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 MYR Group (NASDAQ: MYRG) and the rest of the construction and maintenance services stocks fared in Q2.
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 13 construction and maintenance services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 3.5% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 9.3% 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 $900.3 million, up 8.6% year on year. This print exceeded analysts’ expectations by 6%. Overall, it was a strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates.
Management CommentsRick Swartz, MYR’s President and CEO, said, “Our second quarter performance resulted in quarterly revenues of $900 million and backlog of $2.64 billion with net income, consolidated gross profit, gross margin and EBITDA all increasing compared to the same period of 2024.”
The market was likely pricing in the results, and the stock is flat since reporting. It currently trades at $200.
Is now the time to buy MYR Group? Access our full analysis of the earnings results here, it’s free.
Best Q2: Primoris (NYSE: PRIM)
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Primoris reported revenues of $1.89 billion, up 20.9% year on year, outperforming analysts’ expectations by 12.1%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.
Primoris achieved the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 51.4% since reporting. It currently trades at $141.
Is now the time to buy Primoris? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Matrix Service (NASDAQ: MTRX)
Founded in Oklahoma, Matrix Service (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $216.4 million, up 14.2% year on year, falling short of analysts’ expectations by 6.8%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations.
Matrix Service delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. As expected, the stock is down 9.5% since the results and currently trades at $12.89.
Read our full analysis of Matrix Service’s results here.
Comfort Systems (NYSE: FIX)
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $2.17 billion, up 20.1% year on year. This result surpassed analysts’ expectations by 10.6%. It was an incredible quarter as it also logged an impressive beat of analysts’ backlog estimates and a beat of analysts’ EPS estimates.
The stock is up 49.1% since reporting and currently trades at $838.88.
Read our full, actionable report on Comfort Systems here, it’s free.
Great Lakes Dredge & Dock (NASDAQ: GLDD)
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Great Lakes Dredge & Dock reported revenues of $193.8 million, up 13.9% year on year. This print topped analysts’ expectations by 9%. Overall, it was an incredible quarter as it also produced a beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 14.5% since reporting and currently trades at $12.15.
Read our full, actionable report on Great Lakes Dredge & Dock 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 U.S. 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, leaving much uncertainty around 2025.
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