One-glance verdict
Undervalued
$42.35 our estimate vs market $29.18
Wall Street consensus: $40.83 (-3.6% lower than our fair-value estimate)
31% below our estimate, below the bear case
Fundamentals snapshot
Tetra Tech, Inc.
TTEK · NMS · Industrials · Engineering & Construction
Current price
$29.18
52-week range
$25.81 - $43.14
Market cap
$7.57B
Balance sheet
Watch
14.85x Strong cushion
Net debt $886.12M. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
2 Risks
3 rewards · 2 risks
- Reward Returns 25.6% on equity, ahead of 50% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Risk Net debt grew 195.1% over 3 years.
- Risk Insider ownership is only 0.5% (peer median: 0.5%).
What this company does
Tetra Tech, Inc.
Tetra Tech is a consulting and engineering company that helps governments and businesses manage projects related to water and the environment. The company earns most of its revenue (money from sales) by advising on large-scale efforts like water management, environmental cleanup, and designing sustainable infrastructure. This matters because growing global concerns about climate change and water scarcity create steady demand for their expert services.
How the company got here
Tetra Tech was founded in 1966 by a group of engineers focused on projects related to waterways, harbors, and coastal areas. Over the years, it expanded its services, partly by acquiring other specialized firms, moving into environmental cleanup, infrastructure, and international development. A key shift happened in the 1980s when the company moved away from oil and gas exploration to focus more on environmental services and data systems. After becoming an independent, publicly traded company again in the early 1990s, it used the funds raised to buy more companies, significantly growing its expertise and size. Today, it has become a large global firm known for its work in water, environment, and sustainable infrastructure.
What it actually does
Tetra Tech is a consulting and engineering firm that provides expert advice and design services for complex problems involving water, the environment, and infrastructure. Think of them as the scientific and engineering experts that governments and large companies hire to solve big challenges, like designing a new water treatment plant, cleaning up a contaminated site, or planning for the impacts of climate change. They don't typically do the physical construction themselves but provide the critical planning, design, and management to make these projects happen. Their work ranges from ensuring clean drinking water and managing flood risks to designing sustainable buildings and helping communities recover from disasters.
Government Services Group (GSG)
This part of the company works primarily with government clients at all levels, from local city councils to federal agencies in the U.S. and development agencies around the world. They provide services like analyzing water resources, monitoring the environment, managing waste, and designing resilient public infrastructure such as roads and government facilities. For example, a U.S. federal agency might hire the GSG to study the environmental impact of a new project or to help clean up a former military base. This segment represents a very large portion of the company's business, making up nearly half of its revenue.
Commercial/International Services Group (CIG)
The CIG segment provides similar consulting and engineering services to private companies and international clients, which can include both businesses and foreign governments. Their projects often focus on the needs of industries like natural resources, energy, and utilities, as well as planning and designing sustainable infrastructure for commercial developments. For instance, a private energy company might hire them to help design a wind farm, or an international client might need their expertise in building a new port. This is the slightly larger of the two business segments, accounting for just over half of the company's total revenue.
What management is betting on now
Tetra Tech's leadership is focused on growing by tackling major global issues like water scarcity and climate change. They are investing in high-demand areas such as treating emerging water contaminants (unregulated chemicals that are being studied for their health effects) and helping coastal areas become more resilient to storms and sea-level rise. The company is also expanding its use of data analytics and digital tools to provide smarter, more efficient solutions for its clients, which can also lead to higher margins (the portion of revenue the company keeps as profit). A key part of their strategy involves making strategic acquisitions of other companies to gain new technologies and expand their presence in key markets, particularly in renewable energy and digital water management.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$137.07M
FY2024 Q4
$98.79M
FY2025 Q1
$9.63M
FY2025 Q2
$-11.76M
FY2025 Q3
$345.57M
FY2025 Q4
$95.61M
FY2026 Q1
$68.11M
FY2026 Q2
$159.35M
Revenue
$1.22B
Net income
—
Diluted EPS
0.36
Operating cash flow
$165.34M
Free cash flow
$159.35M
Fetching…
Sources
Revenue
$1.21B
Net income
—
Diluted EPS
0.40
Operating cash flow
$72.27M
Free cash flow
$68.11M
Fetching…
Sources
Revenue
$1.33B
Net income
—
Diluted EPS
0.48
Operating cash flow
$100.85M
Free cash flow
$95.61M
Fetching…
Sources
Revenue
$1.37B
Net income
$113.84M
Diluted EPS
0.43
Operating cash flow
$349.60M
Free cash flow
$345.57M
Fetching…
Sources
Revenue
$1.32B
Net income
$5.39M
Diluted EPS
0.02
Operating cash flow
$-5.82M
Free cash flow
$-11.76M
Fetching…
Sources
Revenue
$1.42B
Net income
—
Diluted EPS
0.00
Operating cash flow
$13.06M
Free cash flow
$9.63M
Fetching…
Sources
Revenue
$1.37B
Net income
—
Diluted EPS
0.35
Operating cash flow
$105.60M
Free cash flow
$98.79M
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Sources
Revenue
$1.34B
Net income
$85.81M
Diluted EPS
1.59
Operating cash flow
$140.93M
Free cash flow
$137.07M
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Sources
Is it cheap or expensive?
Fair value $42.35 vs current price $29.18
Wall Street consensus is the average analyst price target: $40.83 (-3.6% lower than our fair-value estimate).
Our most-likely fair value is $42.35 a share — about 45.1% above today's price of $29.18, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Watch
Net debt $886.1M. Interest coverage 14.9x.
Net debt
$886.12M
Interest coverage
14.85x
Tetra Tech, Inc.'s profit covers its interest bill about 14.9 times over. which is stronger than every peer shown here.
Watch
Worse cushion
Baseline
Better cushion
TTEK
BASELINE
Tetra Tech, Inc.
Total debt $1.11B Interest coverage 14.85x This is the baseline the peer rows are being compared against.
Total debt $3.35B Interest coverage 5.75x -61% vs TTEK Carries about 2.6x less debt cushion than TTEK.
Total debt $1.82B Interest coverage 6.25x -58% vs TTEK Carries about 2.4x less debt cushion than TTEK.
Total debt $4.56B Interest coverage 5.92x -60% vs TTEK Carries about 2.5x less debt cushion than TTEK.
Total debt $1.69B Interest coverage 8.10x -45% vs TTEK Carries about 1.8x less debt cushion than TTEK.
What you should know
The case for and against TTEK
3 Rewards
2 Risks
Rewards
-
Returns 25.6% on equity, ahead of 50% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Trades at 17.5x P/E vs peer median 22.4x (22.0% cheaper).
Risks
-
Net debt grew 195.1% over 3 years.
-
Insider ownership is only 0.5% (peer median: 0.5%).
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
17.47x
Forward P/E
17.01x
P/B
4.06x
P/S
1.72x
EV/EBITDA
12.81x
PEG ratio
2.10x
Profitability
How much profit each dollar creates
Gross margin
21.8%
Operating margin
12.5%
Net margin
10.0%
ROE
25.6%
ROA
8.8%
Health
Liquidity and balance-sheet strength
Debt / equity
0.60x
Current ratio
1.25x
Quick ratio
1.15x
Total debt
$1.11B
Total cash
$223.61M
Growth
How the business has been compounding
Revenue TTM
$5.13B
Revenue 5Y CAGR
14.1%
EPS TTM
1.67
EPS 5Y CAGR
-1.5%
Cash flow
How much cash the business throws off
Operating CF TTM
$688.06M
Free CF TTM
$439.05M
FCF margin
8.6%
Dividend
Shareholder payout
Yield
1.0%
Payout ratio
15.6%
Last ex-div date
2026-05-14