AI Stock Memo: TTEK - Tetra Tech - RankAlpha

TTEK

AI Memo

Tetra Tech

As of 2026-05-14/Confidence medium

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Data freshness

AI Memo

As of 2026-05-14 • Model: RankAlpha Sentiment Codex

Decision Panel

Action, confidence, horizon, and decision blockers at a glance.

Action

—

Confidence

medium

Horizon

—

Key catalyst

Q2 beat, backlog growth, and raised FY26 guidance • 2026-07-29

Expected move: +24%

Biggest risk

The thesis is still monitoring-style because visibility depends on converting funded backlog and winning follow-on task orders, while U.S. commercial was down 2% year over year due to weaker renewable-energy activity and some prior-period disaster/USAID work has rolled off.

Invalidation

Break below $24 or thesis failure.

What would change my mind?

Primary evidence supports a cautious positive view: raised FY26 guidance, sequential backlog growth, record first-half cash flow, and continued contract wins in water and defense suggest durable demand in Tetra Tech's preferred niches.

Research note

Recommendation

—

Confidence

medium

As of

2026-05-14

Base target

$35

p=50%

Bull target

$44

p=25%

Bear target

$24

p=25%

Key bullets

Fast scan of bull, bear, and watch items

BullKey bullets

Capital return and cash conversion reinforce downside support
Water and infrastructure award flow is supporting revenue visibility
Primary evidence supports a cautious positive view: raised FY26 guidance, sequential backlog growth, record first-half cash flow, and continued contract wins in water and defense suggest durable demand in Tetra Tech's preferred niches.

BearKey bullets

Backlog is funded and authorized, but management states backlog can still face delays, scope reductions, or termination for convenience, making it an uncertain indicator of future earnings.
[#10-K-2025-11-20]
Competitive government procurement and price-focused award criteria can pressure margins and reduce the win rate on recompetes.

WatchKey bullets

Q2 beat, backlog growth, and raised FY26 guidance

Summary

High-level snapshot

Recommendation

Model confidence

medium

Timeframe

Asset

Equity

Trigger

Base case: $35 (p=50%)

Bull/Bear spread: +54% / -15%

Vs latest close: Bull +54% · Base +24% · Bear -15%

Scenario probabilities

Bull Target: $44 (p=25%)Base Target: $35 (p=50%)Bear Target: $24 (p=25%)

Commentary

News flow since April 20, 2026 has been constructive and company-driven, centered on contract awards and the April 29, 2026 earnings/guidance raise. Immediate post-print reaction appears positive: third-party earnings coverage showed a positive after-hours move and a May 30, 2026? Wait date wrong. The reliable checked date is April 30, 2026, when MarketBeat showed a $32.32 close after the release, but the packet's anchor price on May 13, 2026 was $26.988, implying the initial earnings strength did not fully hold. Social coverage was not provided, so confidence should rest on filings and company releases rather than sentiment extrapolation.

As of 2026-05-14 • Updated bi-weekly / post-earningsSource: Internal modelMethodology

Analyst Summary

Thesis highlights from the latest analysis

Bull Case

Bear Case

Drivers

Scannable catalysts and supporting factors

Capital return and cash conversion reinforce downside support
Water and infrastructure award flow is supporting revenue visibility

Scenarios

Bull Target (Scenario probability)

$44 / p=25% prob

Base Target (Scenario probability)

$35 / p=50% prob

Bear Target (Scenario probability)

$24 / p=25% prob

Price $28 as of 2026-06-01

Nearest Scenario: Bear (∆ 15%)

Targets vs latest close: Bull +54% · Base +24% · Bear -15%

Sentiment & Exposure

News Sentiment (30d)

0.68

Social Sentiment (7d)

0.00

Events

Other notable items detected

EVENT2026-07-29
Q2 beat, backlog growth, and raised FY26 guidance
Tetra Tech reported fiscal Q2 2026 revenue of $1.22 billion, net revenue of $1.05 billion, adjusted EPS of $0.34, backlog of $4.28 billion up 8% sequentially, and raised FY26 guidance to $4.25-$4.40 billion of net revenue and $1.50-$1.58 of adjusted EPS; the 10-Q also shows backlog rising to $4.282 billion from $4.140 billion at FY25 year-end. [#IR-2026-04-29] [#10-Q-2026-05-01]
Prob 80.00% • Move 12.00% • Priced-in 55.00%

Short-term Catalysts

Next few weeks

Capital return and cash conversion reinforce downside support
2026-06-02
Q2 cash from operations was $165 million and first-half operating cash flow was $237.6 million; the board also approved a quarterly dividend of $0.072 per share, up 11% year over year, while the company repurchased $50 million in Q2 and had $498 million remaining under authorization. [#8-K-2026-04-29] [#IR-2026-04-29] [#10-Q-2026-05-01]
Prob 75% • Move 5% • Priced-in 65%

Long-term Catalysts

Months to a year

Water and infrastructure award flow is supporting revenue visibility
2026-10-01
Management tied Q2 momentum to demand in water, environment, sustainable infrastructure, and defense, while highlighting recent wins including USACE, U.S. Air Force, U.S. Navy, Northern Ireland Water, and the Netherlands framework; the Netherlands award alone carries up to a 6-year duration and expands Tetra Tech's position in wastewater and flood-defense modernization. [#IR-2026-04-29] [#IR-2026-04-23]
Prob 70% • Move 10% • Priced-in 45%

Risks

Backlog is funded and authorized, but management states backlog can still face delays, scope reductions, or termination for convenience, making it an uncertain indicator of future earnings. [#10-K-2025-11-20]
Competitive government procurement and price-focused award criteria can pressure margins and reduce the win rate on recompetes. [#10-K-2025-11-20]
U.S. commercial revenue was down 2% in Q2 because growth in energy and transmission services was offset by reduced renewable-energy activity, especially offshore wind. [#IR-2026-04-29]
U.S. federal, state, and local government agencies represented 46.1% of fiscal 2025 revenue, leaving Tetra Tech exposed to appropriations delays, shutdowns, and budget-priority changes. [#10-K-2025-11-20]

Peers

Symbol	Summary
AMTM	Amentum is the closest packet peer on government and technical services exposure, making it the most relevant loose comp for federal-program cadence and contract execution.
MSA	MSA Safety is more adjacent than direct, but its industrial-services valuation can help frame quality and margin durability for a mid-cap professional-services name.
PAYC	Paycom is not an operating peer; it is only a loose same-sector market-cap comp, which limits read-through for Tetra Tech's contract-driven backlog model.

Sources

Internal and external references used in this analysis

Model source: RankAlpha Sentiment Codex
Analysis date: 2026-05-14