Q3 Industrial & Environmental Services Earnings Review: First Prize Goes to Tetra Tech (NASDAQ:TTEK)

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Tetra Tech (NASDAQ:TTEK) and the best and worst performers in the industrial & environmental services industry.

Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.

The 8 industrial & environmental services stocks we track reported a mixed Q3. As a group, revenues beat analysts’ consensus estimates by 1% while next quarter’s revenue guidance was in line.

In light of this news, share prices of the companies have held steady as they are up 1.6% on average since the latest earnings results.

Best Q3: Tetra Tech (NASDAQ:TTEK)

With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ:TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.

Tetra Tech reported revenues of $1.16 billion, up 1.6% year on year. This print exceeded analysts’ expectations by 10.7%. Overall, it was a strong quarter for the company with a beat of analysts’ EPS and revenue estimates.

Dan Batrack, Chairman and CEO, commented, “We finished fiscal 2025 with another strong quarter resulting in record net revenue, record operating income, and significant operating margin expansion. These all-time high results were driven by the continued strong demand for our differentiated high-end consulting services in resilient water management and digital water automation. Our strategy focused on essential water and environmental services has allowed us to successfully navigate the recent changes in U.S. federal government priorities as we achieved record financial performance for 2025.”

Tetra Tech achieved the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 3.7% since reporting and currently trades at $33.64.

Is now the time to buy Tetra Tech? Access our full analysis of the earnings results here, it’s free for active Edge members.

Driven Brands (NASDAQ:DRVN)

With approximately 5,000 locations across 49 U.S. states and 13 other countries, Driven Brands (NASDAQ:DRVN) operates a network of automotive service centers offering maintenance, car washes, paint, collision repair, and glass services across North America.

Driven Brands reported revenues of $484.3 million, down 3.6% year on year, falling short of analysts’ expectations by 9.9%. However, the business still had a strong quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ full-year EPS guidance estimates.

The market seems content with the results as the stock is up 1.7% since reporting. It currently trades at $14.50.

Is now the time to buy Driven Brands? Access our full analysis of the earnings results here, it’s free for active Edge members.

Weakest Q3: Vestis (NYSE:VSTS)

Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE:VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.

Vestis reported revenues of $686.2 million, flat year on year, exceeding analysts’ expectations by 2.1%. Still, it was a softer quarter as it posted a significant miss of analysts’ EPS estimates.

As expected, the stock is down 2.2% since the results and currently trades at $6.57.

Read our full analysis of Vestis’s results here.

ABM (NYSE:ABM)

With roots dating back to 1909 as a window washing company, ABM Industries (NYSE:ABM) provides integrated facility management, infrastructure, and mobility solutions across various sectors including commercial, manufacturing, education, and aviation.

ABM reported revenues of $2.30 billion, up 5.4% year on year. This result surpassed analysts’ expectations by 1%. More broadly, it was a slower quarter as it logged a significant miss of analysts’ EPS estimates and full-year EPS guidance in line with analysts’ estimates.

The stock is down 6.7% since reporting and currently trades at $42.68.

Read our full, actionable report on ABM here, it’s free for active Edge members.

Pitney Bowes (NYSE:PBI)

With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE:PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.

Pitney Bowes reported revenues of $459.7 million, down 8% year on year. This number missed analysts’ expectations by 1.7%. Overall, it was a slower quarter as it also produced a miss of analysts’ revenue estimates and EPS in line with analysts’ estimates.

Pitney Bowes achieved the highest full-year guidance raise but had the slowest revenue growth among its peers. The stock is down 7.8% since reporting and currently trades at $10.34.

Read our full, actionable report on Pitney Bowes here, it’s free for active Edge members.

Market Update

As a result of the Fed’s rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed’s 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump’s victory in the U.S. Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain, leaving much uncertainty around 2025.

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