10 Best Water Stocks to Buy According to Hedge Funds

7. Tetra Tech Inc. (NASDAQ:TTEK)

Number of Hedge Fund Holders: 37

Tetra Tech Inc. (NASDAQ:TTEK) is a leading consulting and engineering firm specializing in water, environment, sustainable infrastructure and energy solutions. The company operates across more than 100 countries, serving government agencies, commercial clients, and industrial sectors. TTEK focuses on high-end consulting and technical services, leveraging data-driven approaches and advanced analytics to address complex water management, environmental restoration, and climate resilience challenges. Its expertise spans water treatment, flood mitigation, ecosystem restoration, and smart water solutions, positioning it as a key player in the global water sector. The California-based company ranked fifth on our recent list of 16 Best 52-Week Low Stocks To Buy Now According to Short Sellers.

Tetra Tech Inc. (NASDAQ:TTEK) achieved record results in the latest Q1 2025, with net revenue increasing 18% YoY and operating income growing 24% YoY. The company’s earnings per share increased 25% YoY to $0.35, exceeding guidance and consensus expectations, while backlog grew 15% YoY. Both segments performed strongly, with Government Services Group (GSG) revenue up 36% and Commercial International Group (CIG) delivering a 13% margin. The company saw significant growth across various sectors, with US federal clients up 32%, state and local revenues up 47%, and U.S. commercial net revenues up 7% year-on-year. International work represented over one-third of revenues, including water programs in the UK and Ireland, infrastructure services in Canada, and defense infrastructure work in the UK and Australia.

Despite recent challenges including USAID contracts being put on hold for review, management maintains confidence in the company’s fundamental drivers, citing strong demand for water design services, disaster preparedness and federal IT modernization. Management claims that water is at the forefront of recovery needs post disasters and essential to cities and growing communities across the US and internationally. Water scarcity remains a fundamental driver, with solutions needed beyond single sources including desalination, water reuse, storm water capture and other alternative water sources. These water-related drivers are expected to extend beyond 2030, supporting the company’s long-term growth prospects.