A Look at AECOM’s Valuation Following Major Design Win for Riyadh’s Vision 2030 Project

AECOM (NYSE:ACM) just landed a joint design role alongside Jacobs for The Mukaab, a massive new development in Riyadh tied to Saudi Arabia’s Vision 2030. This project’s global profile instantly puts AECOM in the spotlight.

See our latest analysis for AECOM.

This high-profile win comes shortly after several recent milestones for AECOM, including industry events and analyst optimism. The stock has maintained impressive momentum, with a 23% share price return since the start of the year and a strong 20% total shareholder return over the past 12 months. Longer-term investors have seen positive results as the five-year total shareholder return stands at over 180%, highlighting both growth potential and resiliency.

If the buzz around global infrastructure has you looking for new opportunities, now is a great time to discover fast growing stocks with high insider ownership

But with the stock’s steady gains and upbeat analyst outlooks, investors are left wondering if AECOM is still trading at a bargain or if the market has already factored in all the future growth.

Most Popular Narrative: 6.9% Undervalued

At $130.81, AECOM trades meaningfully below the most widely followed narrative fair value of $140.50, fueling speculation around the sustainability of its current rally and what is really driving this upside.

Accelerating global and U.S. government-backed infrastructure spending, especially in transportation, water, energy, and data centers, provides multi-year revenue visibility and a record backlog that should support top-line growth and backlog-driven earnings expansion.

Read the complete narrative.

Curious how this premium price tag is justified? The answer comes from bold growth projections, margin upgrades, and aggressive future profit assumptions. The exact financial milestones and expectations are not what most would predict. See what numbers might surprise you behind that fair value.

Result: Fair Value of $140.50 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, AECOM’s heavy reliance on government funding and heightened competition from digital disruptors could challenge both its revenue stability and margin expansion in the years ahead.

Find out about the key risks to this AECOM narrative.

Another View: The SWS DCF Model Tells a Different Story

Switching perspectives, our SWS DCF model actually values AECOM at $103.29, which is well below the current share price. By emphasizing future discounted cash flows rather than market optimism, this model suggests the stock could be overvalued if growth does not meet expectations. Does this mean the market is too optimistic?

Look into how the SWS DCF model arrives at its fair value.

Build Your Own AECOM Narrative

If you would rather form your own view or dig deeper into the numbers behind AECOM, you can put together your own narrative in just a few minutes. Do it your way

A good starting point is our analysis highlighting 3 key rewards investors are optimistic about regarding AECOM.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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