AECOM (ACM) Valuation Check After New 10-Year FAA Infrastructure Contract Win

AECOM (ACM) just landed a fresh 10 year IDIQ contract from the Federal Aviation Administration, giving it a long runway of potential task orders tied to critical air traffic infrastructure upgrades.

See our latest analysis for AECOM.

The contract drops at a time when AECOM’s share price has slid to about $98.85, with a sharp 1 month share price return of minus 25.52 percent, but a resilient 5 year total shareholder return of 114.46 percent suggesting longer term momentum is still intact.

If this FAA win has you thinking more broadly about infrastructure and defense exposure, it is worth exploring aerospace and defense stocks as potential companions to AECOM in your watchlist.

With shares now more than 45 percent below the Street’s average target but still boasting strong multi year returns, is AECOM quietly undervalued after this FAA win, or is the market already pricing in that future growth?

Most Popular Narrative Narrative: 31% Undervalued

With AECOM last closing at $98.85, the most followed narrative pegs fair value meaningfully higher at about $143, framing that FAA win in a much richer context.

Strategic, ongoing investment in digital solutions and AI is already showing positive margin impact and is projected to materially enhance operational efficiency, boost utilization, and further support earnings growth in the next 2 to 3 years.

Read the complete narrative.

Curious how steady revenue assumptions, firmer margins and a punchy future earnings multiple combine into that valuation gap? The full narrative lays out the playbook in detail.

Result: Fair Value of $143.33 (UNDERVALUED)

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

However, AECOM’s heavy reliance on government infrastructure budgets, along with rising wage and compliance costs, could easily pressure margins and blunt that upside narrative.

Find out about the key risks to this AECOM narrative.

Another Angle on Valuation

Our DCF model tells a colder story, putting AECOM’s fair value closer to $83.62. This makes today’s $98.85 price look overvalued rather than discounted. If cash flows are worth less than the narrative implies, is the recent share price slide really a buying window or an early warning?

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

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out AECOM for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 903 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own AECOM Narrative

If you see the story differently or want to dig into the numbers yourself, you can build a personalized view in just minutes: Do it your way.

A good starting point is our analysis highlighting 5 key rewards investors are optimistic about regarding AECOM.

Looking for more investment ideas?

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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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