revenue growth
8.5–11.5 pct
FY 2026
official guidance
STANTEC INC
Last · NYSE$73.52+0.48 (+0.66%)stale · yahoo · 106h ago
Market cap$8.26B112.4M sh
P/E · TTM23.0fwd 14.7 · eps 3.20
Beta0.72vs S&P 500
Div yield0.96%annual · TTM
52w range
$66.26$114.52
Volume223.5Ksession
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OpenFilings analyst
Our analyst
Agentic read of the latest earnings call — recommendation updates when we process a new transcript. Research synthesis, not investment advice.
BuyHoldSell
Stantec delivered a strong Q2, but the stock’s upside depends on management converting a timing-delayed U.S.
recovery into H2 growth. Net revenue rose 11.5% to C$1,780.6 million, adjusted EBITDA increased 17.1% with margin up 90 bps to a record 18.7%, adjusted EPS rose 18.4% to C$1.61, and backlog reached C$9.2 billion. The bull case is broad international and water demand plus Page-driven growth; the tension is that U.S. organic growth was flat in Q2 and H2 guidance relies on delayed projects ramping as expected, while cash conversion remains soft.
Themes
- Q2 2026 Results
- Us Growth Recovery
- Page Acquisition
- Water Infrastructure
- Global Growth
- Amp8
Near term
U.S. organic growth must accelerate from Q2’s flat result toward the company’s mid-single-digit full-year target; management cited delayed project starts, but analysts repeatedly pressed for evidence that the recovery is timing rather than demand-related.
Page will shift from acquisition growth to reported organic growth in Q3 and Q4, mechanically supporting reported organic growth, although management did not quantify Page’s standalone growth.
Margin expansion should moderate in H2 as Stantec increases hiring and workforce capacity to support expected growth; management nevertheless raised 2026 adjusted EBITDA margin guidance to 17.8%-18.3%.
Back-half free cash flow and working-capital normalization matter: YTD operating cash flow was only C$116.3 million and DSO rose to 75 days, near the high end of the internal range.
The proposed increase in the NCIB from a 2% to 5% repurchase limit provides valuation support, but management prioritizes M&A and has not committed to a larger buyback or substantial issuer bid.
Longer term
Record backlog of C$9.2 billion, approximately 13 months of work and up 7% organically, supports multi-year revenue visibility, although conversion depends on staffing and project mobilization.
Global is the strongest structural growth engine: U.K. organic growth was approximately 15% under AMP8, Germany was in the low-20% range, and Latin America exceeded 50% on copper and energy-transition work.
Water remains a differentiated growth vertical, with 13.0% year-to-date organic growth and strong wastewater and biosolids demand across Canada, the U.K., Australia and New Zealand.
The fragmented engineering and consulting market supports continued consolidation, but management acknowledged a valuation gap between private targets and public-company trading multiples; disciplined deal selection is essential for value creation.
The Meta Alberta data-center award, advanced manufacturing demand, energy infrastructure and expected Canadian defense and nation-building spending expand the long-term opportunity set, with some Canadian programs expected to contribute more fully from 2027 onward.
Stantec is expanding its global delivery and hiring footprint, including reaching approximately 2,000 India-based employees ahead of schedule, which should improve scalability but raises execution and utilization requirements.
Red flags
The central H2 thesis remains only partly validated: Q2 U.S. organic growth was flat, and management’s explanation of timing delays was not supported by quantified project-level revenue or start-date data.
The apparent organic-growth acceleration will be helped by Page’s reporting reclassification, making underlying demand harder to assess without standalone Page growth disclosure.
Framework-agreement opportunity is larger than reported backlog because only assigned change orders enter backlog; this improves potential upside but makes the C$9.2 billion backlog less representative of total contracted opportunity.
Operating cash flow and working capital warrant scrutiny following the Page integration. Management described the issue as seasonal and temporary, but DSO at 75 days and increased staffing could delay cash conversion.
CEO succession occurs October 1, 2026. Gord Johnston remains Vice Chair, but investors still need evidence that Susan Reisbord can maintain the company’s execution, M&A discipline and margin trajectory.
Management cited strong project margins and selectivity, but declined to provide a longer-term ceiling or framework for project-margin expansion; H2 margin gains may be constrained by workforce investment.
Forward outlook
gross margin
17.8–18.3 pct
FY 2026
official guidance
OpenFilings analyst view from primary-source filings and earnings calls — not investment advice.
Recent earnings
Reported · 9:00 PM UTC+1
Period
Jun 2026
EPS
$1.61Beat+1.75%
Est. revenue
1.8B
Earnings transcripts
Documents
FormReporting forFiledFlags