The rise follows a series of strong results which highlight the growth opportunities in the sustainable water industry. Not only do emerging markets need to invest in water and wastewater solutions in order to support urbanization and industrialization, but developed countries also need to replace aging infrastructure.
In addition, Tetra Tech is benefiting from the increasing use of data analytics in water technology solutions — which adds a growth opportunity for Tetra Tech’s consultancy services. Incidentally, that’s also a key reason that a provider of advanced infrastructure analytics (AIA) solutions like Xylem is set to benefit in the coming years.
Turning back to Tetra Tech, the company’s momentum has been very good in 2019. During its fourth-quarter 2018 earnings call in November, it gave full-year fiscal 2019 guidance for revenue of $2.2 billion to $2.4 billion and adjusted EPS of $2.75 to $2.95; the company subsequently raised earnings guidance on two consecutive earnings calls.
Full-year revenue guidance was also hiked on the second-quarter earnings call in May. The new full-year revenue guidance stands at $2.3 billion to $2.4 billion, with adjusted EPS now expected to be $2.95 to $3.05.
The earnings momentum and record backlog of $2.81 billion give investors a lot of confidence. Indeed, analysts have already penciled in another year of double-digit earnings growth in 2020. Meanwhile, increasing environmental regulatory standards, and the adoption of data analytics and smart technologies in water resource management, are providing long-term growth opportunities.
Investors will be hoping Tetra Tech can continue the trends established in the first two quarters of 2019, while keeping an eye out for the upcoming hurricane season — Tetra Tech is a leading consultancy for disaster recovery and environmental response monitoring. Meanwhile, the company has a substantive backlog to execute on. All told, the company is well set for 2019 and beyond.