Exponent, Inc. (EXPO) | Investment Case

1. Company Snapshot

1.a. Company Description

Exponent, Inc., together with its subsidiaries, operates as a science and engineering consulting company worldwide.It operates in two segments, Engineering and Other Scientific, and Environmental and Health.The Engineering and Other Scientific segment provides services in the areas of biomechanics, biomedical engineering and sciences, buildings and structures, civil engineering, construction consulting, data sciences, electrical engineering and computer science, human factors, materials and corrosion engineering, mechanical engineering, polymer science and materials chemistry, thermal sciences, and vehicle engineering.

The Environmental and Health segment offers services in the areas of chemical regulation and food safety, ecological and biological sciences, environmental and earth sciences, and health sciences.The company offers approximately 90 technical disciplines to solve pressing and complicated challenges facing stakeholders.It serves clients in chemical, construction, consumer products, energy, food, beverage and nutrition, government, life sciences, insurance, manufacturing, technology, industrial equipment, transportation, and other sectors of the economy.

The company was formerly known as The Failure Group, Inc.and changed its name to Exponent, Inc.in 1998.

Exponent, Inc.was founded in 1967 and is headquartered in Menlo Park, California.

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1.b. Last Insights on EXPO

Negative drivers behind Exponent, Inc.'s recent performance include a lack of significant news or announcements that could have positively impacted the company's stock price. The recent earnings release, while beating estimates, did not provide any substantial surprises or catalysts for growth. Furthermore, the absence of any notable mergers and acquisitions or partnerships in the recent past has contributed to a lack of excitement around the company's stock. Additionally, the recent increase in quarterly dividend payment from $0.30 to $0.31 per share may not be enough to drive significant interest among investors.

1.c. Company Highlights

Last Price	69.5
Change Percentage	-0.94%
Open	69.13
Previous Close	70.16
Market Cap ( Millions)	3467
Volume	273510
Year High	87.88
Year Low	63.81
M A 50	72.67
M A 200	72.3

FCF Yield	3.54%
Dividend Yield	1.73%
ROE	25.51%
Debt / Equity	21.22%
Net Debt / EBIDTA	-91.29%
Price To Book	8.96
Price Earnings Ratio	32.98
Price To FCF	28.23
Price To sales	5.96
EV / EBITDA	21.86

2. Exponent's Strong Q4 2025 Earnings: A Closer Look

Exponent's Q4 2025 financial performance was robust, with total revenues increasing 8% to $147.4 million and net revenues rising 5% to $129.4 million. The company's net income for the quarter was $24.8 million, or $0.49 per diluted share, beating analyst estimates of $0.47. EBITDA for the quarter was $34.7 million, producing a margin of 26.8% of net revenues. For the full year 2025, total revenues and net revenues grew 4% to $582 million and $536.8 million, respectively.

Publication Date: Feb -09

                                    📋 Highlights
                                    Q4 Revenue Growth:
                                                Total revenues rose 8% to $147.4M, with net revenues up 5% to $129.4M YoY.
Full-Year Revenue Performance:
                                                2025 total revenues grew 4% to $582M, while net revenues reached $536.8M (4% increase).
EBITDA Margin Expansion:
                                                Q4 EBITDA hit $34.7M (26.8% of net revenues), with 2026 guidance of 27.5–28.5% margins.
2026 Growth Outlook:
                                                Net revenue expected to grow high single-digits in 2026, with 4–5% headcount increase and 75–76% utilization.
Ai-Driven Market Opportunities:
                                                AI adoption in consumer electronics and energy is fueling demand, with 40–60 headcount growth in AI-related sectors.

                                

Revenue Growth Drivers

The company's growth was driven by diversification across a broader mix of clients and an expanding range of products and technologies, particularly in consumer electronics, where Exponent saw increased demand for user research engagements. According to Catherine Corrigan, "As artificial intelligence and other advanced technologies become more deeply embedded in novel products and critical systems, clients are facing an expanding set of complex high-stakes challenges."

Outlook for 2026

Exponent expects net revenues for the first quarter and full year 2026 to grow in the high single digits as compared to the same periods in 2025. The company anticipates EBITDA margin to be 27.5% to 28.5% of net revenues in the first quarter of 2026. Analysts estimate next year's revenue growth at 8.3%, indicating a positive outlook for the company's future performance.

Valuation Metrics

Exponent's current valuation metrics, including a P/E Ratio of 38.9, P/B Ratio of 10.12, and EV/EBITDA of 25.78, suggest that the market has high expectations for the company's future growth. The company's ROE of 24.77% and ROIC of 13.95% indicate strong profitability. With a Net Debt / EBITDA ratio of -0.83, Exponent's financial position appears solid, providing a foundation for future growth.

Growth Prospects

The company's growth prospects are further supported by its increasing headcount, with an expected 4% to 5% year-over-year growth in technical full-time equivalent employees in 2026. Exponent's diversified multidisciplinary platform and proven ability to support clients across both proactive and reactive engagements position the company well to navigate emerging trends and deliver sustainable growth and long-term value for shareholders.

3. NewsRoom

Exponent, Inc. (EXPO) Q4 2025 Earnings Call Transcript

Feb -06

Source: seekingalpha.com

Exponent (EXPO) Tops Q4 Earnings and Revenue Estimates

Feb -05

Source: zacks.com

Exponent Increases Quarterly Dividend Payment from $0.30 to $0.31 per Share for Q1 2026

Feb -05

Source: globenewswire.com

Exponent Reports Fourth Quarter and Fiscal Year 2025 Financial Results

Feb -05

Source: globenewswire.com

4 Business Services Firms Poised to Beat Estimates This Earnings Season

Jan -30

Source: zacks.com

Exponent (EXPO) Reports Next Week: Wall Street Expects Earnings Growth

Jan -29

Source: zacks.com

Will Exponent (EXPO) Beat Estimates Again in Its Next Earnings Report?

Jan -28

Source: zacks.com

Exponent to Announce Fourth Quarter and Fiscal Year 2025 Results and Host Quarterly Conference Call on February 5, 2026

Jan -15

Source: globenewswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.55%)

6. Segments

Engineering and Other Scientific

Expected Growth: 3.5%

Exponent's 3.5% growth in Engineering and Other Scientific segment is driven by increasing demand for scientific and engineering consulting services, expansion in emerging markets, and strategic acquisitions. Additionally, the company's expertise in areas like product development, failure analysis, and regulatory compliance is in high demand, contributing to its growth.

Environmental and Health

Expected Growth: 3.8%

Exponent, Inc.'s 3.8% growth in Environmental and Health segment is driven by increasing demand for environmental consulting services, growth in health sciences consulting, and expansion of services in emerging markets. Additionally, the company's expertise in sustainability and climate change, as well as its strong reputation in the industry, contribute to its growth.

7. Detailed Products

Exponent Partner Solutions

A suite of products and services designed to help partners build, deploy, and manage digital experiences for their clients

Exponent DXP

A digital experience platform that enables businesses to create, manage, and optimize digital experiences across multiple channels

Exponent CMS

A content management system that enables businesses to create, manage, and deliver content across multiple channels

Exponent Commerce

An e-commerce platform that enables businesses to create, manage, and optimize online stores and marketplaces

Exponent Analytics

A data analytics platform that enables businesses to collect, analyze, and visualize data to inform business decisions

Exponent AI

An artificial intelligence platform that enables businesses to build, deploy, and manage AI models and applications

8. Exponent, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Exponent, Inc. operates in a niche market, providing data analytics and software solutions, which reduces the threat of substitutes. However, the company's reliance on cloud-based infrastructure and open-source technologies makes it vulnerable to substitutes.

Bargaining Power Of Customers

Exponent, Inc.'s customers are primarily large enterprises and government agencies, which have limited bargaining power due to the company's specialized offerings and high switching costs.

Bargaining Power Of Suppliers

Exponent, Inc. has a diversified supplier base, and its reliance on open-source technologies reduces its dependence on any single supplier, thereby limiting the bargaining power of suppliers.

Threat Of New Entrants

The data analytics and software solutions market has high barriers to entry, including significant capital expenditures and expertise requirements, which limits the threat of new entrants.

Intensity Of Rivalry

The data analytics and software solutions market is highly competitive, with several established players, including large technology companies, which increases the intensity of rivalry.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	7.35%
Debt Cost	3.95%
Equity Weight	92.65%
Equity Cost	7.17%
WACC	6.93%
Leverage	7.94%

11. Quality Control: Exponent, Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Booz Allen Hamilton

A-Score: 5.4/10

Value: 5.5

Growth: 7.7

Quality: 7.4

Yield: 5.0

Momentum: 0.5

Volatility: 6.3

1-Year Total Return ->

Exponent

A-Score: 4.7/10

Value: 1.2

Growth: 5.7

Quality: 8.2

Yield: 3.0

Momentum: 1.5

Volatility: 8.3

1-Year Total Return ->

ICF International

A-Score: 4.4/10

Value: 6.3

Growth: 6.4

Quality: 5.4

Yield: 1.0

Momentum: 0.5

Volatility: 6.7

1-Year Total Return ->

FTI Consulting

A-Score: 4.3/10

Value: 3.5

Growth: 6.4

Quality: 6.0

Yield: 0.0

Momentum: 1.5

Volatility: 8.7

1-Year Total Return ->

TransUnion

A-Score: 3.9/10

Value: 2.4

Growth: 5.9

Quality: 5.5

Yield: 0.0

Momentum: 4.5

Volatility: 5.3

1-Year Total Return ->

CBIZ

A-Score: 3.8/10

Value: 4.9

Growth: 5.2

Quality: 5.6

Yield: 0.0

Momentum: 1.0

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

4.89%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.93%

Exponent, Inc. - US30214U1025

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on EXPO

1.c. Company Highlights

Better Quality

Expensive

Weak Momentum

Earnings Beats

Revenues Beats

Stable Momentum

Average Growth

Medium Volatility

Less Volatile

Revenues Miss

2. Exponent's Strong Q4 2025 Earnings: A Closer Look

Revenue Growth Drivers

Outlook for 2026

Valuation Metrics

Growth Prospects

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.55%)

6. Segments

Engineering and Other Scientific

Expected Growth: 3.5%

Environmental and Health

Expected Growth: 3.8%

7. Detailed Products

Exponent Partner Solutions

Exponent DXP

Exponent CMS

Exponent Commerce

Exponent Analytics

Exponent AI

8. Exponent, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Exponent, Inc. passed 7 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

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

69.5$

Current Price

69.5$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA