Jacobs Solutions combines a $28.9 billion backlog with AI and infrastructure growth, offering long-term compounding despite near-term leverage and a premium DCF valuation.
Overview
Jacobs Solutions (NYSE: J) is a streamlined, asset-light engineering and technical consulting franchise following the September 2024 spin-off of Critical Mission Solutions and Cyber & Intelligence government services into Amentum. Its remaining platform combines Infrastructure & Advanced Facilities with fully owned PA Consulting, linking physical infrastructure design to high-margin digital advisory and software integration. **The investment case rests on a record $28.9 billion backlog, 1.2x net-revenue book-to-bill, and exposure to water, semiconductor reshoring, pharmaceutical manufacturing, and AI data-center construction.** Q3 FY2026 gross revenue rose 34.5% to $4.08 billion, adjusted net revenue increased 8.3% to $2.42 billion, adjusted EPS grew 13.6% to $1.84, and adjusted EBITDA margin expanded 109 basis points to 15.2%. Management raised FY2026 adjusted net-revenue growth guidance to 9.5%–10.0%, adjusted EPS to $7.20–$7.30, and FCF margin to 8.0%. The stock trades at $145.00, above the $123.81 DCF value but below the $237.23 five-year base target. Near-term catalysts are deleveraging, PA integration, backlog conversion, and IIJA reauthorization.