Jacobs Solutions Inc.

Jacobs Solutions reported Q2 revenues of $2.42 billion, up 8.3% year on year, the fastest growth among the seven government and technical consulting stocks tracked, though full-year EPS guidance came in merely in line with analysts' estimates. SAIC posted the group's biggest estimate beat, with revenues of $1.88 billion up 6.3% year on year and 7.1% above consensus, alongside beats on EPS and full-year EPS guidance. Amentum was the weakest performer, reporting revenues of $3.49 billion, down 2% year on year and 2.2% short of expectations, with a significant EPS miss. Booz Allen Hamilton recorded revenues of $2.8 billion, down 4.2% year on year and 0.5% below expectations, but still beat on EPS, while UL Solutions reported revenues of $816 million, up 5.2% and in line with expectations, also beating on EPS. As a group, the seven stocks' revenues matched consensus and share prices have fallen 3% on average since the latest results.

Jacobs Solutions Inc. has been appointed by EnergyPathways plc to support the UK's MESH Energy Storage Project, strengthening its position in the energy-transition market. Jacobs will handle consenting, regulatory, and Development Consent Order processes, including environmental planning, technical coordination, stakeholder engagement, and grid-connection support, and will assist with EnergyPathways' submission to Ofgem's Long Duration Electricity Storage Cap & Floor scheme. The MESH project, a 300MW/55GWh development in the Irish Sea with onshore infrastructure at Barrow-in-Furness, is expected to become one of the UK's largest integrated energy-storage facilities, using compressed air energy storage, natural gas, and hydrogen to provide over 190 hours of ultra-long-duration storage, with operations targeted by 2031. This appointment builds on Jacobs' CAES expertise developed since 2023 and its experience with UK consenting processes. In the third quarter of fiscal 2026, Jacobs' Critical Infrastructure adjusted net revenues rose 9.4% year over year, and its backlog reached a record $28.9 billion, up 27.3%, though MESH is unlikely to materially impact near-term results due to regulatory and financing dependencies.

Jacobs Solutions reported fiscal third-quarter results on August 4, with gross revenue jumping 34.5% year over year to $4.1 billion and backlog swelling to a record $28.9 billion, prompting management to raise full-year guidance for the third straight quarter. The company's backlog growth was broad-based, with the Infrastructure & Advanced Facilities segment seeing gross revenue climb 39% and organic adjusted net revenue up 10%, driven by strength in data centers, semiconductors, energy, transportation, and water. Jacobs generated $456 million in cash from operations, funded $142 million in share buybacks during the quarter, and reduced net leverage below its year-end target. However, GAAP net earnings fell to $137.4 million from $181.2 million a year earlier, with earnings per share dropping to $1.16 from $1.56, due to a temporarily higher tax rate of 43.4% linked to the PA Consulting acquisition. While the trailing twelve-month book-to-bill ratio stood at 1.4x, the quarterly adjusted net revenue book-to-bill was 1.1x, below its 1.2x average, suggesting some cooling in core bookings growth.

Jacobs has been selected by the Central Utah Water Conservancy District to provide engineering services for the proposed Strawberry High Line Improvement Project, a critical water infrastructure program with an estimated $750 million construction value. The project will transform the historic Strawberry High Line Canal into a modern, pressurized water system by replacing the open-water canal with a buried pipeline, serving both agricultural users and growing urban communities across south Utah County and eastern Juab County. In a joint venture with Bowen Collins & Associates, Jacobs is expected to provide design and construction-phase support services, including new pipelines and a pump station, to support water delivery to a future population of approximately 420,000 people. The corridor would also be repurposed with an integrated regional trail, providing a recreational amenity and improving community connectivity.

Jacobs Solutions has been selected by Tilt Renewables as Owner's Engineer for the 288-megawatt Palmer Wind Farm near Adelaide, South Australia. The project will feature 407.2-megawatt wind turbine generators and connect to the grid at 275 kilovolts through two new substations and a transmission line to the existing Tungkillo switching station. Jacobs will provide delivery phase services including design and documentation review, construction monitoring, grid connection support, and site inspections. Construction is set to begin in 2026 with completion expected in 2028.

Jacobs Solutions stock presents a valuation divide, with a Discounted Cash Flow analysis indicating the shares are about 38.6% undervalued relative to an estimated intrinsic value of $202.91 per share, while a price-to-earnings comparison shows the stock trading at a premium. The DCF model uses a latest twelve-month free cash flow of approximately $451.5 million and assumes growing cash flows, supported by recent contract wins including a $1.7 billion role on the Wadsworth Center public health laboratory and large transport infrastructure projects. In contrast, Jacobs Solutions trades at about 35.9 times earnings, above the peer average of 28.4 times and a tailored fair P/E of 28.9 times, suggesting investors are already paying a higher price for the earnings profile. The stock has returned 27.7% over the past three years but declined 4.6% in the last year, and broader value checks yield a mixed score of 3 out of 6, leaving the key question of whether execution on complex projects will realize the DCF-implied upside or if market multiples correctly price the risks.

Jacobs Solutions has been awarded a contract by the Orange County Transportation Authority to provide construction management services for two major highway improvement projects in Orange County, California. One project focuses on upgrading State Route 91 by adding a new eastbound general-purpose lane, widening bridges, and reconstructing interchanges to improve traffic flow on a corridor that carries more than 300,000 vehicles daily. The other project involves improvements along Interstate 5 between I-405 and Yale Avenue, a segment with average daily traffic exceeding 275,000 vehicles, to enhance safety and reduce travel times. The company reported a record backlog of $27 billion in the second quarter of fiscal 2026, up 22% year over year, and raised its fiscal 2026 organic net revenue growth guidance to 8-10.5%. Shares of Jacobs inched up 1.8% following the news.

Jacobs has been selected by the Orange County Transportation Authority to provide construction management services for two major highway improvement projects in Orange County, California. The SR-91 Improvement Project between La Palma and SR-55 will add a new eastbound general-purpose lane, widen bridges and reconstruct interchanges to improve traffic operations on a corridor that carries more than 300,000 vehicles per day. The I-5 Improvement Project between I-405 and Yale Avenue will enhance safety and travel times on one of the busiest sections in Southern California, where average daily traffic exceeds 275,000 vehicles. Jacobs Executive Vice President Eva Wood noted that Los Angeles and Orange County drivers lose an average of 88 hours annually to traffic delays, and with population and employment expected to grow by more than 20% combined by 2045, the need for efficient infrastructure has never been greater.

Jacobs has been named as a supplier on the United Kingdom’s Government Commercial Agency’s construction professional services 2 framework, one of Europe’s largest public sector infrastructure frameworks. The four-year framework enables central government departments and a wide range of public sector organizations to procure services more efficiently, supporting the delivery of infrastructure and built environment programs that underpin economic growth and essential services.

Construction has begun on the New York State Department of Health’s new Wadsworth Center Public Health Laboratory in Albany, a $1.7 billion project where Jacobs is serving as technical advisor to the Dormitory Authority of the State of New York. The 663,000 gross-square-foot, five-story facility will consolidate multiple laboratory sites into a single modern campus, strengthening disease detection, outbreak response, environmental testing, and newborn screening programs. Jacobs is providing consulting and technical advisory services across architectural, engineering, and construction disciplines, working with the design-build joint venture of Gilbane Building Company and Turner Construction Company, in association with HOK. The Wadsworth Center is a national reference laboratory recognized by the Centers for Disease Control and Prevention, and construction is expected to be completed in 2030.

Rolls-Royce has signed trilateral Memorandums of Cooperation with the UK National Nuclear Laboratory and the Japan Atomic Energy Agency to accelerate high-temperature gas-cooled reactor designs and next-generation fuel. The company was also selected by Videberg Kraft, a partnership involving state-owned utility Vattenfall, to deliver three small modular reactors for Sweden's first new nuclear power plant in more than four decades. Separately, Jacobs was awarded a contract by Great British Energy – Nuclear to provide environmental baseline studies for future UK nuclear development at the Oldbury site in South Gloucestershire, working with subconsultants AtkinsRéalis and AECOM. These developments highlight how UK nuclear capabilities are converting policy support into revenue opportunities, with Rolls-Royce now holding contractual commitments across Europe and Jacobs leveraging over 60 years of nuclear lifecycle experience.

Government and technical consulting stocks reported mixed first-quarter results, with aggregate revenues in line with analyst estimates but share prices collectively declining 3.8% on average since reporting. ICF International posted revenues of $437.5 million, down 10.3% year on year and missing estimates by 2.5%, while UL Solutions led the group with revenues of $758 million, up 7.5% and beating expectations by 1.2%. Amentum reported flat revenues of $3.48 billion, in line with estimates, but missed EPS forecasts significantly. Jacobs Solutions grew revenues 8.8% to $2.33 billion, topping estimates by 2%, and Booz Allen Hamilton saw revenues fall 6.4% to $2.78 billion, missing estimates by 2.8%.