Fluor (FLR 1.48%), one of the world's leading engineering and construction firms, may seem like a stable long-term investment. Yet in 2025, its stock declined 20% as the S&P 500 rose 17%.
A large portion of that decline occurred after the company's second-quarter earnings report on Aug.1, which missed analysts' top and bottom-line expectations. It reduced its full-year outlook and abruptly disclosed cost overruns, scheduling delays, and design problems in its most significant infrastructure projects -- including the Gordie Howe Bridge and several Texas highways. Its backlog (orders for future contracted work) also shrank as it grappled with those challenges.
Image source: Getty Images.
Fluor's unexpected guidance reduction and execution issues triggered a class action lawsuit from some of its investors, who allege that the company made "materially misleading" statements regarding its growth prospects in the months before its second-quarter report.
Fluor also agreed to pay Santos, an Australian oil and gas exploration and production company, $653 million to resolve a protracted legal dispute during the third quarter of 2025. It booked that charge as a reduction to its third-quarter revenue (to deduct its previous sales from the project) instead of an expense, which exacerbated its top-line decline for the rest of the year.
Can Fluor overcome these issues over the next 12 months, or will its stock sink even lower? Let's review its upcoming challenges and catalysts to make an informed decision.
NYSE: FLR
Key Data Points
What happened to Fluor over the past year?
In 2024, Fluor's revenue increased by 5% as the growth of its urban solutions segment offset declines in its energy solutions and mission solutions revenues. However, its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) still sank 14% as it generated lower profits from its cyclical energy solutions segment and won fewer contracts.
On a generally accepted accounting principles (GAAP) basis, Fluor's earnings per share (EPS) surged from $0.54 in 2023 to $12.30 in 2024. That big jump can be entirely attributed to the sales of its shares in NuScale Power (SMR 0.98%). Its adjusted EBITDA, which excluded those volatile one-time transactions, stayed choppy throughout most of 2025.
|
Metric |
Q3 2024 |
Q4 2024 |
Q1 2025 |
Q2 2025 |
Q3 2025 |
|---|---|---|---|---|---|
|
Revenue Growth (YOY) |
3% |
12% |
7% |
6% |
(18%) |
|
Adjusted EBITDA Growth (YOY) |
(43%) |
6% |
76% |
(42%) |
29% |
|
Backlog Growth (YOY) |
20% |
(3%) |
(12%) |
(13%) |
(10%) |
Data source: Fluor. YOY = Year-over-year.
Fluor's aforementioned settlement with Santos significantly reduced its revenue in the third quarter, and its backlog shrank year over year for four consecutive quarters as it completed its existing projects more quickly than it could secure new contracts.
Its disclosures of cost overruns and execution issues in its most significant projects also likely prevented new customers from signing up, and it intentionally shifted toward smaller and lower-risk contracts to diversify its business and reduce its long-term dependence on massive infrastructure projects. Its investment and partnership with NuScale, which is developing small modular reactors (SMR) for its nuclear plant in Romania, also likely distracted its management from the issues that are now affecting its projects in Michigan and Texas.
Where will Fluor's stock be in a year?
For the full year, analysts expect Fluor's revenue and EBITDA to decline 4% and 19%, respectively. For 2026, they expect its revenue and EBITDA to rise by 7% and 10%, respectively, as the business gradually stabilizes. With an enterprise value of $4.5 billion, it still looks like a bargain at nine times next year's EBITDA and less than one times next year's sales.
That low valuation should limit its downside potential over the next year. Starboard Value, the activist investor that acquired nearly 5% of Fluor's shares in October, has also been pressing the company to monetize its 39% stake in NuScale with open-market sales or a tax-free spin-off. Fluor could then plow that cash into big buybacks while its stock still trades at depressed levels.
Based on these facts, I believe Fluor's stock will gradually rise over the next 12 months. It won't soar, but the bulls will likely return if it resolves its execution issues, its backlog grows again, and it finds fresh ways to monetize its stake in NuScale.
