Value
6.9/10data confidence 83%| Component | Sub-score |
|---|---|
| P/E | 5.5 |
| P/S | 9.5 |
| EV/EBITDA | 5.6 |
| Fwd P/E | 8.2 |
| PEG | 5.5 |
- ▸Forward P/E: 14.5x
- ▸PEG: 1.38
STN · Why this verdict
Why Stantec (STN) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictHOLD
Overall score5.6/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Stantec converts 151% of net income into free cash flow and earns a Piotroski F-Score of 8/9, signaling that the engineering and construction firm's accounting earnings substantially understate actual cash generation. Quality breakdown | Free cash flow conversion remains above 120% of net income for the next 4 reported quarters and the Piotroski F-Score stays at 7 or higher, confirming sustained cash quality. | →Stable |
| CounterHigh free cash flow relative to net income in engineering firms can reflect deferred maintenance capital or working capital timing benefits that reverse in periods of contract slowdown. | ||
Stantec is in a confirmed downtrend with a death cross in place, the 200-day moving average slope declining at 4.6% per month, and an RSI of 29 near capitulation territory. Momentum breakdown | Price recovers above the 200-day moving average and closes above it for at least 20 consecutive days within 6 months, confirming the downtrend has reversed. | →Stable |
| CounterDeath crosses in engineering and construction stocks with slowing growth often lead to 6 to 12 months of underperformance; the RSI near oversold territory could bounce but structural trend reversal requires a fundamental catalyst. | ||
Stantec has reported in line or above consensus EPS estimates in all 4 of the past 4 quarters with an average positive surprise of 1.5%, demonstrating predictable delivery against expectations in a services business. Earnings | The company continues to meet or beat consensus EPS in at least 3 of the next 4 quarters, sustaining the record of consistent execution. | →Stable |
| CounterThe narrow average positive surprise of 1.5% indicates the company is barely ahead of consensus rather than structurally outperforming; any contract delay or cost overrun could flip the streak to a miss. | ||
Stantec's indicated upside is approximately 0% at the current price versus resistance-based target, and the asymmetry calculation flags upside as exhausted, making the risk-reward unfavorable for new entry even with good business fundamentals. Gates warning | Analyst consensus target is revised upward to above $80, more than 12% above current price, following a positive earnings outlook or contract win announcement over the next 12 months. | →Stable |
| CounterEngineering and construction company valuations are highly sensitive to backlog growth; if new orders slow in line with government infrastructure spending uncertainty, analyst targets may be revised downward rather than upward. | ||
Stantec converts 151% of net income into free cash flow and earns a Piotroski F-Score of 8/9, signaling that the engineering and construction firm's accounting earnings substantially understate actual cash generation.
→StableQuality breakdown
- Expectation
- Free cash flow conversion remains above 120% of net income for the next 4 reported quarters and the Piotroski F-Score stays at 7 or higher, confirming sustained cash quality.
CounterHigh free cash flow relative to net income in engineering firms can reflect deferred maintenance capital or working capital timing benefits that reverse in periods of contract slowdown.
Stantec is in a confirmed downtrend with a death cross in place, the 200-day moving average slope declining at 4.6% per month, and an RSI of 29 near capitulation territory.
→StableMomentum breakdown
- Expectation
- Price recovers above the 200-day moving average and closes above it for at least 20 consecutive days within 6 months, confirming the downtrend has reversed.
CounterDeath crosses in engineering and construction stocks with slowing growth often lead to 6 to 12 months of underperformance; the RSI near oversold territory could bounce but structural trend reversal requires a fundamental catalyst.
Stantec has reported in line or above consensus EPS estimates in all 4 of the past 4 quarters with an average positive surprise of 1.5%, demonstrating predictable delivery against expectations in a services business.
→StableEarnings
- Expectation
- The company continues to meet or beat consensus EPS in at least 3 of the next 4 quarters, sustaining the record of consistent execution.
CounterThe narrow average positive surprise of 1.5% indicates the company is barely ahead of consensus rather than structurally outperforming; any contract delay or cost overrun could flip the streak to a miss.
Stantec's indicated upside is approximately 0% at the current price versus resistance-based target, and the asymmetry calculation flags upside as exhausted, making the risk-reward unfavorable for new entry even with good business fundamentals.
→StableGates warning
- Expectation
- Analyst consensus target is revised upward to above $80, more than 12% above current price, following a positive earnings outlook or contract win announcement over the next 12 months.
CounterEngineering and construction company valuations are highly sensitive to backlog growth; if new orders slow in line with government infrastructure spending uncertainty, analyst targets may be revised downward rather than upward.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Stantec converts 151% of net income into free cash flow, earns a Piotroski F-Score of 8/9, and has delivered consistent earnings inline or above consensus for 4 straight quarters, but it is in a confirmed price downtrend with a death cross and momentum below the minimum threshold, creating a quality business at the wrong technical entry point.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.1/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.1 |
| ROA | 4.4 |
| Gross margin | 6.8 |
| Op margin | 4.4 |
| Net margin | 3.7 |
| Current ratio | 5.0 |
| FCF quality | 10.0 |
| Moat | 7.0 |
| Piotroski F | 8.9 |
- ▸Excellent cash conversion: 151% FCF/NI
- ▸Strong Piotroski F-Score: 8/9
Growth
4.4/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 4.8 |
| EPS growth | 4.1 |
Momentum
5.4/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.5 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 1.0 |
| Volume | 1.7 |
- ▸Volume accumulation (rising OBV)
- ▸Below 200-MA, MA slope -5.5%/30d — confirmed downtrend
Sentiment
6.8/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 7.5 |
| erm sentiment | 5.7 |
Insider
5.0/10data confidence 50%Peer rank
3.8/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 7.1 |
| quality rank | 5.3 |
| growth rank | 2.8 |
Technical
4.7/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 5.4 |
| support resistance | 6.5 |
| 52w position | 2.3 |
Risk (lower is worse)
5.8/10data confidence 100%| Component | Sub-score |
|---|---|
| days to cover | 6.1 |
| volatility | 5.5 |
| put call | 8.0 |
| implied vol | 0.3 |
| beta | 8.7 |
| debt equity | 6.4 |
- ▸High IV: 78%
Catalyst
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 3.2 |
| dividend safety | 7.0 |
- ▸Dividend: 96.0%
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (7)
- MOMENTUM:5.4>=4.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:40d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (3)
- MOMENTUM:5.4<5.5 (soft — BUY_NOW allowed but watch)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- DEATH_CROSS:momentum=5.4>=5.0 recovering
Reward-to-Risk
0.00
Upside
+0.0%
Downside
5.6%
Sizing output
AVOID
SetupRecovery — Death cross but MACD improving, RSI 44
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.4>=4.5. Top dim: Value at 6.9; weakest: Peer rank at 3.8. No conviction either direction.
The strongest dimensions are Value at 6.9, Sentiment at 6.8, and Quality at 6.1; the weakest are Peer rank at 3.8, Growth at 4.4, and Technical at 4.7. The V9 engine cleared all gates with 3 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Strong Free Cash Flow Conversion
Trip ifFree cash flow conversion falls below 80% of net income for 2 consecutive quarters, declining more than 71 percentage points from the current 151% level.
- P2Confirmed Death Cross Downtrend
Trip ifStock price drops below $65, more than 9% below the current $71.25, with the 200-day moving average slope accelerating to more than -6% per month.
- P3Consistent Earnings Execution
Trip ifEPS surprise falls below -5% in at least 2 of the next 4 quarters, indicating the consistent execution record has ended.
- P4No Upside At Current Price
Trip ifAnalyst consensus price target is revised down below $68, more than 5% below current price, signaling the upside case has been removed by the sell side.