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    Is Stantec (TSX:STN) Undervalued Following Strong Q2 Results And Higher Margin Guidance?

    Simply Wall St·09/04/2026 10:24:42
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    Stantec (TSX:STN) is back in focus after reporting second quarter 2026 results that featured about 11.5% net revenue growth, record adjusted EBITDA margins near 18.7%, higher full year margin guidance, and a backlog around $9.2b.

    Despite the strong second quarter update, Stantec’s recent share price return has been weak, with the stock down 23.78% year to date and the 1 year total shareholder return also lower, even though the 3 and 5 year total shareholder returns remain positive.

    Compare Stantec’s momentum with a hand picked 14 high quality undervalued stocks that currently share a mix of positive growth metrics and weaker recent share price performance.

    Stantec’s share price has reset even as revenue, margins and backlog sit at strong levels. Does buying after a pullback offer a reasonable entry, or does it make more sense to wait for a cheaper valuation?

    Most Popular Narrative: 30% Undervalued

    The most followed narrative currently places Stantec’s fair value at about CA$143.91, compared with the recent close around CA$100.67. That gap rests on a detailed view of revenue growth, margins and long term infrastructure demand.

    Demand for infrastructure upgrades, water/wastewater treatment, energy transition, and climate adaptation projects remains exceptionally strong globally, with double-digit organic growth and a $7.9 billion backlog positioning the company for sustained revenue expansion in line with multi-decade trends toward urbanization and aging infrastructure.

    Read the complete narrative.

    Want to see what is baked into that CA$143.91 figure? The narrative leans on compounding revenue, improving profitability and a future earnings multiple that assumes investors keep paying up for this growth profile. It also considers which assumptions matter most and how sensitive the outcome is to small changes in growth or margins.

    The fair value view also relies on a specific discount rate of 8.49%, projected revenue expansion that outpaces the wider Canadian market, and profit margins stepping up from today’s levels over several years. Analysts behind this narrative build in rising returns on equity and a relatively tight range of expectations, which helps explain why the implied upside remains material even after the recent share price reset.

    Result: Fair Value of CA$143.91 (UNDERVALUED)

    Have a read of the narrative in full and understand what's behind the forecasts.

    However, there are still real pressure points for Stantec, including integration risk from recent acquisitions and its reliance on government infrastructure funding, which can shift with policy changes.

    Find out about the key risks to this Stantec narrative.

    Next Steps

    Given the mix of optimism and concern around Stantec, it makes sense to move quickly and look through both sides of the story yourself. To weigh up what those potential upsides and drawbacks really mean for your own investment style, start with the 5 key rewards and 1 important warning sign.

    Looking for more investment ideas beyond Stantec?

    Do not stop at Stantec alone. Broadening your watchlist with different types of opportunities can help you spot setups that better match your goals and risk comfort.

    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.