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  5. STN: An analyst on BNN said today that he feels Stantec's share price could double in the next 5 years, as they do a lot of business in the USA, which is spending a lot on infrastructure improvements, w... [Stantec Inc.]
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Q: An analyst on BNN said today that he feels Stantec's share price could double in the next 5 years, as they do a lot of business in the USA, which is spending a lot on infrastructure improvements, which should benefit Stantec. He felt their headcount in 5 years could be roughly where WSP Global's headcount is now, with some of the growth coming from acquisitions. Wondering what you think of Stantec's growth potential over the next 5 years, and also about their debt levels. Looking at the balance sheet, the debt to cash flow looks a little high.
Asked by Dan on May 26, 2023
5i Research Answer:

Analysts expect some margin expansion over the next few years while sales growth is anticipated to normalize back down to ~5% levels in the coming years. We recently trimmed this position in our growth model portfolio as it has performed well since we added it, and its valuations are on the high end of its historical averages, with a forward P/E of 21.2X and a forward sales multiple of 1.7X. Its debt levels have been expanding over the past several years, and its net debt to EBITDA is somewhat high at 2.6X. Although, we continue to like the company and feel that it can perform well over the next five years.