Tetra Tech (TTEK, Financial) has been chosen by the City of Cape Coral, Florida, to lead a significant expansion of the North Reverse Osmosis Water Treatment Plant. This project aims to enhance the facility's capacity by 50% and double the volume of its ground storage reservoir.
As part of this $60 million undertaking, Tetra Tech will deliver comprehensive engineering design and technical services. Their responsibilities include creating detailed technical plans, managing the permitting process, and overseeing testing and commissioning stages.
This expansion underscores Cape Coral's commitment to advanced water treatment solutions, ensuring the community has access to increased water resources to meet growing demands.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 5 analysts, the average target price for Tetra Tech Inc (TTEK, Financial) is $39.00 with a high estimate of $49.00 and a low estimate of $31.00. The average target implies an upside of 25.40% from the current price of $31.10. More detailed estimate data can be found on the Tetra Tech Inc (TTEK) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Tetra Tech Inc's (TTEK, Financial) average brokerage recommendation is currently 2.1, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Tetra Tech Inc (TTEK, Financial) in one year is $36.77, suggesting a upside of 18.23% from the current price of $31.1. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Tetra Tech Inc (TTEK) Summary page.
TTEK Key Business Developments
Release Date: January 30, 2025
- Net Revenue: $1.2 billion, up 18% year-over-year, a record for any quarter in the company's history.
- Operating Income: $138 million, an increase of 24% from the prior year.
- Earnings Per Share (EPS): Increased 25% to $0.35, above guidance and consensus.
- Backlog: Grew to $5.44 billion, up 15% from the first quarter of last year.
- Government Services Group (GSG) Revenue: $601 million, up 36% year-over-year.
- GSG Margin: 13.9%, with an adjusted margin of 15.4% excluding Ukraine work.
- Commercial International Group (CIG) Revenue: $596 million, up 4% year-over-year.
- CIG Margin: 13%, up 50 basis points from last year.
- Cash Flow from Operations: $363 million for the trailing 12 months.
- Days Sales Outstanding (DSO): 55.9 days, better than industry peers.
- Net Debt to EBITDA: 1.33 times, with an adjusted leverage of 1.05 times.
- Dividend: $0.058, a 12% increase year-over-year.
- Stock Buyback: $25 million worth of shares repurchased, with a significant portion of $400 million plan available.
- Second Quarter Guidance: Net revenue of $1 billion to $1.1 billion; EPS of $0.30 to $0.33.
- Fiscal Year 2025 Guidance: Net revenue of $4.365 billion to $4.765 billion; EPS of $1.37 to $1.52.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Tetra Tech Inc (TTEK, Financial) achieved record net revenue of $1.2 billion in the first quarter, marking an 18% increase from the previous year.
- Operating income rose by 24% to $138 million, setting an all-time high for the company.
- Earnings per share increased by 25% to $0.35, surpassing both company guidance and market consensus.
- The company's backlog reached a record $5.44 billion, up 15% from the previous year.
- Both the Government Services Group and Commercial International Group segments showed significant revenue growth, with GSG increasing by 36% year-over-year.
Negative Points
- The USAID contracts have been put on hold for up to 90 days due to a review by the new administration, potentially impacting future revenue.
- Some Tetra Tech staff were affected by recent fires in Pasadena, leading to evacuations and personal losses.
- The company faces a one-time charge due to a settlement related to the Hunters Point litigation, impacting first-quarter earnings.
- There is uncertainty regarding the continuation of USAID projects, which could affect revenue projections if not resumed.
- The environmental and renewable energy sectors face potential risks from policy changes under the new administration, which could impact future projects.
