Highlights

  • ABM shows 49.34% one-year basic EPS growth, a P/E of 19.49 and PEG of 0.00.
  • Third quarter net income was $49.7 million against $41.8 million; revenues were $2,317.1 million.
  • Nine-month net cash from operating activities was $275.0 million, against $101.0 million.
  • ABM closed the WGNSTAR acquisition on February 4 and added a $300.0 million receivables facility.

Growth, P/E and PEG sit side by side at ABM Industries (NYSE:ABM), an undervalued growth stock: basic earnings per share grew 49.34% over one year, the trailing twelve-month P/E ratio is 19.49 and the PEG ratio, on an expected basis, is 0.00, with shares trading at USD 53.49 on October 28, 2026, down 0.10%. Alongside those figures, the facility services provider completed its WGNSTAR acquisition on February 4, entered a $300.0 million trade receivable financing agreement on July 28, and reported fiscal 2026 third quarter net income of $49.7 million in its Form 10-Q filed in September.

Based in New York, New York, and incorporated in Delaware, ABM states that it provides integrated facility solutions customized by industry, and its fiscal year ends October 31. Its reportable segments are Business & Industry, Manufacturing & Distribution, Aviation, Education and Technical Solutions, which covers mechanical and electrical systems, EV charging and microgrid systems. In 2021 the company launched its multiyear ELEVATE transformation plan.

Growth: Fiscal Third Quarter Earnings, Revenues and Segments

Net income was $49.7 million in the fiscal 2026 third quarter against $41.8 million a year earlier, and $131.6 million for the nine months against $127.6 million. Third quarter basic and diluted earnings per share were both $0.84 against $0.67. Nine-month basic earnings per share were $2.22 against $2.04, and diluted were $2.20 against $2.03.

Revenues rose 4.2% to $2,317.1 million, which the company said comprised organic growth of 2.1% and acquisition growth of 2.1%. Operating profit was $91.5 million against $83.4 million, which the company attributed primarily to higher revenues and lower general and administrative compensation after headcount reductions under its Restructuring Program.

Manufacturing & Distribution revenues were $481.0 million, up 17.6%, including a $40.4 million contribution from WGNSTAR. Aviation revenues were $328.1 million, up 12.5%. Technical Solutions revenues were $259.9 million, up 4.2%, and Education revenues were $235.8 million, up 0.3%.

Valuation: P/E of 19.49, PEG of 0.00 and Operating Cash Flow

The P/E ratio of 19.49 is measured on trailing twelve-month earnings, and the PEG ratio of 0.00 on an expected basis. Stockholders' equity was $1,790.2 million at July 31, 2026. Net cash provided by operating activities was $275.0 million for the nine months against $101.0 million, which the company attributed primarily to working capital changes.

On the fiscal third quarter call on September 9, management said cash generation has historically been an important strength of ABM and that year-to-date free cash flow rose after the stabilization of its enterprise resource planning system.

Capital Returns and Balance Sheet: Dividends, Debt and Receivables Facility

ABM declared dividends of $0.87 per common share in the nine months, including $0.290 in the third quarter, and paid $51.2 million. It repurchased 2.13 million shares for $94.1 million in the nine months, made none in the third quarter, and had $89.0 million of authorization remaining at July 31, 2026.

Total outstanding borrowings were $1.8 billion at July 31, 2026 with up to $495.3 million of borrowing capacity. A $255.0 million First Incremental Term Loan was added on February 3, 2026 to the Amended Credit Facility, which matures on February 26, 2030. The Receivables Financing Agreement allows up to $300.0 million and expires on July 27, 2029; $300.0 million was outstanding. The company reported compliance with its covenants.

Disclosed Risks and Outlook for Fiscal 2026

Business & Industry revenues fell 2.6% to $1,012.2 million on attrition of certain domestic clients and a large U.K.-based transportation client. Aviation operating profit fell 6.9% to $18.4 million, with margin at 5.6% against 6.8%, which the company attributed to contract and service mix. Manufacturing & Distribution margin was 8.4% against 8.9%. Interest expense was $29.5 million against $25.3 million.

The third quarter effective tax rate was 21.3% against 29.6%, reduced by discrete benefits; the WOTC and FEZ credits expired on December 31, 2025. The company accrued $8.8 million for probable litigation losses, estimated reasonably possible losses at zero to $14.9 million, and disclosed ongoing state sales tax audits. Restructuring charges totaled $28.0 million through the third quarter, against expected annualized savings of approximately $35.0 million.

On the call, management raised the midpoint of fiscal 2026 adjusted EPS guidance (non-GAAP) to a range of $3.95 to $4.10. It guided to free cash flow of approximately $210 million on a reported basis, against a prior forecast of $185 million, organic revenue growth of 3% to 4% and segment operating margin of 7.7% to 7.8%. Management expects Business & Industry to return to organic growth around the middle of fiscal 2027.