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  5. ATRL: Can you please provide some thoughts on its recent softness. [AtkinsRéalis Group Inc.]
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Investment Q&A

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Q: Can you please provide some thoughts on its recent softness. Other stocks like WSP and STN have held up relatively much better, during the current market setback. Stock price is now off over 20% + from its recent high of $84 and and continues to be in a downtrend. Is present valuation expensive, compared to its peers ?

We have a 2.5% holding with an ACB of $73. Do you see potential for recovery in the stock price or should we let it go ? Please support your view with reasons to hold or sell.

Thank You
Asked by rajeev on March 07, 2025
5i Research Answer:

ATRL is down 16% year-to-date, but up 15% over the past year, and up multiples from its 2022 lows. Forward sales and earnings growth rates are expected to be strong, analyst estimates are trending higher, and margins have mostly been expanding. Free cash flow is good, and debt levels are reasonable. On a year-to-date basis, ATRL has slightly underperformed WSP and STN, but it has outperformed over the past one and three years. We might expect to see some support if its upcoming earnings are positive, and overall, we give STN and WSP the slight edge, we think ATRL looks attractive here. It trades at a slightly cheaper valuation to STN and WSP, and we like its growth prospects.