ABM Industries Inc Dossier - Source-backed chat

ABM Industries Inc

ABMNYSE

SectorIndustrials

IndustrySpecialty Business Services

Beta (adjusted)0.79

Intrinsic Value $47.14median of 6 methods · middle span $42-$104based on filings through 31 Jul 2026

Market Price $48.10Price as of 30 Sep 2026

Near fair valueIntrinsic value is 2% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

Data confidence Sign in to view data confidence

Market Cap $2.8B

Enterprise Value $4.5B

Shares Outstanding 59.4M diluted

Moat Rating Narrow

Last ex-dividend2 Jul 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

ABM Industries is demonstrating robust top-line momentum, highlighted by record second-quarter fiscal 2026 revenue of $2.29 billion (up 8.4% YoY) and record first-half new sales bookings of $1.2 billion. This growth is driven by secular tailwinds in high-value segments, including a 27% surge in Technical Solutions fueled by AI data center and battery energy storage demand, alongside a 20% expansion in Aviation. While near-term margins are temporarily pressured by contract ramp-up costs and ERP implementation under the ELEVATE initiative, the company's valuation remains highly attractive. Trading at a forward P/E of under 11x and backed by a 56-year dividend growth streak, ABM offers a compelling risk-reward profile as operational efficiencies normalize and cash flow conversion accelerates in the back half of fiscal 2026.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets7 analysts · as of 18 Aug 2026

Low · most bearish analyst$45.00

Mean target$52.43

High · most bullish analyst$68.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$45.0015%

Persistent ERP integration challenges under the ELEVATE program continue to disrupt billing cycles, leading to elevated DSOs and negative pressure on free cash flow conversion. Commercial office vacancy rates worsen, severely impacting the core Business & Industry (B&I) segment. Labor shortages and wage inflation outpace contract price adjustments, causing segment operating margins to fall below 7.5% and forcing fiscal 2026 adjusted EPS to the low end of or below guidance.

Base CaseCentral scenario

$52.4360%

Matches the consensus mean

ABM successfully delivers on its reaffirmed fiscal 2026 adjusted EPS guidance of $3.85 to $4.15. Organic revenue growth finishes toward the top end of the 3% to 4% range, supported by steady aviation travel trends and manufacturing expansions. Segment operating margins stabilize near the low end of the 7.8% to 8.0% range as newer contract ramp-up costs subside. Free cash flow reaches the targeted $250 million, allowing the company to deleverage below 3.0x by fiscal year-end.

Bull CaseUpside scenario

$68.0025%

Accelerated demand for AI data centers, microgrids, and battery energy storage systems drives Technical Solutions growth well above expectations. Rapid stabilization of the ELEVATE ERP rollout leads to immediate administrative cost savings and working capital normalization, pushing free cash flow past the $250 million target. Synergies from the WGNSTAR acquisition in high-growth semiconductor markets materialize faster than projected, expanding margins toward the high end of the 7.8% to 8.0% range.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Strong secular tailwinds in Technical Solutions (AI data centers, battery storage) and Aviation segments.
Record first-half fiscal 2026 new sales bookings of $1.2 billion, providing high revenue visibility.
Exceptional dividend track record with over 50 consecutive years of annual dividend increases.
Attractive valuation trading at a steep discount to historical averages and commercial services peers.

Key Investment Risks

Operational and cash flow disruptions from the multi-year ELEVATE ERP system rollout.
Exposure to commercial real estate weakness and hybrid work models affecting office space utilization.
Labor availability constraints and wage inflation impacting service delivery margins.
Integration risks associated with large acquisitions such as WGNSTAR.

Thesis Invalidation Triggers

Failure to reduce leverage below 3.0x by the end of fiscal 2026.
A material downward revision of the fiscal 2026 adjusted EPS guidance range ($3.85 to $4.15).
Significant deterioration in free cash flow generation below the $250 million target due to working capital drag.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

Quality Pillars Members

This section is available to registered members. Create a free account or sign in to unlock the full breakdown.

Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.