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1. Company Snapshot

1.a. Company Description

ABM Industries Incorporated provides integrated facility solutions in the United States and internationally.The company operates through Business & Industry, Technology & Manufacturing, Education, Aviation, and Technical Solutions segments.It provides janitorial, facilities engineering, parking, custodial, landscaping and ground, and mechanical and electrical services; and vehicle maintenance and other services to rental car providers.


The company was incorporated in 1985 and is based in New York, New York.

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1.b. Last Insights on ABM

ABM Industries' recent performance was negatively driven by rising costs, including ERP expenses, higher SG&A, and interest expenses, which weighed on profitability. Despite modest top-line growth, margins remained thin, pushing net income and EPS lower. Additionally, the company's office market exposure and weak cash flow due to ERP rollout and working capital needs also contributed to the negative drivers.

1.c. Company Highlights

2. ABM Industries' Q3 2025 Earnings: Strong Revenue Growth Amidst Margin Pressures

ABM Industries Incorporated reported a robust third quarter 2025, with revenues reaching $2.2 billion, a 6.2% year-over-year increase, driven by 5% organic revenue growth. The company's EPS came in at $0.82, missing estimates of $0.95. Despite the revenue growth, the company faced margin pressures, partly due to strategic pricing decisions and a higher-than-usual volume of contract renegotiations with major clients. Free cash flow stood at $150 million, a significant increase year over year, thanks to disciplined cash collection efforts.

Publication Date: Sep -05

📋 Highlights
  • Organic Revenue Growth:: Achieved 5% growth, reaching $2.2 billion in Q3 2025.
  • Free Cash Flow:: Generated $150 million, a notable increase YoY from disciplined cash collection.
  • New Business Secured:: Secured $1.5 billion year-to-date, up 15% from previous periods.
  • Restructuring Savings:: Launched a program targeting $35 million in annualized cost reductions.
  • Guidance Adjustment:: Lowered full-year adjusted EPS to $3.65–$3.80 and EBITDA margin to 6.3–6.5% due to strategic pricing and higher interest costs.

Segment Performance

All segments contributed to the revenue growth, with Aviation, Manufacturing & Distribution (M&D), and Technical Solutions leading the way. The M&D segment saw strong growth, particularly in semiconductor and pharma. However, some geographic areas experienced pressure, leading to client renegotiations and margin adjustments. The Technical Solutions segment is expected to drive improvement in the fourth quarter, particularly in microgrids, data centers, and power services.

Guidance and Outlook

ABM lowered its full-year adjusted EPS guidance to the range of $3.65 to $3.80 and adjusted EBITDA margin guidance to 6.3% to 6.5%. The company expects a significant sequential improvement in both EPS and margin in the fourth quarter, driven by cost-saving measures and strong performance in the Technical Solutions segment. ABM is confident in its long-term growth prospects and expects to provide its 2026 annual guidance during the Q4 earnings call.

Valuation and Growth Prospects

With a P/E Ratio of 26.0 and an EV/EBITDA of 6.48, the market is pricing in a certain level of growth for ABM. The company's focus on artificial intelligence solutions is expected to drive both cost savings and revenue growth in the coming years. Analysts estimate next year's revenue growth at 2.5%. ABM's strong bookings, with over $1.5 billion in new business secured year-to-date, position it well for continued growth.

Share Repurchase and Dividend

ABM repurchased 1.5 million shares for $71.3 million and recently received board approval for a $150 million increase in its share authorization. The company's Dividend Yield stands at 2.12%, providing a relatively stable return to shareholders amidst the margin pressures and growth investments.

3. NewsRoom

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ABM: Strong Orders, End-Markets Recovery, Margin Improvement, And Potential For Re-Rating

Dec -04

Source: seekingalpha.com

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ABM to Announce Fourth Quarter and Full Year 2025 Financial Results

Dec -03

Source: globenewswire.com

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Creative Planning Decreases Stock Position in ABM Industries Incorporated $ABM

Nov -29

Source: defenseworld.net

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Aristides Capital LLC Invests $221,000 in ABM Industries Incorporated $ABM

Nov -28

Source: defenseworld.net

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Campbell & CO Investment Adviser LLC Makes New Investment in ABM Industries Incorporated $ABM

Nov -18

Source: defenseworld.net

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Buy 3 Ideal Dividend Kings Of 24 'Safer' In November's 56

Nov -10

Source: seekingalpha.com

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ABM Industries: A Boring Business With An Upside The Market Is Missing

Nov -07

Source: seekingalpha.com

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Propelled by Proprietary Intent Data, Informa TechTarget Continues Account-Based Marketing (ABM) Leadership

Nov -06

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.56%)

6. Segments

Business & Industry

Expected Growth: 8.37%

ABM Industries Incorporated's 8.37% growth is driven by increasing demand for facilities management services, expansion into new markets, and strategic acquisitions. The company's diversified portfolio of services, including janitorial, parking, and landscaping, has enabled it to capitalize on growth opportunities in various industries, such as healthcare, education, and commercial real estate.

Manufacturing & Distribution

Expected Growth: 4.77%

ABM Industries' Manufacturing & Distribution segment growth of 4.77% is driven by increasing demand for outsourced facility services, strategic acquisitions, and expansion into high-growth markets. Additionally, the company's focus on technology-enabled services, such as IoT-based facility management, and its commitment to sustainability and energy efficiency also contribute to its growth.

Aviation

Expected Growth: 9.72%

The 9.72% growth in Aviation segment of ABM Industries Incorporated is driven by increasing air travel demand, expansion of airport infrastructure, and rising need for efficient facility management services. Additionally, the company's focus on sustainability and energy-efficient solutions, as well as its strategic acquisitions, contribute to the segment's growth.

Education

Expected Growth: 8.5%

ABM Industries Incorporated's 8.5% growth in Education segment is driven by increasing demand for facilities management services, expansion of existing contracts, and strategic acquisitions. Additionally, the company's focus on sustainability and energy-efficient solutions resonates with educational institutions, leading to new business opportunities and revenue growth.

Technical Solutions

Expected Growth: 4.83%

ABM Industries' Technical Solutions segment growth is driven by increasing demand for energy-efficient and sustainable solutions, expansion into new markets, and strategic acquisitions. Additionally, the company's focus on innovation, technology, and customer service has enabled it to capitalize on the growing trend of outsourcing facilities management services.

7. Detailed Products

Facilities Services

ABM Industries provides facilities services including janitorial, landscaping, and parking services to commercial, industrial, and institutional clients.

Aerospace & Defense Services

ABM provides specialized services to the aerospace and defense industries, including aircraft cleaning, maintenance, and support services.

Energy Solutions

ABM offers energy-efficient solutions, including energy audits, retrofits, and sustainability services to help clients reduce energy consumption and costs.

Technical Services

ABM provides technical services, including HVAC, electrical, and plumbing maintenance and repair services to commercial and industrial clients.

Aviation Services

ABM offers aviation services, including aircraft cleaning, catering, and ground handling services to airlines and airports.

8. ABM Industries Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

ABM Industries Incorporated operates in a industry with moderate threat of substitutes. The company's services are specialized, but there are alternative solutions available to customers.

Bargaining Power Of Customers

ABM Industries Incorporated has a diverse customer base, which reduces the bargaining power of individual customers. The company's services are also essential to its customers, making it difficult for them to switch to alternative providers.

Bargaining Power Of Suppliers

ABM Industries Incorporated has a moderate bargaining power of suppliers. The company relies on a network of suppliers for equipment, materials, and services, but it also has some flexibility to switch suppliers if necessary.

Threat Of New Entrants

ABM Industries Incorporated operates in an industry with high barriers to entry, making it difficult for new entrants to join the market. The company's established brand and customer relationships also make it challenging for new entrants to gain traction.

Intensity Of Rivalry

ABM Industries Incorporated operates in a highly competitive industry with many established players. The company must continually innovate and improve its services to maintain its market share and competitiveness.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 44.49%
Debt Cost 7.51%
Equity Weight 55.51%
Equity Cost 9.71%
WACC 8.73%
Leverage 80.15%

11. Quality Control: ABM Industries Incorporated passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Mueller Industries

A-Score: 6.3/10

Value: 4.5

Growth: 7.1

Quality: 7.9

Yield: 2.0

Momentum: 8.5

Volatility: 8.0

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Worthington Industries

A-Score: 5.0/10

Value: 3.6

Growth: 3.1

Quality: 5.7

Yield: 3.0

Momentum: 8.5

Volatility: 6.0

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ABM Industries

A-Score: 4.9/10

Value: 5.6

Growth: 4.1

Quality: 5.2

Yield: 4.0

Momentum: 2.5

Volatility: 8.0

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Aramark

A-Score: 4.6/10

Value: 4.3

Growth: 4.3

Quality: 3.4

Yield: 2.0

Momentum: 5.0

Volatility: 8.7

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UniFirst

A-Score: 4.6/10

Value: 5.8

Growth: 4.6

Quality: 6.2

Yield: 1.0

Momentum: 3.0

Volatility: 7.0

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CBIZ

A-Score: 3.6/10

Value: 3.2

Growth: 5.2

Quality: 5.3

Yield: 0.0

Momentum: 2.5

Volatility: 5.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

44.63$

Current Price

44.63$

Potential

-0.00%

Expected Cash-Flows