Category: Technology Stocks

Tech stocks refer to any stock involved in the technology sector, from semiconductor producers to software providers. Tech stocks are often a leading indicator for the economy and the stock market. Technology stocks generally follow the pattern of more innovation in the market & new development of product.

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Expert Insights Technology Stocks

Narrow-Moat Syneos Reports Strong Q2 Results; Raising FVE to $64 on Improved 2021 Outlook

 global, late-stage contract research organizations, but at the price of a significant debt load. Most of Syneos’ CRO business comes from the most lucrative area of the CRO market: long, complex trials that typically require thousands of patients across the globe and thus have ample room for missteps. Trial sponsors need a CRO not only with strong technical know-how in specific disease areas, but also with the expertise in local country cultures and government relations.

Legacy INC Research was a leader in late-stage clinical research from small- and mid-cap biopharma, while inVentiv Health had better exposure to large pharma. The combined company has a diversified client base and provides a full portfolio of offerings, including staffing solutions and commercialization. While we don’t see significant competitive advantages in the staffing and selling business, both complete Syneos’ portfolio of services and offer flexibility to clients. The lower-margin commercial solutions business has had mixed success, but management’s cross-selling strategy to offer hybrid contracts with both clinical and commercial components should be a boon to the segment.

Financial Strength 

Narrow-moat Syneos reported second-quarter revenue of $1.3 billion, representing nearly a 27% increase year over year. Adjusted EBITDA was $175 million for the quarter, up 47% from the prior-year period. Syneos is recovering well from pandemic-related challenges, as evidenced by its strong year-over-year figures. Due to strong demand across Syneos’ clinical and commercial segments, management has updated its 2021 guidance. Syneos reported solid net new business wins in Clinical and Commercial Solutions, totaling $1.7 billion for the quarter, representing a book-to-bill ratio of 1.33 times. The new business wins contributed to an ending backlog of $11.7 billion for the quarter, up 21% from the prior-year period. 

Syneos ended the quarter with about $261 million of unrestricted cash and total debt outstanding of about $2.9 billion, resulting in a net leverage ratio of 3.8 times. We continue to think Syneos’ positive momentum indicates the operating environment remains strong. Syneos is in middling financial health after the 2017 merger, with about $2.9 billion in total debt weighing down the balance sheet. The deal pushed the company to the top tier of large, global late-stage players, which positions the company to secure deals with large biopharma companies and propel cash generation, but we expect the deal to limit near-term financial flexibility. Syneos’ major debt maturities are pushed out to 2024 and beyond, which provides the company ample opportunity to grow and unearth synergies from the merger.

Bulls Say’s 

  • Syneos’ late-stage contract research business is poised to benefit from stable research and development spending and increased outsourcing in the biopharma industry.
  • High levels of new drug approvals should boost growth in the company’s contract commercialization business.
  • Robust net new business wins should translate to accelerated growth in the contract research segment in the near term.

Company Profile 

Syneos is a global contract research and outsourced commercialization organization that provides services to pharmaceutical and biotechnology firms. Its clinical solutions segment offers early- to late-stage clinical trial support that ranges from specialized staffing models to strategic partnerships that oversee nearly all aspects of a drug program, while the company’s commercialization solutions includes outsourced sales, consulting, public relations, and advertising services.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Envestnet Inc to Ramp Up Investment Spending to Focus on Financial Wellness

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In 2015, Envestnet acquired Yodlee, which makes up the firm’s data and analytics segment. Yodlee’s revenue consists of its core data aggregation, alternative data to asset managers, and analytics to advisory firms. We do believe this segment is less moaty, as Yodlee faces competition from Plaid and MX Technologies as well as many alternative data providers. Following Visa’s announced (but ultimately nixed) acquisition of Plaid at a high valuation (we estimate over 20 times forward revenue), media reports have indicated that Envestnet is looking to sell Yodlee. For now, we believe Envestnet is comfortable keeping Yodlee in its product portfolio.

Envestnet believes marketplace exchanges can add to growth. In 2019, the company launched an insurance exchange with six national carriers to connect an advisor’s clients with annuity products. In addition to the insurance exchange, Envestnet launched Advisor Credit Exchange to help advisors address the lending needs of their clients. Envestnet is also focusing on growing asset-based revenue by providing value-added services such as impact portfolios, direct indexing, and tax overlays.

Financial Strength

Overall, Envestnet’s financial strength is sound. in our view, The company has used leverage for acquisitions. As of Dec. 31, 2020, Envestnet has approximately $385 million of cash and $756 million in convertible note debt. This equates to a net leverage ratio of about 2 EBITDA. While it’s true that the firm’s wealth solutions segment contains asset-based revenue, net of direct asset-based cost of revenue, these fees are less than 40% of the firm’s revenue. In addition, we estimate that 40% of Envestnet’s AUM/A are not in equities. Given this and the fact that the rest of Envestnet’s revenue is mostly recurring in nature, we’re comfortable with the company’s level of debt.

Bull Says

  • Envestnet has leading market share, and its product suite offers greater breadth than competitors.
  • Envestnet could pursue strategic alternatives with Yodlee.
  • Envestnet should continue to benefit from the trend of advisors leaving wire house firms to start their own practices and the shift from commission-based to fee based advice.

Company Profile

Envestnet provides wealth-management technology and solutions to registered investment advisors, banks, broker/dealers, and other firms. Its Tamarac platform provides trading, rebalancing, portfolio accounting, performance reporting, and client relationship management software to high-end RIAs. Envestnet’s portfolio management consultants provide research services and consulting services to assist advisors, including vetted third-party managed account products. In November 2015, Envestnet acquired Yodlee, a provider of data aggregation.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

NortonLifeLock Merging With Avast to Expand Reach within Consumer Security Market; Maintain $21 FVE

Our $21 fair value estimate for no-moat NortonLifeLock after announcing its intention to merge with fellow consume cybersecurity firm Avast. The news follows NortonLifeLock recently acknowledging rumors of Avast combination talks, and we believe this merger is in line with NortonLifeLock’s plan to use mergers as a growth accelerator with a focus on extracting overlapping costs. The deal puts Avast’s enterprise value between $8.6 billion and $9.2 billion, depending on how Avast shareholders elect to receive a majority stock or cash option. We updated our model with the assumption that the merger occurs in the middle of 2022 as expected, helping the company rapidly expand its revenue growth rate and achieve its reiterated adjusted earnings target of $3 per share in the coming years.

NortonLifeLock gains international reach, especially within the important German market, and helps bolster its opportunity with the small business segment through this merger. The combined company will be renamed at a later point and together have about 40 million direct customers and over 500 million total users, as well as about $3.5 billion in combined revenue with a blended adjusted operating margin of 52% (presynergies). 

NortonLifeLock expects to achieve $280 million of annual gross cost synergies, fully realized by the second year post-merger. We believe the merged company will be shareholder centric, with a plan to return 100% of free cash flow through the existing $0.125 quarterly dividend and future share buybacks.

Financial Deals Post – Merger

NortonLifeLock will finance the deal with cash and $5.35 billion of new debt facilities, which the company expects to rapidly pay down post-merger. Avast shareholders are expected to own between 14% and 26% of the combined company, depending on their election, post-merger. In the majority stock option, Avast shareholders receive $2.37 in cash and 0.1937 shares of NortonLifeLock whereas in the majority cash option, Avast shareholders receive $7.61 in cash and 0.0302 shares of NortonLifeLock. In the majority stock option, NortonLifeLock plans to increase its buyback program by $3 billion.

Current NortonLifeLock CEO Vincent Pilette will be the CEO, Avast’s current CEO will become President, and NortonLifeLock’s CFO will retain her role for the combined company. The merged company will have dual headquarters, with Avast in Prague, Czech Republic and NortonLifeLock in Tempe, Arizona. While we appreciate the combined company expanding its geographical footprint, we expect a concerted focus on reducing costs to reel in operating and fixed costs.

Company Profile 

NortonLifeLock sells cybersecurity and identity protection for individual consumers through its Norton antivirus and LifeLock brands. The company divested the Symantec enterprise security business to Broadcom in 2019. The Arizona-based company was founded in 1982, went public in 1989, and sells its solutions worldwide.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Syneos Reports Strong Q2 Results; Raising FVE to $64 on Improved 2021 Outlook

the new entity, into the upper echelon of large, global, late-stage contract research organizations, but at the price of a significant debt load. Most of Syneos’ CRO business comes from the most lucrative area of the CRO market: long, complex trials that typically require thousands of patients across the globe and thus have ample room for missteps. Trial sponsors need a CRO not only with strong technical know-how in specific disease areas, but also with the expertise in local country cultures and government relations.

Legacy INC Research was a leader in late-stage clinical research from small- and mid-cap biopharma, while inVentiv Health had better exposure to large pharma. The combined company has a diversified client base and provides a full portfolio of offerings, including staffing solutions and commercialization. While we don’t see significant competitive advantages in the staffing and selling business, both complete Syneos’ portfolio of services and offer flexibility to clients. The lower-margin commercial solutions business has had mixed success, but management’s cross-selling strategy to offer hybrid contracts with both clinical and commercial components should be a boon to the segment.

Financial Strength 

Narrow-moat Syneos reported second-quarter revenue of $1.3 billion, representing nearly a 27% increase year over year. Adjusted EBITDA was $175 million for the quarter, up 47% from the prior-year period. Syneos is recovering well from pandemic-related challenges, as evidenced by its strong year-over-year figures. Due to strong demand across Syneos’ clinical and commercial segments, management has updated its 2021 guidance. Syneos reported solid net new business wins in Clinical and Commercial Solutions, totaling $1.7 billion for the quarter, representing a book-to-bill ratio of 1.33 times. The new business wins contributed to an ending backlog of $11.7 billion for the quarter, up 21% from the prior-year period. 

Syneos ended the quarter with about $261 million of unrestricted cash and total debt outstanding of about $2.9 billion, resulting in a net leverage ratio of 3.8 times. We continue to think Syneos’ positive momentum indicates the operating environment remains strong. Syneos is in middling financial health after the 2017 merger, with about $2.9 billion in total debt weighing down the balance sheet. The deal pushed the company to the top tier of large, global late-stage players, which positions the company to secure deals with large biopharma companies and propel cash generation, but we expect the deal to limit near-term financial flexibility. Syneos’ major debt maturities are pushed out to 2024 and beyond, which provides the company ample opportunity to grow and unearth synergies from the merger.

Bulls Say’s 

  • Syneos’ late-stage contract research business is poised to benefit from stable research and development spending and increased outsourcing in the biopharma industry.
  • High levels of new drug approvals should boost growth in the company’s contract commercialization business.
  • Robust net new business wins should translate to accelerated growth in the contract research segment in the near term.

Company Profile 

Syneos is a global contract research and outsourced commercialization organization that provides services to pharmaceutical and biotechnology firms. Its clinical solutions segment offers early- to late-stage clinical trial support that ranges from specialized staffing models to strategic partnerships that oversee nearly all aspects of a drug program, while the company’s commercialization solutions includes outsourced sales, consulting, public relations, and advertising services.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Marvell Technology Inc. (NASDAQ: MRVL) Maintains FVE $40 & Aiming to take the Cloud and 5G Markets

The concept of 5G network with magnifying glass on modern circuit board, high-speed mobile internet and new generation networks technology background

Marvell is the leader in DPUs and PAM-4 optics, and the clear second in the enterprise and cloud Ethernet markets. Marvell’s recent financial history has been choppy, as result of CEO Matt Murphy’s aggressive overhaul of the business’ focus. Marvell has emerged as a strong competitor in the networking chip market, following a multiyear business pivot to acquisitions, divestitures, and organic development to focus on high-growth cloud, 5G, and automotive markets.

Between data processing units, or DPUs, optical interconnect, and Ethernet solutions, Marvell has one of the broadest networking silicon portfolios in the world, and we think it is primed to steal market share from incumbent Broadcom with bleeding-edge technology. Marvell has the right portfolio to invest aggressively in organic growth going forward, but don’t rule out further acquisitions to bolster its competitiveness and enter adjacent markets.

Company’s Future outlook
Marvell’s 2021 acquisitions of In phi and Innovium will give it a path to robust and sustained top-line growth in the cloud market and expect significant margin expansion over our 10-year forecast even as it invests to compete with larger rivals. Nevertheless, the market is assuming nearly immediate operating synergies from these two acquisitions, which take some time and the shares are significantly overvalued at this point and caution investors to await a greater margin of safety. The reorganization is squarely in the firm’s rearview mirror now, and forecast mid-teens sales growth and immense margin expansion over the next 10 years. The combination of 2021 acquisitions In phi and Innovium under Marvell’s umbrella will create a dangerous combination to Broadcom in the high-performance switching arena and enable share gains.

Company Profile
Marvell Technology Inc. (NASDAQ: MRVL) is a leading fables chipmaker focused on networking and storage applications. Marvell serves the data center, carrier, enterprise, automotive, and consumer end markets with processors, optical interconnections, application-specific integrated circuits (ASICs), and merchant silicon for Ethernet applications. The firm is an active acquirer, with five large acquisitions since 2017 helping it pivot out of legacy consumer applications to focus on the cloud and 5G markets.

(Source: Morningstar)

General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Nvidia’s (NASDAQ NVDA) Revenue Continues To Rise, Despite Concerns about Cryptocurrency Demand

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The firm had record showings in both gaming and data center segments, but we are concerned with the surge of demand for Nvidia’s gaming GPUs used in cryptocurrency mining (specifically Ethereal), as we view this application as a volatile one that could lead to lower GPU sales if crypto prices trend down.

Nvidia continues to execute well in growing its data center business thanks to its A100 GPU for Artificial Intelligence and networking products from its 2020 Mellanox acquisition. Nvidia is paying a high multiple for ARM’s earnings. The Fair value estimate of Nvidia is $515 per share. First-quarter sales grew 84% year over year to $5.7 billion, with gaming and data center revenue up 106% and 79%, respectively. Data center sales benefitted from the inclusion of Mellanox and continued adoption of Nvidia’s A100 GPUs. Gross margins during the first quarter grew 100 basis points sequentially thanks to a more favorable product mix. Nvidia’s gaming’s GPUs are receiving an artificial boost from crypto mining that could be difficult to sustain.

The chief growth drivers are expected to be gaming; data center, and crypto mining processors, or CMPs. CMPs are optimized for crypto mining power efficiency and will provide Nvidia’s management some visibility into the contribution of crypto mining to total revenue.

Company’s Future Outlook
We estimate crypto mining related demand contributed around $400 million to $500 million in GPU sales during the quarter. It is expected that the firm’s automotive segment to resume growth in the coming years as its autonomous solutions are adopted and its legacy infotainment business is ramped down. Specifically, Nvidia’s automotive design win pipeline exceeds $8 billion through fiscal 2027. Management expects second-quarter sales to be at a midpoint of $6.3 billion, which implies 63% year-over-year growth and was also ahead of our estimates. For the second quarter, CMP sales are expected to be $400 million. Nvidia’s channel inventories remain lean, and management expects the firm to be supply constrained into the second half of the year. While we anticipate strong growth for Nvidia in the coming quarters, we remain vigilant of signs of weaker crypto-mining demand for its GPUs should crypto prices fall.

Company Profile
Nvidia Corporation (NASDAQ: NVDA) is the leading designer of graphics processing units that enhance the experience on computing platforms. The firm’s chips are used in a variety of end markets, including high-end PCs for gaming, data centers, and automotive infotainment systems. In recent years, the firm has broadened its focus from traditional PC graphics applications such as gaming to more complex and favorable opportunities, including artificial intelligence and autonomous driving, which leverage the high-performance capabilities of the firm’s graphics processing units.

(Source: Morningstar)

General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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ViacomCBS Posts In-Line Q2, but Streaming Momentum Clearly Building

Top-line growth of 8% was driven by the rebound in advertising, the return of live sports, and continued streaming growth. The firm’s streaming platforms posted a strong quarter both in terms of new subscribers and monetization. ViacomCBS also announced a distribution deal with Sky to launch Paramount+ in 2022 in its Western European markets.

Global streaming subscribers increased by 6.5 million during the quarter to 42.4 million, and Pluto, a free platform, added 2.8 million monthly active users to end the quarter at 52.3 million. The recent results and the Sky agreement reinforce our view that the long-term guidance of 65-75 million streaming subscribers by 2024 is very conservative. 

While Paramount+ is only available in 25 markets, we expect much wider distribution by 2024, making the high-end target of another 33 million net adds seem very modest.

Streaming revenue exploded, up 98%, as ad revenue bounced back at Pluto and the smaller streaming platforms like Showtime and BET+ continued to grow their subscriber bases. Streaming subscription revenue improved to $481 million, up 82% year over year and subscription average revenue per user increased 4% sequentially.

 On the ad side, streaming revenue jumped by 102% to $502 million as Pluto continues to improve engagement with domestic time watched per MAU up 45% in the quarter. The June launch of Paramount+ Essential, a lower priced ad-supported tier, should help boost advertising growth.

TV Entertainment revenue increased 23% year over year. Broadcast ad revenue was buoyed by the return of the NCAA Final Four and golf tournaments along with the overall rebound in ad demand. 

Affiliate revenue, up 10%, was driven by strong reverse compensation and retransmission fee growth at the CBS broadcast network. Adjusted EBITDA for the segment dropped by 45% to $216 million as the firm continues to invest in Paramount+.

Cable networks revenue grew by 8% versus a year ago to $3.5 billion. Cable ad revenue increased by 24% as the higher pricing in the U.S. and international growth more than offset lower ratings. 

Affiliate revenue was up 9% as the expanded online distribution from services like YouTube TV and rate increases more than offset the ongoing cordcutting trend.

Company Profile

ViacomCBS is the recombination of CBS and Viacom that has created a media conglomerate operating around the world. CBS’ television assets include the CBS television network, 28 local TV stations, and 50% of CW, a joint venture between CBS and Time Warner. The company also owns Showtime and Simon & Schuster. Viacom owns several leading cable network properties, including Nickelodeon, MTV, BET, Comedy Central, VH1, CMT, and Paramount. Viacom has also built several online properties on the strength of these brands. Viacom’s Paramount Pictures produces original motion pictures and owns a library of 2,500 films, including the Mission: Impossible and Transformers series.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Motorola Solutions Inc. (NYSE: MSI) Increases Guidance Following Strong Quarter, Meeting Prior Expectations; $175 FVE

Our $175 fair value estimate for Motorola is unchanged, as the new outlook aligns with our previous above-guidance expectations for fiscal 2022. We’re also pleased to see continued growth for the firm’s software and services segment, and continue to believe a heavier software mix will drive margin expansion for Motorola through 2025.

Motorola is benefiting from looser security budgets as the U.S. economy rebounds from 2020, and think it will see multi-year demand as state and local governments digest funds from U.S. government stimulus during the pandemic. Still, we think of Motorola as a steady grower, and think the market is painting a more rapid sales growth and margin expansion picture than is reasonable. We currently view shares as overvalued, and would recommend waiting for a pullback to invest. Management commented on its acquisition of Open path that occurred after quarter-end. The $297 million acquisition gives Motorola a stronger position in access control, which is quickly becoming a greater portion of its video segment.

Second-quarter revenue grew 22% year over year to $1.97 billion–2% higher than the top end of quarterly guidance– behind broad-based strength. Motorola’s video business posted 66% annual growth, which we think is resulting from strong market share gains against Axon in the body cam market. Non-GAAP operating margin of 24.5% grew 230 basis points year over year and 130 basis points sequentially, mainly behind higher sales volume and a greater mix of video and command center revenue.

Company’s Future Outlook

It is estimate these to continue increasing as part of Motorola’s mix, and think margin expansion should continue. We maintain our forecast for non-GAAP operating margin to expand 500 basis points through 2025. Command center software lagged the firm’s overall growth profile, but we think it’s primed for an inflection point with the full Command Central suite launching during the quarter, which we expect to augment switching costs a customers over time.

Company Profile

Motorola Solutions Inc (NYSE: MSI) is a leading provider of communications and analytics, primarily serving public safety departments as well as schools, hospitals, and businesses. The bulk of the firm’s revenue comes from sales of land mobile radios and radio network infrastructure, but the firm also sells surveillance equipment and dispatch software. Seventy-five percent of Motorola’s revenue comes from government agencies, while 25% comes from its commercial customers. Motorola has customers in over 100 countries and in every state in the United States.

(Source: Morningstar)

General Advice Warning
Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Technology Stocks

Grainger recovered its stronger sales growth but margin constraints have emerged in 2021.

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The growing prevalence of e-commerce has intensified the competitive environment because of more price transparency and increased access to a wider array of vendors, including Amazon Business, which has entered the mix. 

As consumer preference began to shift to online and electronic purchasing platforms, Grainger invested heavily in improving its e-commerce capabilities and restructuring its distribution network. It is the now the 11th-largest e-retailer in North America; it shrank its U.S. branch network from 423 in 2010 to 287 in 2020 and added distribution centers in the U.S. to support the growing amount of direct-to-customer shipments. 

To address this problem, Grainger rolled out a more competitive pricing model. Lower prices hurt gross profit margins, but volume gains, especially among higher-margin spot buys and midsize accounts, have offset price reductions and helped the company meet its 12%-13% operating margin goal by 2019 (12.1% adjusted operating margin in 2019). Grainger continues to expand its endless assortment strategy, but we’re skeptical of the margin expansion opportunity for this business, given strong competition in the space from the likes of Amazon Business and others. 

Financial Strength

As of the second quarter of 2021, Grainger had $2.4 billion of debt outstanding, which net of $547 million of cash represents a leverage ratio of less than 1.1 times our 2021 EBITDA estimate. Grainger’s outstanding debt consists of $500 million of 1.85% senior notes due in 2025, $1 billion of 4.6% senior notes due in 2045, $400 million of 3.75% senior notes due in 2046, and $400 million of 4.2% senior notes due in 2047. Grainger has a proven ability to generate free cash flow throughout the cycle. Indeed, it has generated positive free cash flow every year since 2000, and its free cash flow generation tends to spike during downturns because of reduced working capital requirements. Given the firm’s reasonable use of leverage and consistent free cash flow generation, we believe Grainger’s financial health is satisfactory.

Bull Says

  • With a more sensible, transparent pricing model, Grainger should continue to gain share with existing customers and win higher-margin midsize accounts.
  • As a large distributor with national scale and inventory management services, Grainger is well positioned to take share from smaller regional and local distributors as customers consolidate their MRO spending.
  • Grainger operates a shareholder-friendly capital allocation strategy; it has increased its dividend for 49 consecutive years and has reduced its diluted average share count by over 40% over the last 20 years.

Company Profile

W.W. Grainger (NYSE: GWW) distributes 1.5 million of maintenance, repair, and operating products that are sourced from over 4,500 suppliers. The company serves approximately 5 million customers through its online and electronic purchasing platforms, vending machines, catalog distribution, and network of over 400 global branches. In recent years, Grainger has invested in its e-commerce capabilities and is the 11th-largest e-retailer in North America.

(Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.

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Jacobs Engineering Group Inc. (NYSE: J) after Strong Fiscal Q3 Raises FVE. To $141

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he fair value increase reflects the firm’s outperformance, an improved near-term outlook, and time value of money, partially offset by the implementation of a probability weighted change in the U.S. statutory tax rate in our model.

Jacobs’ net revenue was up 10.6% from the prior-year period. Critical mission solutions increased its revenue 0.6% year over year. People & places solutions net revenue grew 1.4%. Lastly, PA Consulting delivered stellar 36% year-over year revenue growth. The firm’s adjusted operating margin expanded by 170 basis points from the prior-year period, with improvement across all business lines.

Management increased its outlook for full-year fiscal 2021 and now expects adjusted EBITDA in the range of $1,210- $1,275 million (up from $1,200-$1,270 million) and adjusted EPS in the range of $6.15-$6.35 (up from $6.00-$6.30). Furthermore, management is optimistic that the company can deliver double-digit adjusted EBITDA growth over the medium term. 

Company’s Future Outlook

We believe the company is poised to capitalize on multiple favorable secular drivers, including infrastructure modernization, space exploration, intelligence analytics, energy transition, supply chain investments (particularly in the semiconductor and life sciences end markets), and the 5G build out. We also think Jacobs is well-positioned to benefit from a likely infrastructure plan in the U.S., given the firm’s strong position in areas such as water and transportation infrastructure.

Company Profile

Jacobs Engineering Group Inc. (NYSE: J) is a global provider of engineering, design, procurement, construction, and maintenance services as well as cyber engineering and security solutions. The firm serves industrial, commercial, and government clients in a wide variety of sectors including water, transportation, healthcare, technology, and chemicals. Jacobs Engineering employs approximately 55,000 workers. The company generated $13.6 billion in revenue and $970 million in adjusted operating income in fiscal 2020.

 (Source: Morningstar)

General Advice Warning

Any advice/ information provided is general in nature only and does not take into account the personal financial situation, objectives or needs of any particular person.