap Valuation Low Peg
Trip ifForward P/E exceeds 14x from the current 10.1x.
- P2Excellent Cash Conversion Dividend
Trip ifFCF/NI falls below 80% from the current 132%.
- P3Declining Revenue Weak Growth
Trip ifRevenue decline exceeds 20% year over year from the current -14%.
- P4Earnings Record With Large Miss
Trip ifEPS surprise stays below 0% for 2 consecutive quarters.
- P5Analyst Upside In Downtrend
Trip ifPrice falls to $60.34 or below, from the current $63.34.