APi Group Corp (APG) Stock Analysis and Metrics

Sector: Industrials Industry: Engineering & Construction CIK: 0001796209

P/B 5.02

P/E 105.48

P/S 2.15

Market Cap 16.45 Bn

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....

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. These integrated systems are designed, installed, inspected, and serviced across a variety of industries and facilities, such as commercial, education, healthcare, high-tech, industrial, and special-hazard settings. The company's competitive strengths in this segment include its leading market positions in diverse niche industries, a differentiated business model focused on growing service revenue, and an attractive financial performance with strong margin and cash flow profile.

The Specialty Services segment of APi Group Corp is a leading provider of various infrastructure services and specialized industrial plant services. The company's offerings in this segment include maintenance and repair of critical infrastructure such as underground electric, gas, water, sewer, and telecommunications infrastructure. The services provided by this segment encompass engineering and design, fabrication, installation, maintenance, repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and performing ongoing integrity management and maintenance for customers within the energy industry. The company's competitive strengths in this segment mirror those of the Safety Services segment, with leading market positions in diverse niche industries, a differentiated business model focused on growing service revenue, and an attractive financial performance with strong margin and cash flow profile.

APi Group Corp operates in highly fragmented industries, comprising national, regional, and local companies that provide services to customers across various end markets and geographies. The company believes that increased regulation, deferred infrastructure investment, and attractive industry fundamentals are trends that will continue to impact demand for its services.

The company's leadership culture is built on the principles of Building Great Leaders, a cross-functional leadership development platform designed to enable independent company leadership, cultivate broad management skills, enhance organizational flexibility, and empower the next cohort of leaders across its businesses. This culture of investing in leadership development at all levels of the organization has created an empowered, entrepreneurial atmosphere that facilitates organizational sharing of knowledge and best practices and enables the development of cross-brand solutions and innovation.

APi Group Corp's customers are long-standing relationships with many customers in each of the industries it serves. The company serves customers in both the public and private sectors, including commercial, industrial, distribution and fulfillment centers, manufacturing, education, healthcare, telecom, utilities, transmission and integrity, high-tech, entertainment, government, and infrastructure. The company has low customer concentration, with no single customer accounting for more than 5% of its total net revenues.

In terms of its product and service offerings, APi Group Corp has a range of brands and trade names. These include, but are not limited to, the following: Safety Services, Specialty Services, fire protection solutions, HVAC, entry systems, integrated occupancy systems, underground electric, gas, water, sewer, and telecommunications infrastructure, engineering and design, fabrication, installation, maintenance, repair, retrofitting and upgrading, pipeline infrastructure, access and road construction, supporting facilities, and ongoing integrity management and maintenance.

Stock Price Chart

Analysis

Pros

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.

Cons

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.

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.	65.02 Bn	63.86	2.39	6.02 Bn
2	FER	Ferrovial SE	48.37 Bn	14.34	5.08	-
3	FIX	Comfort Systems Usa Inc	34.25 Bn	40.89	4.12	0.39 Bn
4	EME	EMCOR Group, Inc.	28.27 Bn	25.01	1.74	0.42 Bn
5	MTZ	Mastec Inc	17.18 Bn	51.88	1.25	2.77 Bn
6	APG	APi Group Corp	16.45 Bn	105.48	2.15	3.05 Bn
7	J	Jacobs Solutions Inc.	16.43 Bn	56.79	1.37	2.71 Bn
8	ACM	Aecom	13.10 Bn	23.31	0.81	3.23 Bn

Industry Comparisons

Current Valuation

Metric	Value	Industry
EV to Assets	2.19	1.60
EV to Cash from Ops.	28.91	6.21
EV to Debt	6.25	12.02
EV to EBIT	37.64	16.63
EV to EBITDA	20.41	13.11
EV to Free Cash Flow [EV/FCF]	32.62	64.21
EV to Market Cap	1.16	1.27
EV to Revenue	2.49	1.63
Price to Book Value [P/B]	5.02	5.92
Price to Earnings [P/E]	105.48	28.08

Dividend Metrics

Metric	Value	Industry
Dividend Coverage Ratio	1.34	2.56
Dividend Payout Ratio %	0.00	17.64
Dividend per Basic Share	0.00	0.24
FCF Dividend Payout Ratio %	0.00	8.25
Interest Coverage	3.50	80.17

Growth Metrics

Metric	Value	Industry
Capex Growth (1y) %	-435.71	-167.27
Cash and Equivalents Growth (1y) %	13.96	637.93
Dividend Growth (1y) %	0.00	2.92
EBIAT Growth (1y) %	23.63	92.73
EBITDA Growth (1y) %	10.39	8.03
EBIT Growth (1y) %	15.23	85.41
EBT Growth (1y) %	21.89	42.19
EPS Growth (1y) %	129.94	43.98
FCF Growth (1y) %	-5.65	-20.57
Gross Profit Growth (1y) %	12.93	32.55

Liquidity Ratios

Metric	Value	Industry
Asset Utilization Ratio	0.88	1.14
Cash Payout Ratio	0.00	0.05
Cash Ratio	0.27	0.38
Current Ratio	1.48	1.54
Debt to Equity Ratio	0.93	0.89
Interest Cover Ratio	3.50	80.17
Times Interest Earned	3.50	80.17

Profitability

Metric	Value	Industry
EBITDA Margin %	12.20	0.40
EBIT Margin %	6.62	-2.30
EBT Margin %	4.73	-4.58
Gross Margin %	31.10	20.40
Net Profit Margin %	2.00	-5.95

APi Group Corp (NYSE: APG)