Our $47 target price is based on a ~14x EV/EBITDA multiple applied to our 2026 adj. EBITDA estimate of ~$1,108mn. We think the stock should trade at a premium to the current multiple of ~10x given relatively resilient end markets (a cyclical recurring revenue model), potential margin expansion opportunities, relatively solid free cash flow characteristics vs. peers, and potential value-accretive M&A.

Risks that could mean the shares fail to achieve our target price include near-term headwind as revenue/utilization for APG’s services are potentially held down by global economic uncertainty, which could result in near-term volatility. Moreover, despite a historical project loss rate of only ~1.5%, future projects, especially those in Specialty Services, could lead to project losses and lumpy earnings. In the long-run, we think potential sizable M&A in new adjacencies could also pose execution/integration risk.