Legence Corp. (LGN) vs Tetra Tech, Inc. (TTEK)

Legence Corp. and Tetra Tech, Inc. are both Engineering & Construction companies. Tetra Tech, Inc. is the larger, with a market value of $8.6B against $5.7B — 1.5× the size. Legence Corp. has negative trailing earnings, so its P/E is not meaningful; Tetra Tech, Inc. trades at 20.3×. Tetra Tech, Inc. has the higher net margin (8.60% vs −1.20%) and the higher return on invested capital (15.8% vs 1.07%). Across the 17 metrics below, Tetra Tech, Inc. leads on 11 and Legence Corp. on 6.

Valuation

Metric LGN TTEK Engineering & Construction median
P/E n/m 20.31 28.59
P/S 1.07 1.73 1.15
P/B 4.08 4.73 3.96
Price to free cash flow 12.34 15.97 25.24
EV/EBITDA 21.44 13.58 14.87
EV/Sales 1.26 1.89 1.42
Earnings yield (1.28%) 4.92% 2.47%
Free cash flow yield 8.10% 6.26% 1.91%

Profitability

Metric LGN TTEK Engineering & Construction median
Gross margin 18.74% 18.78% 18.76%
Operating margin 0.79% 12.07% 6.26%
Net margin (1.20%) 8.60% 2.23%
Free cash flow margin 8.64% 10.81% 1.83%
Return on equity (7.63%) 24.26% 7.90%
Return on assets (2.41%) 9.97% 0.87%
Return on invested capital 1.07% 15.78% 2.52%

Growth

Metric LGN TTEK Engineering & Construction median
Revenue growth (TTM) — (7.61%) 16.67%
EPS growth (last fiscal year) — (24.39%) —
Revenue growth, 5-year CAGR — 12.69% 11.76%
Net income growth, 5-year CAGR — 7.34% 0.00%

Health

Metric LGN TTEK Engineering & Construction median
Debt to equity 1.06 0.43 0.40
Current ratio 1.35 1.18 1.39
Net debt to EBITDA 2.93 1.00 0.38

Dividend

Metric LGN TTEK Engineering & Construction median
Dividend yield — 0.63% 0.65%
Payout ratio — 0.17 0.00

Size

Metric LGN TTEK Engineering & Construction median
Market cap 5.67b 8.61b 1.31b

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