On Sep 12, 2016 we issued an updated research report on premium technical services company, Jacobs Engineering Group Inc.JEC . The company is one of the leading providers of professional, technical and construction services to industrial, commercial and government clients. It boasts of a wide network generating a considerable number of employment opportunities around the world.
Scopes of Improvement
Greater degree of industrialization in contemporary economies has enhanced the extent of construction activities. This, in turn, has been raising the demand for Jacobs' services. The company also aims to improve its profitability with the help of strategic restructuring programs and cost-saving schemes.
Moreover, Jacobs, with its highly skilled workforce, tactically reduces operational costs through optimal utilization of resources. Also, of late, the company has been segregating its operating and reporting structure into four major business segments. This is being done in order to streamline operations more proficiently as well as nurture fresh growth opportunities in the near term.
Even so, Jacobs' consistent attempt to underpin its business on the back of record backlog levels and strategic service-diversification plans is also expected to aid in boosting its financial fundamentals in the quarters ahead.
Persistent weakness in the global energy sector and commodity prices has been weighing over Jacobs' aggregate revenues. Moreover, constant appreciation of the U.S. dollar with respect to other major currencies, such as Euro and Yen, continues to hamper the company's international trade.
Also, low-entry barriers in engineering, architectural, consulting and designing market segments have escalated threats of market rivalry for Jacobs. Poor competency or business inefficiencies in the long run might diminish the market share and profitability of Jacobs from such business fragments.
Stocks to Consider
Jacobs currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks within the industry include Willdan Group, Inc. WLDN , Boise Cascade Co. BCC and Comfort Systems USA Inc. FIX . All the three companies presently hold a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.