Company Overview
Stantec Inc. is a global leader in sustainable engineering, architecture, and environmental consulting and provides integrated services to public- and private-sector clients across infrastructure, buildings, environmental services, water, and energy & resources.
Stantec has delivered consistent financial strength, robust backlog expansion, and exposure to long-term structural growth themes. This refined two-page report summarizes its financial performance, outlook, risks, and valuation.
2024 Performance Highlights
Net Revenue: $5.9B, up 15.8% YoY: Adjusted EBITDA Margin: 16.7%
Q3 2025 Results: Strong Numbers, Weak Sentiment
Net Revenue: $1.7B (+11.8% YoY); Adjusted EPS: $1.53 (+39% beat)
Adjusted EBITDA Margin: 19.0%: Operating Cash Flow: $551M YTD (+86%)
Stantec’s 2025 growth was supported by three strategic acquisitions—Page, Ryan Hanley and Cosgroves — which collectively helped lift the company’s full-year revenue growth guidance from 7–10% to 10–12%. However, this expansion also increased reliance on acquisition-driven growth and added complexity to integration efforts.
Growth Outlook
2025 Management Guidance
Revenue Growth: 10–12%
Adjusted EBITDA Margin: 17.2–17.5%
Adjusted EPS Growth: 18.5–21.5%
Long-Term Growth Drivers
Multi-year US Infrastructure Investment and Jobs Act (IIJA) tailwinds
Over 100 active data-center projects
Strong demand for water infrastructure (double-digit growth)
Rising environmental & energy transition engineering needs
Analyst Consensus
12-Month Target: C$169.89 (+26% upside)
Rating: Strong Buy (7/7 analysts)
Projected 2028 Revenue: C$8.2B
Risks & Concerns
Premium Valuation: Stantec trades at a premium relative to peers and leaves little room for operational missteps or slower growth.
Slowing US Organic Growth: The United States accounts for over 52% of its revenue. Flat US backlog growth and prolonged procurement cycles reduce near-term visibility and could limit momentum.
Margin Compression Risk: Seasonally weaker Q4 performance combined with integration expenses could reduce margins by 30–40 bps, potentially pressuring near-term earnings.
Competitive Pressure from WSP Global: WSP, a significantly larger and more diversified competitor, has delivered superior 10-year shareholder returns and poses a persistent competitive threat.
Long-Term Targets
Base Case: C$165–185
Bull Case: C$210–240
Risk-Adjusted Long-Term Target: C$175, implying 9–11% annual returns
Final Conclusion
Stantec remains a high-quality engineering and design leader with strong exposure to long-duration growth themes such as infrastructure renewal, water management, environmental services, and data centers. Company’s backlog strength and disciplined execution support a favorable long-term narrative.
However, at current levels, the stock’s valuation premium, slowing US growth, and integration uncertainties tilt the near-term risk-reward balance to the downside.
A pullback toward C$115–120 would provide a more compelling entry point, aligning valuation with sustainable growth expectations.
