KeyBanc maintains Tetra Tech stock Overweight, $34 target

Published 08/05/2025, 12:34
KeyBanc maintains Tetra Tech stock Overweight, $34 target

On Wednesday, KeyBanc Capital Markets sustained its optimistic stance on Tetra Tech stock (NASDAQ:TTEK), maintaining an Overweight rating and a price target of $34.00. The firm’s analyst, Sangita Jain, highlighted the company’s ability to grow independently of its USAID/Department of State projects, as evidenced by the recent quarterly results. According to InvestingPro data, the company has demonstrated solid growth with revenue increasing nearly 12% over the last twelve months, though the stock is currently trading at a relatively high P/E ratio of 31.6.

Tetra Tech has proactively addressed the cancellation of USAID projects by removing them from its backlog and leveraging its strong balance sheet to buy back shares during a period when its valuation was perceived to be lower than usual. The company’s updated outlook includes a modest increase in guidance, which reflects the robustness of its diversified portfolio. Despite the stock’s significant decline of about 34% over the past six months, InvestingPro analysis shows the company maintains a healthy financial position with moderate debt levels and has consistently raised its dividend for 11 consecutive years.

The analyst views the latest financial release as a pivotal moment for Tetra Tech, signaling a fresh start following the termination of USAID/Department of State projects. KeyBanc reasserts its Overweight rating, indicating confidence in the stock’s potential.

For investors seeking deeper insights before the earnings call, InvestingPro offers 10+ additional exclusive tips and comprehensive financial analysis for Tetra Tech. Tetra Tech’s management is scheduled to conduct a conference call on Thursday, May 8, at 11:00 AM EDT. During the call, it is anticipated that the company will provide insights into the long-term effects of the USAID project cancellations, discuss the bid pipeline for work with other federal agencies, including civil entities, and share updates on the two acquisitions completed since the end of the last quarter. Updates on Tetra Tech’s software initiatives are also expected to be part of the discussion.

In other recent news, Tetra Tech announced its second-quarter financial results, which exceeded expectations. The company reported adjusted earnings per share of $0.33, surpassing the analyst estimate of $0.30. Revenue for the quarter was $1.32 billion, significantly above the consensus expectation of $1.04 billion and marking a 6% year-over-year increase. Tetra Tech also raised its full-year net revenue guidance to between $4.40 billion and $4.77 billion, along with an increased adjusted EPS forecast of $1.42 to $1.52, above the analyst consensus of $1.41. The company’s backlog rose to $4.09 billion, up $127 million from the previous year. Additionally, Tetra Tech’s board approved a 12% increase in its quarterly dividend to $0.065 per share and expanded its share repurchase program by $500 million. These developments indicate a strong performance despite challenges, as highlighted by CEO Dan Batrack.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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