Yahoo Finance Spotting Winners: EMCOR (NYSE:EME) And Engineering and Design Services Stocks In Q1
As the Q1 earnings season wraps, let's dig into this quarter's best and worst performers in the engineering and design services industry, including EMCOR (NYSE:EME) and its peers.
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. Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. The start of 2024 has been a different story as mixed signals have led to market volatility, but engineering and design services stocks have shown resilience, with share prices up 8.6% on average since the previous 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 $3.43 billion, up 18.7% year on year, exceeding analysts' expectations by 6.4%. Overall, it was a stunning quarter for the company with an impressive beat of analysts' earnings estimates and full-year revenue guidance exceeding analysts' expectations.
Tony Guzzi, Chairman, President, and Chief Executive Officer of EMCOR, commented, “The Company had an exceptional start to the year, sustaining momentum throughout the first quarter and setting new records in key financial and operational metrics. Our confidence is reinforced by the significant year-over-year increase in our remaining performance obligations and a healthy project pipeline, all of which provide us with strong visibility into the remainder of the year and is reflected in our increased financial guidance for 2024.”
EMCOR pulled off the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise of the whole group. The stock is up 10.8% since reporting and currently trades at $375.17.
Best Q1: 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 $1.14 billion, up 9.3% year on year, outperforming analysts' expectations by 4.5%. It was an incredible quarter for the company with an impressive beat of analysts' earnings estimates.
The market seems happy with the results as the stock is up 15.9% since reporting. It currently trades at $178.98.
Is now the time to buy Dycom? Access our full analysis of the earnings results here, it's free.
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, exceeding analysts' expectations by 2.5%. It was a slower quarter for the company with a miss of analysts' earnings estimates and a miss of analysts' backlog sales estimates.
MasTec posted the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. Interestingly, the stock is up 17.2% since the results and currently trades at $106.73.
Read our full analysis of MasTec's results here.
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, surpassing analysts' expectations by 5.5%. Zooming out, it was a very strong quarter for the company.
The stock is down 9.5% since reporting and currently trades at $87.16.
Read our full, actionable report on AECOM here, it's free.
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