EMCOR Group (EME) has delivered a remarkable 142.6% return over the past two years, demonstrating strong long-term performance. However, the stock has hit a rough patch recently, plummeting 15.2% year to date (YTD). The stock even performed below the broader Construction sector’s 9% decline and the S&P 500’s 4.7% decrease.EME’s Share PerformanceImage Source: Zacks Investment ResearchNonetheless, EME stock has performed somewhat better than the Zacks Building Products - Heavy Construction industry’s 15.7% de ...

Core Viewpoint - Emcor Group (EME) shares have declined approximately 5.8% since the last earnings report, underperforming the S&P 500, raising questions about the potential for a breakout or continued negative trend leading up to the next earnings release [1] Group 1: Earnings and Estimates - Fresh estimates for Emcor Group have trended downward over the past month, indicating a negative shift in expectations [2] - The most recent earnings report is essential for understanding the key drivers affecting the company's performance [1] Group 2: VGM Scores - Emcor Group currently holds a strong Growth Score of A, while its Momentum Score is rated B, and it has a Value Score of B, placing it in the top 40% for this investment strategy [3] - The aggregate VGM Score for the stock is A, which is significant for investors not focused on a single strategy [3] Group 3: Outlook - The downward trend in estimates suggests a broader negative outlook for the stock, although Emcor Group maintains a Zacks Rank 2 (Buy), indicating expectations for above-average returns in the coming months [4]

Group 1 - Jason Hall has no position in any of the stocks mentioned [1] - Tyler Crowe has positions in EMCOR Group [1] - The Motley Fool has positions in and recommends EMCOR Group [1]

Market Overview - The S&P 500 experienced its worst week since September, attributed to "tariff fatigue" and concerns over a potential economic slowdown [1] - Investors are looking for clear signals regarding trade policies, while analysts believe the Federal Reserve will not hastily cut interest rates, preferring to wait for more indicators of inflation stabilization [1] Investment Strategy - Current market conditions present an opportunity to identify quality stocks, with Return on Equity (ROE) being a key measure of quality [2] - Advanced analysis of ROE through DuPont analysis can yield better investment returns by examining operating management, asset management, and capital structure [4][5] DuPont Analysis - DuPont analysis breaks down ROE into three components: Profit Margin, Asset Turnover Ratio, and Equity Multiplier, providing a more comprehensive view of a company's financial health [4][5] - This method helps investors differentiate between companies with high margins and those with high turnover, offering insights into leverage and potential risks associated with high debt levels [6] Screening Parameters - Effective screening parameters include a Profit Margin of at least 3, an Asset Turnover Ratio of 2 or more, and an Equity Multiplier between 1 and 3 [8] - Additional criteria include a Zacks Rank of 1 or 2, and a current stock price above $5 to filter out low-priced stocks [9] Selected Stocks - Hims & Hers Health (HIMS): Zacks Rank 2, average earnings surprise of 40.42% [10] - Blue Bird (BLBD): Zacks Rank 2, average earnings surprise of 49.64% [10] - EverQuote (EVER): Zacks Rank 1, average earnings surprise of 160.73% [10] - EMCOR Group (EME): Zacks Rank 2, average earnings surprise of 28.95% [11] - Sprouts Farmers Market (SFM): Zacks Rank 2, average earnings surprise of 15.12% [12]

EMCOR Group (EME) has seen a notable increase in its earnings outlook, reflecting growing confidence in its future performance. Over the past week, analysts have revised EMCOR’s 2025 earnings per share (EPS) estimate upward from $22.24 to $23.37. This upward revision follows the company’s solid fourth-quarter 2024 results, reinforcing optimism about its ability to sustain momentum.Stay up-to-date with the quarterly releases: See Zacks Earnings Calendar.EME Stock’s Magnitude-Consensus Estimate TrendImage Sou ...

Here are three stocks with buy rank and strong value characteristics for investors to consider today, March 3rd:EMCOR Group, Inc. (EME) : This company that provides electrical and mechanical construction and facilities, building, and industrial services carries a Zacks Rank #1, and has witnessed the Zacks Consensus Estimate for its current year earnings increasing 5.1% over the last 60 days.EMCOR has a price-to-earnings ratio (P/E) of 17.50, compared with 20.00 for the industry. The company possesses a Valu ...

Core Viewpoint - Emcor Group (EME) has received an upgrade to a Zacks Rank 2 (Buy) due to an upward trend in earnings estimates, which is a significant factor influencing stock prices [1][2]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements, particularly influenced by institutional investors [3][5]. - An increase in earnings estimates typically leads to higher fair value for a stock, prompting institutional investors to buy or sell, thus affecting stock prices [3]. Business Improvement Indicators - The rising earnings estimates for Emcor Group indicate an improvement in the company's underlying business, which is expected to positively influence its stock price [4][9]. - For the fiscal year ending December 2025, Emcor Group is projected to earn $22.68 per share, reflecting a 5.4% increase from the previous year, with a 4% increase in the Zacks Consensus Estimate over the past three months [7]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a proven track record of Zacks Rank 1 stocks generating an average annual return of +25% since 1988 [6]. - The upgrade of Emcor Group to Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, indicating a strong potential for market-beating returns in the near term [8][9].

Core Insights - EMCOR Group, Inc. reported mixed fourth-quarter 2024 results, with earnings exceeding estimates while revenues fell short, yet both metrics showed year-over-year growth [1][3] - Following the results announcement, EMCOR's shares increased by 5.4% [1] Financial Performance - Adjusted earnings per share (EPS) for Q4 2024 were $6.32, surpassing the Zacks Consensus Estimate of $5.54 by 14.1% and reflecting a 41.4% increase from the previous year [3] - Revenues totaled $3.77 billion, missing the consensus estimate of $3.84 billion by 2.6%, but still representing a 9.6% year-over-year increase [3] - For the full year 2024, total revenues rose by 15.8% to $14.57 billion, and EPS increased by 61.7% to $21.52 [10] Segment Performance - U.S. Construction Services segment revenues grew by 16% year over year to $2.59 billion, with operating income increasing by 45% and margin expanding by 250 basis points to 14.2% [5] - Within U.S. Construction, the Electrical Construction and Facilities Services segment saw revenues rise by 22.2% to $933.2 million, with operating income surging by 93.9% [6] - The U.S. Building Services segment experienced a revenue decline of 2.8% to $755.6 million, while the U.K. Building Services segment's revenues fell by 0.8% to $107.9 million [7][8] Operating Highlights - Gross margin expanded by 210 basis points year over year to 20.1%, while operating margin increased by 190 basis points to 10.3% [9] - Selling, general and administrative expenses rose by 12.1% year over year to $368.5 million [9] Liquidity and Cash Flow - As of December 31, 2024, EMCOR had cash and cash equivalents of $1.34 billion, up from $789.8 million at the end of 2023 [11] - Net cash provided by operating activities was $1.41 billion in 2024, compared to $899.7 million in the prior year [11] - Remaining performance obligations increased by $1.25 billion year over year to $10.1 billion [11] 2025 Outlook - The company anticipates annual revenues between $16.1 billion and $16.9 billion, with EPS expected to range from $22.25 to $24.00 [12]

If you like to see more ideas, please subscribe to the premium service "Value in Corporate Events" here and try the free trial. In this service we cover major earnings events, M&A, IPOs and other significant corporate events with actionable ideas. Furthermore, we provide coverage of situations and names on request!Shares of EMCOR Group, Inc. ( NYSE: EME ) (“Emcor”) have seen the real traits of a momentum run (both up and partially down) over the past year. Shares nearly tripled in the time frame of about a ...

Financial Data and Key Metrics Changes - For Q4 2024, the company reported record performance with diluted earnings per share of $6.32, operating income of $389 million, operating margin of 10.3%, operating cash flow of $469 million, and revenues of $3.77 billion, representing a 9.6% year-over-year increase [10][11] - For the full year 2024, revenues reached $14.6 billion, achieving a year-over-year growth of 15.8%, with diluted earnings per share of $21.52, operating income of $1.3 billion, and an operating margin of 9.2% [10][11] Business Line Data and Key Metrics Changes - US electrical construction revenues were $933.2 million, an increase of over 22%, driven by data center projects and broad-based demand in high-tech and traditional manufacturing [24] - US mechanical construction generated revenues of $1.66 billion, increasing 12.8%, with significant growth in network and communications, high-tech manufacturing, and healthcare [25][26] - US Building Services revenues were $755.6 million, a decrease of 5.8%, primarily due to nonrenewal of certain facilities maintenance contracts [28] - Industrial services revenues were $312.7 million, an increase of 6.9%, driven by field services [30] Market Data and Key Metrics Changes - The company reported aggregate RPOs (Remaining Performance Obligations) of $10.1 billion, a record and up 14% year-over-year [22][70] - RPOs in the data center sector reached $2.8 billion, up 80% year-over-year, indicating strong demand for hyper-scale data centers [58] - Healthcare RPOs were $1.3 billion, up 26% year-over-year, reflecting continued strong demand in that sector [67] Company Strategy and Development Direction - The company focuses on growing markets such as data centers, high-tech manufacturing, and healthcare, emphasizing the importance of skilled labor and project execution excellence [12][14] - The recent acquisition of Miller Electric is expected to enhance the company's presence in the Southeast and provide opportunities for future growth [20][44] - The company plans to continue disciplined capital allocation, balancing organic investments with acquisitions, and returning cash to shareholders [19][80] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenges such as supply chain issues and intense competition but expressed confidence in the company's ability to adapt and execute effectively [21][75] - The company anticipates a strong operating margin range of 8.5% to 9.2% for 2025, despite potential impacts from the Miller acquisition [41][76] - Management remains optimistic about long-term growth opportunities driven by reshoring and nearshoring trends [60][64] Other Important Information - The company completed seven acquisitions in 2024 for approximately $230 million and returned $43 million in cash through dividends and $500 million through share repurchases [19] - The Miller acquisition is expected to contribute significantly to revenue growth in 2025, with an estimated EPS accretion of 10 to 15 cents [45][46] Q&A Session Summary Question: Opportunities for revenue synergies with Miller acquisition - Management indicated that there are opportunities for revenue synergies, particularly in overlapping markets and shared customers [87][89] Question: Influence of AI data centers on bookings - Management noted that while AI data centers are starting to influence bookings, most of the work in 2025 will still be focused on building cloud storage data centers [90][92] Question: Future margin expectations - Management expressed caution about building on current margins but emphasized stability based on guidance and operational efficiencies [100][102]