Why ABM Industries Stock May Not Be a Safe Bet After All

ABM is up 8% since the start of the year

May 12, 2022 at 10:16 AM
facebook twitter linkedin

ABM Industries Incorporated (NYSE:ABM) is one of the world’s largest providers of integrated facility services throughout the United States, the United Kingdom, and other international locations. ABM provides a variety of facility services that includes janitorial, engineering, parking, electrical & lighting, energy solutions, HVAC & mechanical, landscape & turf, and mission critical solutions.

ABM stock has decreased about 17% in price compared to what it traded at a year ago and is down 18% since reaching its 52-week high of $54.00 in late April. Additionally, shares of the facility services company have dropped in price 7% over the past month. However, ABM stock is still up 8% year-to-date and have recovered 15% after dropping to a 52-week low of $38.44 in December. ABM Industries Incorporated also offers a dividend yield of 1.71% with a forward dividend of $0.78.

Furthermore, ABM stock’s fundamentals provide a mix-match of positive and negative attributes that make ABM a risky investment. To begin with, the service provider holds $1.15 billion in total debt on their balance sheet and just $46.6 million in cash. ABM Industries has also struggled to convert large revenue numbers into profits, which has left them with an inflated price-earnings ratio of 23.55, despite having a relatively low price-sales ratio of 0.47.

This gap is expected to get larger with ABM Industries estimated to grow revenues 23.6% and earnings just 1.1% for fiscal 2022. Nonetheless, the facility services company is estimated to increase revenues 3.7% and earnings 8% for fiscal 2023, which would signal a shift in the right direction. Still, ABM will need to improve their profit margins significantly before it can become a viable option for fundamentals-based investors.


Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

Schaeffer's Daily Bulletin Offer


Special Offers from Schaeffer's Trading Partners