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Here's the thing about companies that have an excellent long-term track record of profitability and creating shareholder value: When they stumble, investors often don't knock their shares down far enough to make the stock a screaming, no-doubt-about-it buy.

An example, I think, is Stantec Inc., the Edmonton engineering-and-architecture firm that's been missing expectations because of factors both macro – its energy-industry clients – and things of its own accord, such as a series of missteps on some major projects. The shares are trading closer to their 52-week low than their high, with the most recent earnings disappointment wiping out some of the enthusiasm over a transformational acquisition that should reap long-term benefits.

At the same time, however, the shares are not what one would call cheap: According to S&P Global Market Intelligence, they are nearly 16 times forward earnings, and almost 10 times the next 12 months' EBITDA, or earnings before interest, taxes, depreciation and amortization – comparable to the stock's multiples before things got off track. This robust valuation has dampened analyst enthusiasm, with just three of 13 sell-siders rating the shares a buy, with the balance in the hold camp.

The situation presents a dilemma for potential investors in the stock: There's a case to be made that today's share price in Toronto – $30.84 at Thursday's close – represents a compelling "entry point," in the analyst parlance, for those who believe in the company's long-term prospects. At the same time, however, the upside may be limited, and the short-term offers the prospect of a reversal if the company's issues remain.

The bad before the good: Stantec's second-quarter results, released earlier this month, missed expectations on revenue and earnings, an increasingly frequent occurrence since the collapse in oil prices. It was the last straw for analyst Mona Nazir of Laurentian Bank, who threw in the towel and downgraded Stantec shares to "hold" on the news. She cited a continued decline in organic revenue growth (sales gains outside of acquisitions), and an EBITDA margin that "has come in significantly below expectations for three sequential quarters."

Bert Powell of BMO Nesbitt Burns notes that while Stantec's numbers are unsurprisingly blunted by weakness in the oil and gas industry, its results also suffered from "execution issues" at three of its projects in its buildings and infrastructure segments. Mr. Powell says they "appear to be dealt with," and says company management "noted that while project hiccups happen, it is rare to have three coincide with one another."

This confluence of bad news has overshadowed the prospects of Stantec's recent transformational deal to acquire MWH Global Inc., a Colorado-based engineering firm that specializes in water projects. MWH has a global reach and more than $1-billion (U.S.) in annual sales, which is a big deal for a Canadian company that had $2.8-billion (Canadian) in 2015 revenue, nearly all from the United States and Canada.

To get a sense of the back and forth in investor sentiment, we can track the views of Ben Cherniavsky of Raymond James Ltd. In a February note called The Glass is Half Empty, Mr. Cherniavsky downgraded Stantec to "market perform" after the company's string of misses, citing macroeconomic concerns in the United States and Canada and his skepticism about industry projections for Ontario government infrastructure spending.

Within a quarter, however, Mr. Cherniavsky was willing to see The Glass is Half Full, as his May upgrade report, to an "outperform," was titled. The MWH deal, announced in the interim, "provides an exciting international growth platform," he said, and Stantec management reset expectations by acknowledging that organic revenue growth would likely be mildly negative in 2016.

With the most recent results (report name: Bruised But Not Broken), Mr. Cherniavsky says he believes "the main ingredients that have made Stantec a solid 'core holding' over time remain unchanged."

"Looking back over the many years that we have followed the Stantec story, there is a single word that we feel encapsulates the company's performance: 'consistent,'" he writes. Growth had been steady, margins stable, execution issues rare and quarterly results clean. While "there have been some cracks in these pillars of consistency," Mr. Cherniavsky says that instead of an irreversible decline in the company, it reflects the more volatile macro environment – and he advises investors buy on its current weakness.

Indeed, Stantec represents an excellent example of a stock that doesn't seem to have the "catalysts" – another favourite word of the analysts – to propel it forward in the next year. But if its project-specific problems are indeed over, oil continues its slow recovery from its awful numbers earlier this year, and the company successfully integrates MWH, Mr. Cherniavsky might be able to write, and investors will find, that the Stantec glass is filled nearly to the top.

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