APi Group Corporation (APG): what the price requires
At today's price, APi Group Corporation (APG) is priced for today's economics sustained for ~10.3 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/APG
Headline
| Field | Value |
|---|---|
| Ticker | APG |
| Company | APi Group Corporation |
| Current price | $41.33/sh |
| Composition | Life Safety 69% / Infrastructure and Utility 13% / Fabrication and Distribution 4% / Specialty Contracting 14% / Corporate and Eliminations 0% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 4.2% |
| Operating margin today | 6.3% |
| Margin compression implied | -2.1pp |
| Must persist for | 10.3y |
| Multiple paid | 41x operating income |
The operating-margin requirement is derived from the framework's value band at year 8, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10.2% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +0.25σ |
| cohort percentile (of 225 peers) | 84 |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.12x | 3 | expensive |
| Earnings | 3.79x | 3 | expensive |
| Relative | 0.88x | 3 | justifies |
| Growth | 0.81x | 3 | justifies |
Families that justify the price: Relative, 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 8.1%); the inversion above states its own rate.
Per-Model Detail (n=12)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $50.94 | 0.81x | yes | FCF base $0.7B, growth 15% (input: historical growth), terminal g 4.0%, WACC 8.1%, 6yr projection |
| DCF Exit Multiple | Growth | $54.06 | 0.76x | yes | Exit EV/EBITDA: 28.5x / 30.5x / 32.5x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $46.97 | 0.88x | yes | P/S fallback (negative EPS): Sector P/S 2.5x × TTM revenue — excluded from consensus |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $8.05 | 5.13x | yes | BV/sh $8.01, ROE (TTM) 9.3%, ke 9.3% |
| Two-Stage Excess Return | Asset | $8.07 | 5.12x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $40.35 | 1.02x | yes | Rev $8.2B, growth 15% (input: historical growth; tapered), Terminal P/S: 1.8x / 2.2x / 2.6x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $0.00 | — | no | Negative/zero EPS — earnings-based value floored at $0 |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $3.57 | 11.58x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.37B × (1−20%) / WACC 8.1% → EPV (no growth) |
| Residual Income | Asset | $8.07 | 5.12x | yes | BV $8.01 + 5yr PV of (ROE (TTM) 9.3% − Kₑ 9.3%) × BV; BV grows 6.0%/yr |
| Graham Number | Asset | — | — | no | — |
| EV/EBITDA Relative | Relative | $13.30 | 3.11x | yes | EBITDA $0.66B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $12.02 | 3.44x | yes | FCF $680.0M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $10.91 | 3.79x | yes | SBC-adj FCF $0.64B (FCF $0.68B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | — | — | no | — |
| ROIC-Justified P/B | Asset | $1.45 | 28.50x | yes | BV $8.01 × (ROIC 1.5% / WACC 8.1%) (excluded from median) |
| P/Sales Sector | Relative | $46.97 | 0.88x | yes | Revenue $8.17B × sector P/S 2.5x |
| PEG Fair Value | Relative | — | — | no | — |
| Earnings Yield | Earnings | — | — | no | — |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.1b |
| Net debt / NOPAT (after-tax) | 5.38x |
| Net debt / operating income (pre-tax) | 4.32x |
| Interest coverage | 3.5x |
| Share count CAGR (dilution) | 5.7% |
| Burning cash | no |
Bullet Takeaways
- APi Group is a life-safety services roll-up where inspection, service, and monitoring of fire and safety systems is about 69% of revenue, work that is recurring and often legally mandated rather than discretionary.
- The biggest risk is the price: the market is paying roughly 42 times operating income, a multiple that requires a decade of uninterrupted acquisition-fueled growth at a margin the company is still working to expand.
- Watch the integration of the latest deals and the EBITDA margin; APi raised full-year 2026 guidance to organic growth of 5% to 7% and an adjusted EBITDA margin near 13.8%, and the gap between that EBITDA margin and the thin GAAP earnings is the whole valuation debate.
Bull Case
Start with the balance sheet and what management has chosen to do with it, because that is the engine of this story. APi Group carries about $2.1 billion of net debt against $573 million of trailing operating income, roughly 3.7 times, with interest coverage near 19 times and $645 million of liquid assets on hand. That is leverage deployed deliberately, not distress: the company has spent the last several years buying life-safety businesses and folding them into a single platform. The 10-K describes a model built "due to our differentiated operating model, diversified services offerings, historically strong organic growth, and disciplined acquisition strategy" that it believes produces "an attractive financial performance profile," and the recent prints back the growth claim: first-quarter 2026 revenue rose to $1,982 million from $1,719 million a year earlier.
The durable advantage is the nature of the revenue, not the M&A pace. APi's life-safety go-to-market is, in its own words, "inspection-first," meaning it leads with the recurring inspection of fire and safety systems and then captures the service and repair work that inspection generates. Much of that inspection is mandated by code, which makes it among the least cyclical revenue in industrials: a building's fire-suppression system gets inspected on a schedule whether or not the economy is growing. That recurring base, spread across roughly 20 countries with relationships maintained "with local decision makers while also having the ability to execute multi-site services for national and international account customers," is what lets a contracting business behave more like a services annuity.
The growth runway is the acquisition pipeline plus margin expansion on what it already owns. APi continues to consolidate a fragmented industry, signing definitive agreements to buy Wtech Fire Group for about 324 million euros and Onyx-Fire Protection Services for about 725 million Canadian dollars, extending its footprint into Europe and Canada. It raised full-year guidance to $8.475 to $8.675 billion of revenue and an adjusted EBITDA margin near 13.8%. Against a business-services cohort that includes Rollins, ABM, and Frontdoor, the bull case is that APi combines code-mandated recurring revenue with a still-open consolidation opportunity, and that the margin has further to climb as the acquired businesses are integrated.
Bear Case
The structural truth a holder would rather not face is what the price actually requires. At roughly 42 times operating income, the market is paying for APi to hold growth at its self-funding ceiling for about 11 years. Only about 14% of comparable fast-growers have sustained that pace for a decade. This is not a stock priced on what the business has demonstrated; it is priced on the assumption that the roll-up keeps working, at scale, for far longer than most roll-ups do. The asset-value and earnings-power methods both flag the price as expensive, sitting several times above where they land, and only the relative-multiple and forward-growth lenses reach it. The premium is real and it is large.
The mechanics of the roll-up are where the risk concentrates. Growth funded by acquisition shows up two ways the bull case has to clear: leverage and share count. APi's share count has risen at about a 17% annual pace, and the 10-K is explicit about the source, noting that "during 2024, we issued 18,975,000 shares of Company common stock in a public underwritten offering" to help fund deals. That is dilution, and it is why GAAP earnings stay thin even as revenue compounds: first-quarter diluted EPS was $0.12, a small number against a $42 stock. Every acquisition also adds goodwill and intangibles whose value rests on estimates the 10-K acknowledges are critical, including "future expected cash flows from backlog, customer" relationships and similar inputs. If integration disappoints or organic growth slows, those intangibles are where the writedowns would appear.
The valuation gap is the bear's real argument. The company guides to an adjusted EBITDA margin near 13.8%, but trailing GAAP operating margin is about 7%, and the implied math in the price assumes the business holds a margin profile and growth duration well beyond what it earns today. The bear does not need APi to be a bad business; the recurring inspection base is genuinely attractive. It needs the acquisition machine to slow, the margin expansion to stall short of the target, or the dilution to keep outrunning per-share earnings, any of which leaves a 42-times multiple resting on a 7%-margin contractor. That is a long way to fall to where the static methods say the business is worth.
Valuation
The price is making a bet on time, not just on growth. Inverted, today's price embeds APi holding growth at its self-funding ceiling for roughly 11 years, which works out to about 42 times operating income. The near-term growth rate is within what the company has recently delivered; the stretch is entirely in the duration, the assumption that the acquisition-and-integration flywheel keeps turning at this pace for more than a decade. History is not encouraging on that specific point: only about 14% of comparable fast-growers sustained this kind of pace for ten years. That is the elevated bet the price is making.
The methods split cleanly and the split is the signal. The relative-multiple and forward-growth lenses reach the price, reading it as roughly fair on peer comparisons and on a growth-DCF that credits the expansion. The asset-value and earnings-power methods do not come close, flagging the price several times above where they land. That pattern is characteristic of a high-quality roll-up: the static methods see a thin-margin contractor with a lot of goodwill, while the forward methods see a compounding services platform, and the price sides with the forward view. The disagreement is not noise; it is the precise question of whether you are buying an annuity-like inspection business or a leveraged acquisition vehicle whose multiple unwinds if the deals stop.
Solvency sets the boundary on how wrong the bet can go. Net debt of about $2.1 billion is 3.7 times trailing operating income, manageable but real, with interest coverage near 19 times providing comfortable service today. The complication is that growth has been funded partly with equity, so the share count has climbed about 17% a year, which means the per-share value of any given level of earnings is being diluted even as the enterprise grows. Against the business-services cohort, APi's recurring inspection revenue justifies a services multiple rather than a contractor multiple, but the size of the premium assumes the consolidation story runs for years more, and the balance sheet plus the rising share count are the two levers that determine whether it can.
Catalysts
The first-quarter 2026 results showed the growth engine running. Net revenue rose to $1,982 million from $1,719 million a year earlier, net income increased to $57 million from $35 million, and diluted EPS rose to $0.12 from $0.07, with operating income improving to $103 million. On the back of the quarter, APi raised full-year guidance to $8.475 to $8.675 billion of net revenue, organic growth of 5% to 7%, and adjusted EBITDA of $1.15 to $1.21 billion at a midpoint margin near 13.8%.
The acquisition pipeline is the live catalyst. APi signed definitive agreements to acquire Wtech Fire Group for about 324 million euros and Onyx-Fire Protection Services for about 725 million Canadian dollars, extending its fire and life-safety footprint into Europe and Canada. These deals are the continuation of the consolidation strategy, and their integration and margin contribution are what the next several quarters will be judged on. The earlier Chubb restructuring program, designed to drive synergies and lift operating margin, concluded in the second quarter of 2025, shifting the margin story from restructuring to organic improvement.
The forward watch items are the EBITDA margin trajectory and the pace of deal integration. Because the valuation rests on the company sustaining growth and expanding margin for years, the gap between the guided EBITDA margin and the realized GAAP margin is the metric that matters most, and the cadence of new acquisitions against the leverage and share-count cost of funding them is the second. Confirmation that the latest European and Canadian deals close and integrate on plan would support the growth-duration assumption the price depends on.
Peer Cohorts (Per Segment, With Filing Citations)
Safety Services (reported)
- ABM (ABM INDUSTRIES INCORPORATED)
- (no filing in the citation store)
- ROL (ROLLINS INC)
- (no filing in the citation store)
- FTDR (Frontdoor, Inc.)
- (no filing in the citation store)
- ADT (ADT Inc.)
- (no filing in the citation store)
- JCI (JOHNSON CONTROLS INTERNATIONAL PLC)
- (no filing in the citation store)
Specialty Services (reported)
- MTZ (MasTec, Inc.)
- (no filing in the citation store)
- PWR (Quanta Services, Inc.)
- (no filing in the citation store)
- PRIM (Primoris Services Corporation)
- (no filing in the citation store)
- MYRG (MYR GROUP INC.)
- (no filing in the citation store)
- GVA (GRANITE CONSTRUCTION INC)
- (no filing in the citation store)
- STRL (Sterling Infrastructure, Inc.)
- (no filing in the citation store)
- TTEK (TETRA TECH, INC.)
- (no filing in the citation store)
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.
- 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.
Sources
APi Group Q1 2026 results, June 2026 · APi Group Q1 2026 disclosures, 2026 · APi Group disclosures, 2025