APi Group (APG, Financial) saw its stock price surge by 5% after the company announced its entry into the S&P MidCap 400 index. This development marks a significant milestone for APG, as inclusion in this index is often seen as a recognition of a company's growth and market stability. The news was part of a broader market movement where several stocks experienced notable changes. While some companies like GMS Inc. experienced substantial gains due to acquisition offers, others, such as Smith & Wesson Brands, faced declines following earnings reports.
The market environment remains cautious as investors continue to absorb the Federal Reserve's latest policy updates. The Fed's ongoing outlook involves adjustments in growth predictions alongside slight increases in both inflation and unemployment forecasts. While the future economic climate remains somewhat uncertain, the inclusion in the S&P MidCap 400 adds a positive note for APi Group, potentially enhancing investor confidence in the stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 9 analysts, the average target price for APi Group Corp (APG, Financial) is $52.78 with a high estimate of $55.00 and a low estimate of $47.00. The average target implies an upside of 7.82% from the current price of $48.95. More detailed estimate data can be found on the APi Group Corp (APG) Forecast page.
Based on the consensus recommendation from 10 brokerage firms, APi Group Corp's (APG, Financial) average brokerage recommendation is currently 1.7, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for APi Group Corp (APG, Financial) in one year is $31.59, suggesting a downside of 35.46% from the current price of $48.95. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the APi Group Corp (APG) Summary page.
APG Key Business Developments
Release Date: May 01, 2025
- Revenue: Increased 7.4% to $1.72 billion compared to $1.6 billion in the prior year period.
- Organic Growth: Approximately 2% driven by pricing improvements and strong growth in safety services.
- Adjusted Gross Margin: 31.7%, a 100 basis point increase compared to the prior year period.
- Adjusted EBITDA: Increased by 10.3% with a margin of 11.2%, a 30 basis point increase compared to the prior year period.
- Adjusted Diluted Earnings Per Share: $0.37, an 8.8% increase compared to the prior year period.
- Safety Services Revenue: Increased by 13.4% to $1.27 billion with 5.6% organic growth.
- Specialty Services Revenue: Decreased by 6.8% to $453 million with a 6.6% organic decline.
- Adjusted Free Cash Flow: $86 million, a $74 million improvement compared to the first quarter of 2024.
- Net Leverage Ratio: Approximately 2.3 times, below the long-term target of 2.5.
- Share Repurchase: $75 million or 2.1 million shares repurchased in the first quarter.
- Full Year Revenue Guidance: Increased to $7.4 billion to $7.6 billion, representing 2% to 5% organic growth.
- Full Year Adjusted EBITDA Guidance: Increased to $985 million to $1.035 billion, representing over 10% growth.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- APi Group Corp (APG, Financial) reported a 7.4% increase in revenues for Q1 2025, reaching $1.72 billion, driven by pricing improvements and strong growth in safety services.
- The company achieved a 100 basis point increase in adjusted gross margin, reaching 31.7%, due to disciplined customer and project selection and value capture initiatives.
- APi Group Corp (APG) saw a 10.3% increase in adjusted EBITDA, with a margin of 11.2%, reflecting successful margin expansion strategies.
- The safety services segment experienced a 13.4% revenue increase, with organic growth of 5.6%, driven by double-digit inspection revenue growth in North America.
- APi Group Corp (APG) announced a new $1 billion share repurchase program, demonstrating strong free cash flow generation and balance sheet strength.
Negative Points
- The specialty services segment reported a 6.8% decrease in revenues, impacted by adverse weather conditions and lower fixed cost absorption.
- Despite overall growth, the adjusted gross margin for the specialty services segment decreased by 150 basis points due to lower net revenues.
- APi Group Corp (APG) faces potential impacts from tariffs, particularly in the project revenues and US life safety sectors, which could affect material costs.
- The company anticipates a modest decline in specialty services margins for the full year, with a return to accretive margins expected in 2026.
- APi Group Corp (APG) is managing risks associated with the rural broadband program, which is described as 'choppy' and could impact revenue forecasts.
