As the Q2 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the government & technical consulting industry, including Amentum (NYSE:AMTM) and its peers.
The sector has historically benefitted from steady government spending on defense, infrastructure, and regulatory compliance, providing firms long-term contract stability. However, the Trump administration is showing more willingness than previous administrations to upend government spending and bloat. Whether or not defense budgets get cut, the rising demand for cybersecurity, AI-driven defense solutions, and sustainability consulting should benefit the sector for years, as agencies and enterprises seek expertise in navigating complex technology and regulations. Additionally, industrial automation and digital engineering are driving efficiency gains in infrastructure and technical consulting projects, which could help profit margins.
The 7 government & technical consulting stocks we track reported a mixed Q2. As a group, revenues were in line with analysts’ consensus estimates.
In light of this news, share prices of the companies have held steady. On average, they are relatively unchanged since the latest earnings results.
Weakest Q2: Amentum (NYSE:AMTM)
With operations spanning approximately 80 countries and a workforce of specialized engineers and technical experts, Amentum Holdings (NYSE:AMTM) provides advanced engineering and technology solutions to U.S. government agencies, allied governments, and commercial enterprises across defense, energy, and space sectors.
Amentum reported revenues of $3.56 billion, up 2% year on year. This print exceeded analysts’ expectations by 1.5%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts’ EPS estimates.
“Amentum’s third quarter performance reflects strong execution and demonstrates the continued strength of our business,” said Amentum Chief Executive Officer John Heller.
Amentum achieved the highest full-year guidance raise of the whole group. Still, the market seems discontent with the results. The stock is down 18.3% since reporting and currently trades at $22.95.
Read our full report on Amentum here, it’s free.
Best Q2: Maximus (NYSE:MMS)
With nearly 50 years of experience translating public policy into operational programs that serve millions of citizens, Maximus (NYSE:MMS) provides operational services, clinical assessments, and technology solutions to government agencies in the U.S. and internationally.
Maximus reported revenues of $1.35 billion, up 2.5% year on year, outperforming analysts’ expectations by 2.5%. The business had an exceptional quarter with a beat of analysts’ EPS estimates and a solid beat of analysts’ full-year EPS guidance estimates.
Maximus pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 18.3% since reporting. It currently trades at $88.48.
Is now the time to buy Maximus? Access our full analysis of the earnings results here, it’s free.
UL Solutions (NYSE:ULS)
Founded in 1894 as a response to the growing dangers of electricity in American homes and businesses, UL Solutions (NYSE:ULS) provides testing, inspection, and certification services that help companies ensure their products meet safety, security, and sustainability standards.
UL Solutions reported revenues of $776 million, up 6.3% year on year, exceeding analysts’ expectations by 0.6%. Still, it was a slower quarter as it posted EPS in line with analysts’ estimates.
As expected, the stock is down 7.7% since the results and currently trades at $67.46.
Read our full analysis of UL Solutions’s results here.
Jacobs Solutions (NYSE:J)
With a workforce of approximately 45,000 professionals tackling complex challenges from water scarcity to cybersecurity, Jacobs Solutions (NYSE:J) provides engineering, consulting, and technical services focused on infrastructure, sustainability, and advanced technology solutions.
Jacobs Solutions reported revenues of $3.03 billion, up 5.1% year on year. This result missed analysts’ expectations by 0.9%. More broadly, it was actually a satisfactory quarter as it logged a solid beat of analysts’ backlog estimates.
The stock is up 5.2% since reporting and currently trades at $147.30.
Read our full, actionable report on Jacobs Solutions here, it’s free.
SAIC (NASDAQ:SAIC)
With over five decades of experience supporting national security missions, Science Applications International Corporation (NASDAQ:SAIC) provides technical, engineering, and enterprise IT services primarily to U.S. government agencies and military branches.
SAIC reported revenues of $1.77 billion, down 2.7% year on year. This print lagged analysts' expectations by 5.1%. More broadly, it was a mixed quarter as it also produced a beat of analysts’ EPS estimates but full-year revenue guidance missing analysts’ expectations significantly.
SAIC had the weakest performance against analyst estimates and weakest full-year guidance update among its peers. The stock is down 10.5% since reporting and currently trades at $102.
Read our full, actionable report on SAIC here, it’s free.
Market Update
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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