ABM Industries (ABM): Reassessing Valuation After Earnings Miss, Margin Concerns and WGNSTAR Deal Fallout

ABM Industries (ABM) slid after its latest earnings update, as a headline miss on expectations and cautious commentary on margins and the WGNSTAR acquisition overshadowed decent revenue growth and a fresh dividend increase. See our latest analysis for ABM Industries. The latest pullback, including a 1 day share price return of minus 2.99% and year to date share price return of minus 17.51%, suggests sentiment has cooled despite solid earnings recovery, dividend growth and ongoing buybacks. Longer term total shareholder returns remain modestly positive. If ABM's recent moves have you reassessing your watchlist, this could be a good moment to explore fast growing stocks with high insider ownership and see what else is quietly gaining traction. With the stock down double digits this year yet trading at a sizable discount to analyst targets, investors now face a key question: Is ABM quietly undervalued, or is the market correctly pricing in slower future growth? Most Popular Narrative: 25.1% Undervalued With ABM Industries last closing at 42.17 dollars against a narrative fair value of about 56 dollars, the valuation debate is far from settled. The analysts have a consensus price target of 58.0 dollars for ABM Industries based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of 68.0 dollars, and the most bearish reporting a price target of just 54.0 dollars. Read the complete narrative. Want to see how modest revenue growth, rising margins and a sharply lower future earnings multiple can still justify a higher value than today? The full narrative unpacks the earnings ramp, buyback support and discount rate that hold this story together. Result: Fair Value of $56.33 (UNDERVALUED) Have a read of the narrative in full and understand what's behind the forecasts. However, persistent margin pressure from pricing concessions, together with a heavier tilt toward shorter term, lower margin contracts, could quickly erode the undervaluation case. Find out about the key risks to this ABM Industries narrative. Build Your Own ABM Industries Narrative If you see the story differently or simply want to dig into the numbers yourself, you can build a custom view in just minutes, Do it your way. A great starting point for your ABM Industries research is our analysis highlighting 6 key rewards and 1 important warning sign that could impact your investment decision. Looking for more investment ideas? Do not stop your research with ABM. When markets reward prepared investors, you will want a watchlist filled with high conviction ideas ready for your next move. Explore potential cash flow and stability by targeting reliable income opportunities through these 12 dividend stocks with yields > 3% with sustainable payouts and room for growth. Expand your growth potential by focusing your attention on these 900 undervalued stocks based on cash flows where strong fundamentals and mispriced cash flows could present compelling upside. Position yourself early in the next technological wave as you scan these 28 quantum computing stocks for companies advancing frontier computing breakthroughs. 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.Mobile Infrastructure for Defense and DisasterThe next wave in robotics isn't humanoid. Its fully autonomous towers delivering 5G, ISR, and radar in under 30 minutes, anywhere.Get the investor briefing before the next round of contractsSponsored On Behalf of CiTech