Tetra Tech (TTEK) Shares Skyrocket, What You Need To Know

What Happened?

Shares of environmental engineering firm Tetra Tech (NASDAQ:TTEK) jumped 16.2% in the afternoon session after the company reported third-quarter results that significantly beat Wall Street's expectations for both revenue and profit. 

The company reported revenue of $1.23 billion, which was 17.3% higher than the $1.05 billion analysts had estimated. Its earnings per share of $0.48 also came in 18.5% above the consensus forecast. Looking ahead, while Tetra Tech's revenue forecast for the next quarter was largely in line with expectations, its guidance for the upcoming fiscal year's earnings was a significant positive. The company projected earnings of $1.48 per share at the midpoint, beating analyst estimates. This strong forward-looking profitability appears to have overshadowed any near-term concerns, driving a wave of buying from investors.

Is now the time to buy Tetra Tech? Access our full analysis report here.

What Is The Market Telling Us

Tetra Tech’s shares are not very volatile and have only had 6 moves greater than 5% over the last year. Moves this big are rare for Tetra Tech and indicate this news significantly impacted the market’s perception of the business.

The biggest move we wrote about over the last year was about 2 months ago when the stock dropped 2.2% on the news that an analyst note from KeyBanc highlighted investor concerns regarding the company's growth strategy after the collapse of its USAID business. 

Although KeyBanc reiterated its positive "Overweight" rating, details from recent meetings with company executives seemed to trouble the market. Discussions centered on how the environmental and engineering consulting firm planned to find new growth avenues to compensate for the significant gap left by the USAID business. Adding to the concerns, KeyBanc also adjusted its estimates for the company lower. This development appeared to overshadow Tetra Tech's recent strong third-quarter earnings report, in which it had surpassed expectations for both revenue and profit. The stock's decline suggested that investors focused more on the future challenge of replacing this lost business than on the company's past performance.

Tetra Tech is down 5.9% since the beginning of the year, and at $37.52 per share, it is trading 20.8% below its 52-week high of $47.35 from November 2024. Investors who bought $1,000 worth of Tetra Tech’s shares 5 years ago would now be looking at an investment worth $1,602.

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