APi Group Corp (NYSE: APG)

Sector: Industrials Industry: Engineering & Construction CIK: 0001796209
Market Cap 17.37 Bn
P/B 5.30
P/E 111.36
P/S 2.27
ROIC (Qtr) 5.77
Div Yield % 0.00
Rev 1y % (Qtr) 14.18
Total Debt (Qtr) 3.05 Bn
Debt/Equity (Qtr) 0.93

About

APi Group Corp, known by its ticker symbol APG, is a prominent player in the business services industry, specializing in safety and specialty services. With a presence in over 500 locations across the globe, the company operates in two primary segments: Safety Services and Specialty Services. APi Group Corp's Safety Services segment is a leading provider of safety services in North America, Europe, and Asia Pacific. The company's focus is on end-to-end integrated occupancy systems, which include fire protection solutions, HVAC, and entry systems....

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Price action

Investment thesis

Bull case

  • Healthy cash reserves of 555M provide 5.61x coverage of short-term debt 99M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 660M provides strong 17.84x coverage of stock compensation 37M, indicating sustainable incentive practices.
  • Tangible assets of 3.94B provide exceptional 5.86x coverage of deferred revenue 672M, showing strong service capability backing.
  • Robust free cash flow of 585M exceeds capital expenditure of 75M by 7.80x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 3.94B provides 4.04x coverage of working capital 975M, indicating strong operational backing.

Bear case

  • Operating cash flow of 660M barely covers its investment activities of (380M), with a coverage ratio of -1.74, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 555M provide limited coverage of acquisition spending of (305M), which is -1.82x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 660M provides insufficient coverage of deferred revenue obligations of 672M, which is 0.98x, raising concerns about future service delivery capabilities.
  • High receivables of 1.56B relative to inventory of 148M (10.55 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Operating earnings of 507M show weak coverage of depreciation charges of 429M, with a 1.18 ratio indicating high capital intensity and potential reinvestment needs.

Segments Breakdown of Revenue (2024)

Consolidation Items Breakdown of Revenue (2024)

Peer comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 62.71 Bn 61.60 2.31 6.02 Bn
2 FER Ferrovial SE 48.08 Bn 14.25 5.05 -
3 FIX Comfort Systems Usa Inc 35.76 Bn 42.69 4.30 0.39 Bn
4 EME EMCOR Group, Inc. 29.29 Bn 25.91 1.80 0.42 Bn
5 APG APi Group Corp 17.37 Bn 111.36 2.27 3.05 Bn
6 MTZ Mastec Inc 17.01 Bn 51.39 1.24 2.77 Bn
7 J Jacobs Solutions Inc. 16.94 Bn 58.56 1.41 2.71 Bn
8 BLD TopBuild Corp 13.35 Bn 23.52 2.55 3.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.29 1.61
EV to Cash from Ops. EV/CFO 30.30 6.94
EV to Debt EV to Debt 6.55 11.81
EV to EBIT EV/EBIT 39.44 17.80
EV to EBITDA EV/EBITDA 21.39 13.77
EV to Free Cash Flow [EV/FCF] EV/FCF 34.19 55.77
EV to Market Cap EV to Market Cap 1.15 1.20
EV to Revenue EV/Rev 2.61 1.65
Price to Book Value [P/B] P/B 5.30 5.81
Price to Earnings [P/E] P/E 111.36 35.89
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 1.34 2.51
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 25.81
Dividend per Basic Share Div per Share (Qtr) 0.00 0.24
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 4.05
Interest Coverage Int. cover (Qtr) 3.50 80.15
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -435.71 -166.01
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 13.96 637.72
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 5.87
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 23.63 92.47
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 10.39 8.04
EBIT Growth (1y) % EBIT 1y % (Qtr) 15.23 85.34
EBT Growth (1y) % EBT 1y % (Qtr) 21.89 42.07
EPS Growth (1y) % EPS 1y % (Qtr) 129.94 43.76
FCF Growth (1y) % FCF 1y % (Qtr) -5.65 -20.95
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 12.93 32.46
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.88 1.14
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.05
Cash Ratio Cash Ratio (Qtr) 0.27 0.38
Current Ratio Curr Ratio (Qtr) 1.48 1.55
Debt to Equity Ratio Debt/Equity (Qtr) 0.93 0.89
Interest Cover Ratio Int Coverage (Qtr) 3.50 80.15
Times Interest Earned Times Interest Earned (Qtr) 3.50 80.15
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 12.20 0.40
EBIT Margin % EBIT Margin % (Qtr) 6.62 -2.31
EBT Margin % EBT Margin % (Qtr) 4.73 -4.59
Gross Margin % Gross Margin % (Qtr) 31.10 20.38
Net Profit Margin % Net Margin % (Qtr) 2.00 -5.96