• If you are wondering whether ABM Industries at around US$47.12 is offering good value today, it helps to step back from the headline share price and look at what the underlying numbers are suggesting.
• The stock has returned 2.9% over the last 7 days and 7.6% over the last month, with year to date returns of 10.4%. However, the 1 year return of a 9.7% decline sits alongside gains of 8.3% over 3 years and 27.6% over 5 years.
• These mixed returns sit against a backdrop of ongoing interest in ABM Industries as a facilities services provider, including regular coverage as part of broader sector discussions and company specific updates that keep the stock on investors' radars. That context matters because it can influence how the market is thinking about risk, growth potential and what counts as a fair price for the shares.
• Right now ABM Industries scores 5 out of 6 on our valuation checks, as shown in our valuation scorecard. Next we will compare several valuation approaches and then finish by looking at a more holistic way to think about what this stock might be worth.

Approach 1: ABM Industries Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model estimates what a business might be worth by projecting its future cash flows and then discounting those back to today’s dollars. It is essentially asking what tomorrow’s cash is worth to you right now.

For ABM Industries, the model used is a 2 Stage Free Cash Flow to Equity approach. The latest twelve month free cash flow is about $168.0 million. Analysts provide cash flow estimates out to 2027, including $244.1 million for 2026 and $302.7 million for 2027. Beyond that, Simply Wall St extrapolates further, with total ten year projections running out to 2035, all still in the millions of dollars.

When those projected cash flows are discounted back and combined with an estimate of value beyond year ten, the model arrives at an intrinsic value of about $143.73 per share. Compared with the current share price of around $47.12, the DCF output suggests ABM Industries is trading at a 67.2% discount, which indicates the shares may be significantly undervalued on this method alone.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests ABM Industries is undervalued by 67.2%. Track this in your watchlist or portfolio, or discover 54 more high quality undervalued stocks.

Approach 2: ABM Industries Price vs Earnings (P/E)

For a profitable company like ABM Industries, the P/E ratio is a useful way to relate what you pay for each share to the earnings the business is currently generating. It gives you a quick sense of how much the market is willing to pay for each dollar of profit.

What counts as a reasonable P/E depends on what investors expect for future growth and how risky those earnings are perceived to be. Higher expected growth or lower perceived risk can justify a higher P/E, while lower growth or higher risk usually points to a lower P/E.

ABM Industries currently trades on a P/E of 17.46x. That sits below the Commercial Services industry average of 26.15x and well below the peer group average of 60.59x. Simply Wall St also calculates a “Fair Ratio” of 24.83x, which is the P/E level suggested by factors such as ABM Industries earnings growth profile, industry, profit margins, market cap and specific risks.

This Fair Ratio can be more informative than a simple industry or peer comparison because it adjusts for the company’s own characteristics rather than assuming all firms deserve the same multiple. With the current P/E of 17.46x sitting below the Fair Ratio of 24.83x, this approach points to the shares looking undervalued on earnings.

Result: UNDERVALUED

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Upgrade Your Decision Making: Choose your ABM Industries Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let us introduce you to Narratives, which connect your view of a company with the numbers you see on screen.

A Narrative is simply your story about ABM Industries, written into a set of assumptions such as your fair value, and your expectations for future revenue, earnings and margins.

On Simply Wall St, Narratives live in the Community page and turn that story into a financial forecast, then into a fair value that you can compare with today’s share price to help you decide whether ABM Industries looks expensive or cheap to you.

Because Narratives update automatically when new information such as news or earnings is added, you can keep your view current without rebuilding your work each time.

For example, one ABM Industries Narrative might see a much higher fair value based on stronger margin expectations, while another sets a lower fair value based on more cautious revenue assumptions. This shows how two investors can reasonably disagree yet still stay grounded in clear numbers.

Do you think there's more to the story for ABM Industries? Head over to our Community to see what others are saying!

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.