Tetra Tech Experiences Significant Stock Dip: Is It Time to Invest?

Tetra Tech (NASDAQ: TTEK), a prominent consulting and engineering services provider, faced a decline of over 30% in its stock price in less than a month as of the end of February. This downturn coincided with rising market concerns regarding trade tensions. Should you consider buying this dip? Buying dips can be a strategic move for high-quality stocks when overall market conditions are favorable. Notably, Tetra Tech has historically shown resilience, averaging a 56% return one year after such dips and achieving a peak return of 61% in the past.

Image by Gerd Altmann from Pixabay

Current Dip Opportunity

Since the recent dip—a downturn exceeding 30%—in just under a month, TTEK has managed to recover by 2.8%. Below are details regarding its historical performance from past dips:

Past Data on Recovery from Dips

Since January 1, 2020, TTEK has faced two situations where its stock dropped 30% within 30 days. The following data details its recovery performance following these events:

• 61% median peak return within one year after the dip
• 167 days is the median time to reach peak return post-dip
• -1.6% median max drawdown in one year after the dip

Tetra Tech Passes Basic Financial Quality Checks

Assessing the company’s revenue growth, profitability, cash flow, and balance sheet strength is crucial in determining whether a dip signals an underlying deterioration in business fundamentals.

While dip buying may appear appealing, it requires comprehensive evaluation from various angles. This multifactor analysis guides the construction of Trefis portfolio strategies. Investors interested in a more stable option than individual stocks might consider the High-Quality portfolio, which has outperformed the S&P 500, boasting over 91% returns since inception.

Returns	Mar 2025 MTD [1]	2025 YTD [1]	2017-25 Total [2]
TTEK Return	3%	-25%	268%
S&P 500 Return	-3%	-2%	158%
Trefis Reinforced Value Portfolio	-4%	-5%	643%

[1] Returns as of 3/10/2025
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.