Wrapping up Q3 earnings, we look at the numbers and key takeaways for the construction and maintenance services stocks, including MYR Group (NASDAQ:MYRG) and its peers.
Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years–. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.
The 12 construction and maintenance services stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.
Luckily, construction and maintenance services stocks have performed well with share prices up 19.4% on average since the latest earnings results.
MYR Group (NASDAQ:MYRG)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry.
MYR Group reported revenues of $888 million, down 5.5% year on year. This print fell short of analysts’ expectations by 3.2%. Overall, it was a mixed quarter for the company with an impressive beat of analysts’ EPS estimates but a significant miss of analysts’ backlog estimates.
Management CommentsRick Swartz, MYR’s President and CEO, said, “Our core markets remain active, and bidding activity continued at a robust pace during the quarter. Opportunities for long-term growth remain healthy as we continue to strategically expand our strong customer relationships across our business segments.”
Interestingly, the stock is up 34.5% since reporting and currently trades at $155.11.
Is now the time to buy MYR Group? Access our full analysis of the earnings results here, it’s free.
Best Q3: Limbach (NASDAQ:LMB)
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Limbach reported revenues of $133.9 million, up 4.8% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Limbach delivered the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 31.9% since reporting. It currently trades at $102.88.
Is now the time to buy Limbach? Access our full analysis of the earnings results here, it’s free.
Tutor Perini (NYSE:TPC)
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.
Tutor Perini reported revenues of $1.08 billion, up 2.1% year on year, falling short of analysts’ expectations by 7.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Tutor Perini delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 5.6% since the results and currently trades at $28.57.
Read our full analysis of Tutor Perini’s results here.
Granite Construction (NYSE:GVA)
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Granite Construction reported revenues of $1.28 billion, up 14.2% year on year. This print missed analysts’ expectations by 0.9%. Overall, it was a disappointing quarter as it also logged a significant miss of analysts’ adjusted operating income estimates.
The stock is up 20.8% since reporting and currently trades at $99.10.
Read our full, actionable report on Granite Construction here, it’s free.
Orion (NYSE:ORN)
Established in 1994, Orion (NYSE:ORN) provides construction services for marine infrastructure and industrial projects.
Orion reported revenues of $226.7 million, up 34.5% year on year. This print lagged analysts' expectations by 3.6%. Taking a step back, it was still a strong quarter as it put up a solid beat of analysts’ EPS and EBITDA estimates.
The stock is up 63.8% since reporting and currently trades at $8.88.
Read our full, actionable report on Orion here, it’s free.
Market Update
As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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