APi Group Corporation (APG): what the price assumes

In the published model solve dated 2026-Q2, anchored at $39.69, APi Group Corporation (APG) is priced for today's economics sustained for ~7.5 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-08-30 · Source: https://boothcheck.com/report/APG

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 8: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.6% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: elevated (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.7%); the inversion above states its own rate.

Per-Model Detail (n=11)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Life Safety is 69% of revenue and its durability comes from law rather than from salesmanship: "Inspections are often required by legislation or insurance mandates, providing a strong recurring revenue stream."
• The demand on the price is severe: at $39.58 the market pays about 40 times company-wide operating profit, and the multiple sits at the very top of its peer distribution, beyond the upper quartile.
• Second-quarter results are due before the market opens on July 30, 2026, with management having guided the quarter to net revenues of $2.175 billion to $2.225 billion.

Bull Case

Every acquisition this company makes is buying the same asset, and it is not a building or a truck fleet. On February 2, 2026, "the Company completed the acquisition of CertaSite, LLC, an inspection-first provider of fire and life safety services." The phrase to notice is inspection-first, because it describes the entire commercial logic of the business. The 10-K explains it without embellishment: "Our go-to-market strategy in life safety is inspection-first, because we estimate that every dollar sold can lead to subsequent service work." APi buys inspection routes, and what it is really buying is the right to be standing in the building when something needs fixing.

The reason that right is durable has nothing to do with customer loyalty. "Inspections are often required by legislation or insurance mandates, providing a strong recurring revenue stream." A sprinkler system gets inspected on a schedule set by a fire code and an insurer, not by a facilities manager weighing this year's budget. That is why Life Safety at 69% of revenue behaves differently from the construction work that surrounds it in the same income statement, and why the company can talk about organic growth in a year when its customers are cautious.

The recent numbers show the machine running. First-quarter 2026 net revenues came in at a record $1.982 billion, up 15.3% with 10.4% of that organic, and reported net income of $57 million rose 62.9%. Safety Services carried $1.42 billion of that revenue, up 11.7%. Management raised its full-year outlook alongside those numbers, and the habit is well established: since 2020 the guidance ledger runs 13 raises and 4 reaffirmations.

Where this could go is visible in the cohort. Rollins (ROL) earns an operating margin of 19.0% and ADT (ADT) 25.6%, both businesses built on the same underlying economics, which is dense recurring routes serviced by technicians who are already nearby. APi runs at 6.3% today. The bull thesis is not that those margins arrive next year. It is that the mix is moving toward the part of the business that produces them, one inspection route at a time, and that the acquisitions are the mechanism rather than a distraction from it.

That is also why the standard lenses disagree so violently with the price here. Only the cash-flow methods reach today's quote; everything built on trailing profit or book value lands far under it. Those static frames read a 6.3% operating margin and a contractor's balance sheet. They cannot see a legally mandated inspection base that renews whether or not anyone signs anything, and on this specific business that blindness is the whole argument.

Bear Case

Look at what the neighbours are doing before looking at this company at all. Quanta Services (PWR) grew revenue 21.1% over the trailing year, MasTec (MTZ) 22.6%, Sterling Infrastructure (STRL) 37.0%, Primoris (PRIM) 13.4%, MYR Group (MYRG) 13.1%. When an entire cohort of contractors posts numbers like that at the same time, the explanation is rarely that they all became well managed at once. It is a demand cycle running hot, and APi's Specialty Services revenue rose 25.6% in the first quarter of 2026 with 24.8% of it organic. That is the same wave. Cycles have a shape, and this one is nearer its top than its bottom.

The earnings that wave produces are thin, which matters because of what they are being multiplied by. Operating profit over the trailing year was $493 million and net income $324 million, on a trailing operating margin of 6.3%. That is what is being bought at roughly 40 times operating profit, a multiple sitting at the very top of its peer distribution, well past the upper quartile. For the quote to make sense, today's economics have to persist for about 9.9 years. Among companies that reached that level, only about 14% held it that long.

The valuation lenses say the same thing in a different language. Approaches built on asset value land about 4.9 times under the quote, those built on earnings power about 4.3 times under, and peer multiples about 1.7 times under. Only the forward cash-flow methods reach the price, and they get there by holding the current EBITDA multiple steady all the way to the exit year. That is not an independent confirmation of the price. That is the price being used as its own evidence.

The capital structure has been financing the story rather than just supporting it. Net debt of $2.1 billion sits at about 4.3 times operating profit, and operating profit covers the interest bill only 3.5 times over, which is thin for a business with construction exposure. Meanwhile the share count has grown roughly 17% a year over the four years to March 2026, and the filing shows one of the reasons: "During 2024, we issued 18,975,000 shares of Company common stock in a public underwritten offering." Growth acquired with newly printed shares is growth the existing holder is partly buying from themselves.

And the operating leverage cuts both ways when the awards slow. The 10-K is direct about the mechanism: "We could incur significant costs and reduced profitability from underutilization of our workforce if we do not receive future contract awards, if contract awards are delayed". A meaningful part of the work also depends on public spending, where the filing warns what happens "In the event the budgets or budgetary priorities of the U.S. federal government entities with which we do business are delayed, decreased or underfunded". Neither risk is exotic. Both are the ordinary way a contracting cycle ends, and neither is visible in a multiple of 40.

Valuation

The bet here is about duration rather than about a rate. At $39.58 the market pays about 40 times company-wide operating profit, and that multiple requires today's economics to hold for roughly 9.9 years. Two reference points make that demanding. Only about 14% of companies operating at that level sustained it that long, and the multiple itself sits at the very top of this peer distribution, beyond the upper quartile rather than merely above the median. The read comes out high, which is a statement about how seldom the requirement has been met, not a forecast.

The disagreement among the methods is unusually wide, and its shape is the informative part. Approaches built on asset value land about 4.9 times below the price; approaches built on earnings power about 4.3 times below; peer multiples about 1.7 times below. Only the forward cash-flow methods reach today's level. When exactly one family reaches the price and it is the one that credits future expansion, what is being paid for is durability that the static frames structurally cannot price. That is the premium, and naming it is more honest than averaging it away.

What has to prove durable is a specific mix. Life Safety is 69% of revenue, Specialty Contracting 14%, Infrastructure and Utility 13%, Fabrication and Distribution 4%. The first of those is the piece with the annuity characteristics, described in the 10-K as revenue where "Inspections are often required by legislation or insurance mandates". The rest is project work, and project work does not renew by statute. A reader deciding what to believe about the multiple is really deciding how much of the company will look like the first bucket in a decade.

The balance sheet neither rescues nor ruins the case, but it removes slack. Net debt of $2.1 billion is about 4.3 times operating profit, gross borrowings are $2.774 billion against $645 million of liquid assets, and operating profit covers interest 3.5 times over. The trailing operating margin of 6.3% is the number under all of it, and margin at that level leaves little cushion between a slower award cycle and a covenant conversation.

One thing counts on the other side of the ledger. Since 2020 the guidance ledger shows 13 raises and 4 reaffirmations, which is a management team that has consistently under-promised the next twelve months. The multiple, though, is not asking about the next twelve months. It is asking about the next decade.

Catalysts

First-quarter results, reported on April 30, 2026, were the strongest set this company has printed. Net revenues reached a record $1.982 billion, up 15.3% year over year with 10.4% of it organic, and reported net income of $57 million rose 62.9%. Safety Services contributed $1.42 billion, up 11.7% with 5.4% organic, while Specialty Services rose 25.6% to $569 million on 24.8% organic growth.

Management raised full-year guidance in the same release, taking net revenues to a range of $8.475 billion to $8.675 billion, implying 5% to 7% organic growth, and full-year adjusted EBITDA, the company's own non-GAAP measure, to $1.15 billion to $1.21 billion. For the second quarter specifically, management guided net revenues of $2.175 billion to $2.225 billion and adjusted EBITDA of $300 million to $310 million.

Those numbers get tested before the market opens on July 30, 2026, when second-quarter results are released ahead of an 8:30 a.m. Eastern call. The acquisition of CertaSite, completed on February 2, 2026, is also inside these comparisons now, so the second quarter is the first clean look at how much of the revenue growth is bought and how much is generated.

Peer Cohorts (Per Segment, With Filing Citations)

Safety Services (reported)

• ABM (ABM INDUSTRIES INCORPORATED)
• FY2025 10-K: …support services to airlines and airports, including parking and transportation management, janitorial and maintenance services, passenger assistance, catering logistics, aircraft cabin maintenance, and transportation solutions. We typically provide services to clients in this segment under master services…
• FY2025 10-K: …abm:BusinessAndIndustryMember 2024-11-01 2025-10-31 0000771497 abm:FacilityServiceLineAviationServicesMember abm:ManufacturingAndDistributionMember 2024-11-01 2025-10-31 0000771497 abm:FacilityServiceLineAviationServicesMember abm:AviationMember 2024-11-01 2025-10-31 0000771497…
• ROL (ROLLINS INC)
• FY2025 10-K: …customers. In some instances of these claims, the customer may initiate litigation or arbitration proceedings against us or one of our brands. Our safety and risk management programs may not have the intended effect of reducing our liability for employee-work related injuries, third party-liability claims or property…
• FY2025 10-K: …at every level of the organization. Our structure is designed to ensure effectiveness and alignment with the Company's goals and objectives. Community Involvement We are a family of brands that has always upheld service - to our teammates, customers, and communities - as a cornerstone. While each of our diverse…
• FTDR (Frontdoor, Inc.)
• FY2025 10-K: …security of personal information about our customers, associates or third parties could result in the interruption of our business operations, private litigation, reputational damage and costly penalties. We rely on, among other things, commercially available systems, software, tools and monitoring to provide…
• FY2025 10-K: …and a lock re-keying service. Through commercial partners and our scale, we are also able to offer our home warranty customers significant discounts for purchases of new HVAC systems and appliances. More recently, we have partnered with Moen to provide installation of water shut-off monitors for non-home warranty…
• ADT (ADT Inc.)
• FY2025 10-K: …respect to shares of our Common Stock owned by State Farm. State Farm's contractual lock-up period restricting the transfer of the shares of Common Stock owned by State Farm terminated on October 13, 2025. Refer to Note 16 "Related Party Transactions" in the Notes to Consolidated Financial Statements. SEGMENT AND…
• FY2025 10-K: …130 SSOs, supported by our regional distribution centers, as well as our nationwide network of multi-use sales, customer, and field support locations housing our six UL-listed monitoring centers. As of December 31, 2025, we leased 1.7 million square feet of space in the U.S. primarily under long-term operating leases…
• JCI (JOHNSON CONTROLS INTERNATIONAL PLC)
• FY2025 10-K: …sells, installs, and services HVAC, controls, building management, refrigeration, integrated electronic security systems, integrated fire detection and suppression systems, and digital (software) solutions for commercial, industrial, data center, institutional, and governmental customers and provides technical…
• FY2025 10-K: …providers. We and third parties utilize vendors to support our business and operations have experienced, and expect to continue to experience, these types of threats and incidents, which add to the risks to our IT systems (including our cloud services providers' systems), internal networks, our customers' systems and…

Specialty Services (reported)

• MTZ (MasTec, Inc.)
• FY2025 10-K: …Resources," for discussion of our capital resources and recent activities. Leverage Core Performance and Expertise through Strategic Acquisitions . We pursue selected acquisitions, investments and strategic arrangements that allow us to expand our operations, service offerings, customer base or geographic reach. We…
• FY2025 10-K: …renewable energy power generation; pipeline infrastructure, including for natural gas, water, carbon capture sequestration and other product transport; power delivery services, including electrical and gas transmission and distribution systems; industrial and heavy civil infrastructure, including roads, bridges and…
• PWR (Quanta Services, Inc.)
• FY2025 10-K: …and energy delivery companies, as well as governmental entities. We have estimated revenues by customer type as a percentage of total revenues below. Such estimates 8 are based on management judgment and assumptions and are provided to show perceived trends in our customer types and should be considered directional…
• FY2025 10-K: …piping, fabrication and storage tank services for the midstream and downstream industrial energy markets, as well as specialty cleaning and environmental solutions for the industrial energy and petrochemical markets; • engineering and construction services for pipeline systems, storage systems and compressor and pump…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …systems. ​ The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, and petroleum and petrochemical…
• FY2025 10-K: …We maintain a revolving credit facility to provide letter of credit capability and, if needed, to augment our liquidity needs. ​ Backlog ​ Backlog is discussed in Item 7. " Management's Discussion and Analysis of Financial Condition and Results of Operations " of this Annual Report on Form 10-K, which is incorporated…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
• FY2025 10-K: Condition and Results of Operations in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2024 (filed February 26, 2025). Overview-Introduction We are a holding company of specialty electrical construction service providers that was established in 1995 through the merger of long-standing…
• GVA (GRANITE CONSTRUCTION INC)
• FY2025 10-K: …Company, Inc. ("Papich Construction"), a provider of construction services and materials in California's Central Coast and Central Valley regions; and Cinderlite Trucking Corporation ("Cinderlite"), a construction materials, landscape supply and transportation company in Carson City, Nevada. Diversification: To…
• FY2025 10-K: …reinvestment of dividends. Fiscal year ending December 31. Item 6. RESERVED 31 Table of Contents Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS General We deliver infrastructure solutions for public and private clients primarily in the United States. We are one of the…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …and Results of Operations" is provided to assist readers in understanding our financial performance during the periods presented and significant trends that may impact our future performance. This discussion should be read in conjunction with our Consolidated Financial Statements and the related notes thereto.…
• FY2025 10-K: …medical benefits to employees electing coverage under the plans. Under its self-insured plans, the Company has stop-loss coverage per claim to limit the exposure arising from these claims. Self-insured claims filed and claims incurred but not reported are accrued based upon management's estimates of the ultimate cost…
• TTEK (TETRA TECH, INC.)
• FY2025 10-K: …for commercial and government clients across the municipal water, energy, transportation, defense and manufacturing sectors. Both CAW and SAGE are included in our CIG segment. In fiscal 2024, we acquired LS Technologies ("LST"), an innovative U.S. federal enterprise technology services and management consulting firm…
• FY2025 10-K: …LS Technologies ("LST"), an innovative U.S. federal enterprise technology services and management consulting firm based in Fairfax, Virginia. LST provides high-end consulting and engineering services including 62 advanced data analytics, cybersecurity and digital transformation solutions to U.S. government clients.…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.