Here's Why You Should Avoid Investing in Tetra Tech Stock Now

Tetra Tech Inc. TTEK has failed to impress investors with its recent operational performance due to escalating operating costs and expenses and high debt levels. Also, given the company’s extensive international presence, foreign currency headwind is an added uncertainty.Headquartered in Pasadena, CA, Tetra Tech is a leading provider of consulting, construction management, engineering, program management and technical services. It serves clients by providing cost-effective and innovative solutions for dealing with the fundamental needs for water, environmental and alternative energy services.Tetra Tech currently carries a Zacks Rank #4 (Sell). In the past year, the stock has lost 23% compared with the industry’s 22% decline.Image Source: Zacks Investment ResearchRising Costs: The company has been witnessing the impacts of high operating expenses over time. Its total cost of sales increased 15.5% in the first quarter of fiscal 2025 (ended Dec. 29, 2024) due to rising input costs. Also, its selling, general and administrative expenses increased 5.7% year over year in the fiscal first quarter due to rising marketing costs. Escalating costs pose a threat to the bottom line.High Debt Level: High debt levels are likely to weigh on TTEK. Tetra Tech’s long-term debt in the last five years (2020-2024) increased 29.7% (CAGR). The company exited first-quarter fiscal 2025 with a long-term debt of $889 million. Its overall current liabilities were $1.3 billion, higher than the cash equivalents of $248.1 million.Forex Woes: TTEK’s international presence keeps it exposed to the risk of adverse currency fluctuations. This is because a strengthening U.S. dollar is likely to require the company to either raise prices or contract profit margins in locations outside the United States. Thus, adverse currency movements are a worry.Stocks to ConsiderSome better-ranked companies are discussed below:DNOW Inc. DNOW currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.DNOW delivered a trailing four-quarter average earnings surprise of 30.4%. In the past 60 days, the Zacks Consensus Estimate for DNOW’s 2025 earnings has increased 10.3%.Dover Corporation DOV presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 5.3%.In the past 60 days, the consensus estimate for DOV’s 2025 earnings has increased 0.3%.Applied Industrial Technologies, Inc. AIT presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 5.3%.The Zacks Consensus Estimate for AIT’s fiscal 2025 (ending June 2025) earnings has improved 0.3% in the past 60 days.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Tetra Tech, Inc. (TTEK): Free Stock Analysis Report Dover Corporation (DOV): Free Stock Analysis Report Applied Industrial Technologies, Inc. (AIT): Free Stock Analysis Report DNOW Inc. (DNOW): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks