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Engineering and Design Services Stocks Q1 Recap: Benchmarking MasTec (NYSE:MTZ)


Radek Strnad /
2024/07/08 3:48 am EDT

The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how MasTec (NYSE:MTZ) and the rest of the engineering and design services stocks fared in Q1.

Companies providing engineering and design services boast ever-evolving technical expertise. Compared to their counterparts who manufacture and sell physical products, these companies can also pivot faster to more trending areas due to their smaller physical asset bases. Green energy and water conservation, for example, are current themes driving incremental demand in this space. On the other hand, those providing engineering and design services are at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.

The 4 engineering and design services stocks we track reported a very strong Q1; on average, revenues beat analyst consensus estimates by 4.7%. while next quarter's revenue guidance was 1.9% below consensus. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, and engineering and design services stocks have held roughly steady amidst all this, with share prices up 4.4% on average since the previous earnings results.

Slowest Q1: MasTec (NYSE:MTZ)

Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

MasTec reported revenues of $2.69 billion, up 4% year on year, topping analysts' expectations by 2.5%. It was a slower quarter for the company, with a miss of analysts' earnings and backlog sales estimates.

Jose Mas, MasTec's Chief Executive Officer, commented "Our first quarter results significantly exceeded our expectations, and I expect 2024 to begin the validation of our investment and diversification strategy over the last few years. I believe that the investments we have made in broadening our service line offerings have placed us at the forefront of the country's future infrastructure needs. The expected power demand growth will have a significant impact on our Power Delivery, Clean Energy and Infrastructure, and Oil and Gas segments; coupled with the increasing demand for data capacity and speed impacting Communications, position all of our segments for growth."

MasTec Total Revenue

MasTec delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update of the whole group. The stock is up 10.4% since the results and currently trades at $100.58.

Read our full report on MasTec here, it's free.

Best Q1: Dycom (NYSE:DY)

Modern internet and phone connectivity is thanks to companies like Dycom (NYSE:DY), who provide infrastructure, telecommunications, and utility contracting services.

Dycom reported revenues of $1.14 billion, up 9.3% year on year, outperforming analysts' expectations by 4.5%. It was an incredible quarter for the company, with revenue and EPS exceeding Wall Street's expectations.

Dycom Total Revenue

The stock is up 9.7% since the results and currently trades at $169.42.

Is now the time to buy Dycom? Access our full analysis of the earnings results here, it's free.

AECOM (NYSE:ACM)

Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE:ACM) provides various infrastructure consulting services.

AECOM reported revenues of $3.94 billion, up 13% year on year, exceeding analysts' expectations by 5.5%. It was a very strong quarter for the company, with sales exceeding analysts' estimates, while EPS came in roughly in line.

The stock is down 12.3% since the results and currently trades at $84.44.

Read our full analysis of AECOM's results here.

EMCOR (NYSE:EME)

Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services

EMCOR reported revenues of $3.43 billion, up 18.7% year on year, surpassing analysts' expectations by 6.4%. It was a stunning quarter for the company, with an impressive beat of analysts' earnings estimates and full-year revenue guidance exceeding analysts' expectations.

EMCOR pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is up 9.9% since the results and currently trades at $372.

Read our full, actionable report on EMCOR here, it's free.

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