Overview ABM Industries is a facility services company providing janitorial, engineering and related workforce solutions, exhibiting conservative balance-sheet leverage alongside modest and variable profitability. Financial Strengths Revenue and Balance Sheet The company shows clear strengths in top-line resilience and balance-sheet conservatism: split-adjusted revenue per share growth is 0.1813 y
ABM Industries is a facility services company providing janitorial, engineering and related workforce solutions, exhibiting conservative balance-sheet leverage alongside modest and variable profitability.
The company shows clear strengths in top-line resilience and balance-sheet conservatism: split-adjusted revenue per share growth is 0.1813 year‑over‑year and the five‑year revenue-per-share CAGR is 0.0602, while trailing-quarter revenue readings cluster around $1.6B (most recent quarterly revenue $1.65B) (see EPS Diluted & Revenue per Share and Revenue & Net Income). Leverage metrics are modest — debt-to-equity is 0.0171 and net debt relative to owner earnings registers 0.0000 — and liquidity is adequate with a current ratio of 1.5201. Capital allocation has also shifted: investing cash flow outflows narrowed from −$740.0M (2021) to −$115.6M (2025), while operating cash flow (TTM) is reported at $243.3M (see Strategic Capital Allocation).
Material areas of concern include low profit margins and earnings volatility. Recent margin levels are thin: gross margin most recently 10.8%, operating margin 4.0% and net profit margin 1.8% (see Profit Margin Trends). Net income has shown meaningful swings — TTM net income fell from $251.3M (2023‑10‑31) to $162.4M (2025‑10‑31) before a partial rebound to $201.2M (2026‑01‑31) — and quarterly net income moved from $120.2M (2025‑10‑31) to $38.8M (2026‑01‑31). Diluted EPS followed a similar path, dropping from \$4.10 (2023‑10‑31) to \$2.65 (2025‑10‑31) then rising to \$3.28 (2026‑01‑31) (see Earnings Quality Analysis and EPS Diluted & Revenue per Share).
Key fundamental metrics to watch going forward are operating cash flow versus net income (most recent OCF TTM $243.3M, net income TTM \$201.2M), margin traction at the gross/operating/net levels (10.8% / 4.0% / 1.8%), the trajectory of diluted EPS and revenue-per-share growth (0.1813 year‑over‑year, 0.0602 five‑year CAGR), return on equity (latest 11.7%) and the trailing P/E (14.1327) for shifts in market valuation dynamics (see Revenue & EPS Growth, Return on Equity (ROE) and Price-to-Earnings (PE) Ratio Trend).
The foundation of business quality and long-term value creation
ABM INDUSTRIES INC /DE/ revenue entries in the provided history are largely clustered around $1.0B–$1.6B per quarter, with intermittent larger reported quarters above $2.0B (notable spikes at $2.82B on 2017-10-31, $2.45B on 2013-10-31, $2.15B on 2012-10-31 and $2.63B on 2010-10-31). The most recent revenue observation in the dataset is $1.65B for the quarter ended 2018-10-31.
Net income has been more variable across the series, with several positive quarters interrupted by losses (notably a -$136.8M loss on 2020-04-30 and -$13.7M on 2021-07-31). In the most recent sequence of quarters available, net income rose to $120.2M on 2025-10-31 before falling to $38.8M on 2026-01-31, indicating volatility in quarterly profitability over the latest reported periods.
Most recent quarterly revenue: $1.65B
Most recent quarterly net income: $38.8M
Why Growth Matters
Consistent revenue and earnings growth are the lifeblood of successful long-term investments. Companies that can grow their top line (revenue) and bottom line (net income) over many years demonstrate they have products or services customers value and are willing to pay for repeatedly.
Revenue Growth shows whether the company is expanding its market reach, gaining market share, or successfully launching new products.Net Income Growth demonstrates the company can convert that revenue into actual profits while managing costs effectively.
Look for steady, sustainable growth rather than erratic spikes. The best businesses compound earnings year after year, creating tremendous value for shareholders over time. Companies that can grow earnings faster than revenue are improving their profitability—a sign of operational excellence and competitive strength.
Year-over-year growth rates for revenue and earnings per share
Reading the Growth Rate Chart
This chart converts the absolute per-share figures into year-over-year percentage changes, making it easy to see whether growth is accelerating, decelerating, or reverting to trend — regardless of the company's absolute size.
Revenue per Share Growth (1-year, split-adjusted) measures how quickly the top line is expanding on a per-share basis. Sustained positive growth signals that the company continues to win customers and grow its addressable market.EPS Diluted Growth (1-year, split-adjusted) measures how quickly earnings are compounding for each shareholder. When EPS growth consistently outpaces revenue growth, operating leverage and margin expansion are at work.
Look for consistency, not just magnitude. A company that reliably grows EPS 10–15% per year is far more valuable than one that alternates between 50% spikes and deep contractions. Negative EPS growth during a period of positive revenue growth is a red flag — costs are rising faster than sales. Quarters where both lines converge near zero or go negative deserve close scrutiny.
How revenue converts to net income for the most recent annual period
Period Information
Report Type: Annual (10-K)
Period: Nov 2017 to Oct 2018
Analyzing long-term margin stability and competitive positioning
ABM INDUSTRIES INC /DE/ shows modest improvement in reported margins in the most recent quarter set. Gross margin increased to 10.8% in the period ending 2018-10-31, up from low-single-digit readings in earlier years. Operating margin likewise is positive in the latest observation at 4.0% for the same period, representing a recovery from a negative operating margin (-4.8%) reported for the period ending 2014-10-31. Net profit margin has been relatively stable in the older data, ranging about 1.5–1.8% across the 2010–2014 observations.
The dataset contains notable inflection points: unusually large gross and operating margin readings at period end 2013-10-31 (89.7% and 82.4%, respectively) and the subsequent negative operating margin in 2014-10-31. Putting weight on the most recent data, margins are positive and moderate in 2018. The most recent Gross Margin was 10.8%, the most recent Operating Margin was 4.0%, and the most recent Net Profit Margin was 1.8%.
Understanding Profit Margins
Between Nov 2017 and Oct 2018, Abm Industries Inc De converts every dollar of revenue through the following stages:
Sustainable competitive advantages reveal themselves through consistently superior profit margins over extended periods. Companies with durable economic moats maintain pricing power and operational efficiency that competitors struggle to match.
A sign of durable competitive advantage is earning sustained higher margins than competitors.Look for margins that remain stable or improve over time, especially during economic downturns. Declining margins may signal increasing competition, pricing pressure, or deteriorating business fundamentals.
Comparing reported earnings to actual cash generation
ABM INDUSTRIES INC /DE/'s trailing twelve-month net income shows recent volatility. Net income was $251.3M at 2023-10-31, declined to $162.4M by 2025-10-31, then increased to $201.2M at 2026-01-31, indicating a material drop followed by a partial recovery in the most recent quarter.
Operating cash flow (TTM) data in the chart is most recently reported at 2023-10-31, where it was $243.3M; earlier operating cash flow was higher at $320.9M in 2018-10-31 and lower at $120.7M in 2014-10-31. At the 2023-10-31 date net income ($251.3M) slightly exceeded operating cash flow ($243.3M). The most recent Net Income (TTM) was $201.2M and the most recent Operating Cash Flow (TTM) shown was $243.3M.
The Earnings vs. Cash Flow Gap
Reported earnings (Net Income) doesn't always reflect actual cash generation. Companies use accrual accounting, which recognizes revenue when earned and expenses when incurred—not when cash actually changes hands. This creates timing differences and opportunities for accounting discretion that can mask underlying business health.
Net Income (the "earnings" number) can be influenced by non-cash items like depreciation, stock-based compensation, and changes in accounting estimates.Operating Cash Flow, however, shows the actual cash the business generates from its core operations—a harder number to manipulate.
What to Look For
Key Insight: Companies with durable competitive advantages typically show operating cash flow that meets or exceeds net income over time, demonstrating they convert accounting profits into actual cash that can be returned to shareholders or reinvested in the business.
Measuring management's efficiency at generating profits from shareholder capital
ABM INDUSTRIES INC /DE/’s trailing twelve-month return on equity rose to 11.7% in the most recent quarter (period ending 2026-01-31), up from 9.1% in the prior reported quarter (2025-10-31). Earlier observed values show a higher pair of readings in 2023 and 2022 (14.0% and 13.4%, respectively), indicating a peak around late 2023 followed by a decline into 2025 and a partial rebound into early 2026.
Looking further back, ROE values in the early 2010s were lower (7.4%–9.3% across the 2010–2014 points shown). The current level of 11.7% sits below the 15%+ range often cited as a strong benchmark but above the low single-digit range seen earlier in the record. The most recent return on equity for ABM INDUSTRIES INC /DE/ was 11.7%.
The Gold Standard of Profitability
Return on Equity (ROE) is a powerful measure of how effectively a company's management is using the money shareholders have invested. Calculated by dividing Net Income by Shareholders' Equity, it reveals how much profit is generated for every dollar of equity capital.
A consistently high ROE (typically above 15-20%) is often the signature of a "quality" business with a durable competitive advantage. It indicates that the company can generate high returns on its own capital, which it can then reinvest at these high rates to compound value over time.
What to Look For:
How the company generates and deploys its cash
ABM INDUSTRIES INC /DE/ shows a clear reduction in investing cash outflows in the most recent periods while available operating cash flow readings are lower than an earlier peak. Investing cash flow (TTM) improved from a large outflow of $-740.0M (2021-10-31) to $-241.5M (2022-10-31), then to $-171.9M (2024-10-31) and most recently $-115.6M (2025-10-31). Operating cash flow (TTM) is reported at $243.3M for the period ending 2023-10-31, down from $320.9M in 2018.
Financing cash flow (TTM) shows notable inflection points: it was $-295.8M at 2018-10-31, turned positive to $235.5M at 2022-10-31, and moved to $-186.3M at 2023-10-31. The most recent observed values are: Operating Cash Flow (TTM) $243.3M (period end 2023-10-31); Investing Cash Flow (TTM) $-115.6M (period end 2025-10-31); Financing Cash Flow (TTM) $-186.3M (period end 2023-10-31).
Understanding Company Strategy
Capital allocation refers to how management decides to spend and invest the company's cash. Analyzing the three primary categories of cash flow reveals a company's true operational strategy:
What to look for: Is the company bootstrapping (funding growth solely from operating cash)? Are they borrowing to fund aggressive expansion or dividends? Or are they capital raising by issuing new shares, potentially diluting your ownership? A healthy, mature company typically generates strong operating cash, moderately invests in growth, and returns the surplus to shareholders through financing activities.
Net assets attributable to each share — the accounting floor of intrinsic value
Why Book Value per Share Matters
Book value per share is the net worth of the company — total assets minus total liabilities — divided by shares outstanding (split-adjusted). It represents the theoretical liquidation value per share if every asset were sold and every liability repaid at balance-sheet carrying values. It is the accounting foundation upon which much of equity valuation is built.
A steadily rising book value per share is one of the most reliable signals of compounding wealth creation. It means the company is retaining earnings and building net worth faster than it is returning capital or eroding it. Warren Buffett famously tracked Berkshire Hathaway's book value per share for decades as his primary measure of intrinsic value growth.
Context is essential. Asset-heavy businesses (banks, manufacturers, utilities) should be judged by book value more directly than asset-light businesses (software, consumer brands), where intangible assets like intellectual property and customer loyalty may far exceed their balance-sheet carrying values. A company trading at a large premium to book value is not necessarily overvalued — it may simply possess competitive advantages that accounting rules do not capture. Conversely, a declining book value per share — especially over multiple years — is a serious warning sign of capital destruction.
How much of the company is financed by debt versus shareholders' equity
Reading the Debt-to-Equity Ratio
The debt-to-equity (D/E) ratio compares total financial debt to shareholders' equity. A ratio of 1.0 means the company has borrowed one dollar for every dollar of equity; a ratio of 2.0 means it has borrowed twice as much as it owns. Financial leverage amplifies both returns and risk: in good times, debt turbocharges equity returns; in bad times, it accelerates losses and can threaten solvency.
Trends matter more than a single number. A rising D/E ratio can mean the company is taking on debt to fund growth — potentially value-creating if returns exceed the cost of capital. But it can also mean equity is being eroded through losses or that the business is borrowing simply to sustain operations. A falling D/E ratio generally reflects strengthening financial health: earnings are being retained, debt maturities are being paid down, or both.
Industry norms vary enormously. Capital-intensive sectors (utilities, real estate, financials) routinely carry high D/E ratios that would be alarming in, say, a technology company. Always compare against sector peers. As a rough rule of thumb, a D/E above 2× in a cyclical business warrants careful scrutiny of interest coverage and refinancing risk.
Short-term liquidity — can the company cover its near-term obligations?
Liquidity: Can the Business Pay Its Bills?
The current ratio is calculated as current assets divided by current liabilities. A ratio of 1.5 means the company has $1.50 of short-term assets — cash, receivables, inventory — for every $1.00 of obligations due within the next twelve months. It is the most direct measure of near-term financial resilience: can the business meet its obligations without needing to raise new capital or sell long-term assets at a discount?
A ratio above 1.0 is generally healthy, meaning current assets exceed current liabilities. A ratio consistently above 2.0 may indicate the company is holding excess cash or inventory that could be deployed more productively. A ratio below 1.0 is a warning sign — the company is relying on future cash generation or external financing to cover its near-term obligations, which is manageable in normal conditions but dangerous during a downturn.
Trends and context matter.A declining current ratio isn't always alarming — highly efficient businesses (e.g., large retailers with reliable daily cash flows) often run leaner balance sheets intentionally. Conversely, a rapidly rising current ratio can signal slowing sales causing inventory to build, or customers taking longer to pay. Always compare the trend against industry peers and cross-reference with the cash flow statement to assess whether the business is genuinely liquid or just holding non-cash current assets.
How much the market is paying for each dollar of company earnings
ABM INDUSTRIES INC /DE/'s trailing twelve-month price-to-earnings ratio declined in the most recent quarter after an earlier rise. The P/E moved down from 16.2x at the 2025-10-31 period end to 14.1x at the 2026-01-31 period end. Prior to that recovery, the ratio was 9.6x at 2023-10-31 and 11.8x at 2022-10-31.
Show higher peaks in the earlier part of the decade, including 23.1x at 2013-10-31, 19.0x at 2014-01-31, 21.5x at 2010-10-31, and 18.6x at 2012-10-31. The most recent P/E ratio was 14.1x.
What Is the PE Ratio?
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics in investing. It divides the current stock price by the company's earnings per share (EPS), revealing how much investors are willing to pay for each dollar of earnings. A high PE can signal that the market expects strong future growth, while a low PE may suggest undervaluation—or reflect genuine concerns about the company's prospects.
Context matters:PE ratios vary significantly across industries. High-growth technology companies routinely trade at PE ratios above 30x or 40x, while mature, low-growth sectors like utilities or financials often trade closer to 10–15x. Always compare a company's PE to its own history and its industry peers, not just an absolute number.
What to Look For:
Key Insight:The PE ratio is a snapshot of market sentiment and expectations. Tracking it over time alongside earnings trends reveals whether the market's valuation has expanded or contracted—and whether that change is justified by fundamentals.