Let’s dig into the relative performance of EMCOR (NYSE:EME) and its peers as we unravel the now-completed Q4 engineering and design services earnings season.
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 5 engineering and design services stocks we track reported a strong Q4. As a group, revenues were in line with analysts’ consensus estimates while next quarter’s revenue guidance was 0.7% below.
In light of this news, share prices of the companies have held steady as they are up 3.7% on average since the latest earnings results.
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 $3.77 billion, up 9.6% year on year. This print fell short of analysts’ expectations by 0.6%, but it was still a very strong quarter for the company with an impressive beat of analysts’ EBITDA estimates.
Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “The Company reported outstanding results for the fourth quarter and full year of 2024. We achieved record revenues, operating income, operating margin, and diluted earnings per share for both the quarter and annual periods, reflecting strong demand for our services and exceptional execution by our team. Looking ahead, we anticipate continued momentum in demand, as evidenced by the 14.2% year-over-year increase in our remaining performance obligations."
EMCOR achieved the highest full-year guidance raise of the whole group. Unsurprisingly, the stock is up 2.9% since reporting and currently trades at $409.49.
Best Q4: Dycom (NYSE:DY)
Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.
Dycom reported revenues of $1.08 billion, up 13.9% year on year, outperforming analysts’ expectations by 5.7%. The business had an exceptional quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Dycom achieved the biggest analyst estimates beat and fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 4.3% since reporting. It currently trades at $164.21.
Is now the time to buy Dycom? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: 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 $4.01 billion, up 2.9% year on year, falling short of analysts’ expectations by 2.3%. It was a mixed quarter as it posted an impressive beat of analysts’ EPS estimates but adjusted operating income in line with analysts’ estimates.
As expected, the stock is down 7% since the results and currently trades at $96.64.
Read our full analysis of AECOM’s results here.
Sterling (NASDAQ:STRL)
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.
Sterling reported revenues of $498.8 million, up 2.6% year on year. This result came in 6.1% below analysts' expectations. In spite of that, it was a strong quarter as it recorded full-year EBITDA guidance exceeding analysts’ expectations.
Sterling had the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update among its peers. The stock is up 30.1% since reporting and currently trades at $151.29.
Read our full, actionable report on Sterling here, it’s free.
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 $3.40 billion, up 3.8% year on year. This print beat analysts’ expectations by 2.4%. Overall, it was a strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EPS estimates.
The stock is down 3% since reporting and currently trades at $123.01.
Read our full, actionable report on MasTec here, it’s free.
Market Update
Thanks to the Fed’s series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), and a notable surge followed Donald Trump’s presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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