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Everus Construction Group, Inc. (ECG)
NYSE:ECG
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Everus Construction Group, Inc.
(NYSE:ECG)
68Neutral
Positive Factors
Financial Performance
ECG net sales have grown an average annual rate of 15.9% from $1.1B in FY16 to $2.9B in FY23.
Growth Potential
The Electrical & Mechanical (E&M) segment now generates approximately 55% of sales from the commercial end-market, including data centers and hospitality, showing significant growth potential.
Market Position
ECG is ranked as the 10th largest specialty contractor in the US, serving roughly 3,700 customers on over 40,000 projects.
Negative Factors
Growth Expectations
Everus Construction Group's long-term targets for organic revenue and EBITDA growth are considered conservative due to its existing high single-digit percentage growth and exposure to T&D and data centers.
Valuation
Shares are up ~21% post-spin and are viewed as fairly valued at current trading levels.
Everus Construction Group, Inc. (ECG) vs. S&P 500 (SPY)
Market Cap
$1.85B
Dividend YieldN/A
Average Volume (3M)830.51K
Price to Earnings (P/E)12.9
Beta (1Y)2.96
Revenue Growth-0.16%
EPS Growth4.51%
CountryUS
Employees8,700
SectorServices
Sector StrengthN/A
IndustryEngineering & Construction
Share Statistics
EPS (TTM)2.81
Shares Outstanding50,999,230
10 Day Avg. Volume734,646
30 Day Avg. Volume830,511
Financial Highlights & Ratios
PEG Ratio2.85
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$61.67Price Target Upside70.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
Everus Construction Group, Inc. Business Overview & Revenue Model
Company DescriptionEverus Construction Group, Inc. provides utility construction services. It offers electrical line construction, pipeline construction, inside electrical wiring and cabling, and mechanical services. The company also involves in the manufacture and distribution of specialty equipment, and electrical control panel; and installation and maintenance of automatic fire sprinkler systems in Las Vegas and Reno. The company was incorporated in 1995 and is based in Bismarck, North Dakota.
How the Company Makes MoneyEverus Construction Group, Inc. (ECG) generates revenue primarily through its construction services offered across commercial, residential, and infrastructure sectors. The company earns money by securing contracts for building and renovation projects, charging fees for project management and consulting services, and through design-build initiatives where ECG is responsible for both the design and construction of a project. The company may also form strategic partnerships with subcontractors and suppliers to optimize costs and increase project efficiency. The revenue streams are bolstered by repeat business from satisfied clients and successful bids on new projects.
Everus Construction Group, Inc. Financial Statement Overview
Summary
Everus Construction Group, Inc. exhibits stable revenue and improved profitability, with strong operational efficiency. However, the company's increased leverage and declining free cash flow growth pose potential risks. Overall, the financial health is solid, but careful management of debt levels is necessary to sustain long-term growth.Income Statement
The company shows a stable revenue trajectory with a marginal decline in 2024. Gross profit margin improved from 11.27% in 2023 to 11.91% in 2024, indicating better cost management. Net profit margin increased slightly from 4.81% to 5.03%, reflecting improved profitability. EBIT and EBITDA margins remained stable, demonstrating consistent operational efficiency.80
Positive
Balance Sheet
The debt-to-equity ratio increased from 0.50 in 2023 to 0.86 in 2024, indicating higher leverage and potential risk. Return on equity declined from 30.57% to 33.93%, showing strong profitability relative to equity. The equity ratio decreased from 40.41% to 32.79%, reflecting a higher reliance on debt financing.75
Positive
Cash Flow
Free cash flow declined from $135.75M in 2023 to $115.10M in 2024, indicating reduced cash generation. The operating cash flow to net income ratio was 1.14 in 2024, showing adequate cash flow relative to net income. However, capital expenditures increased, impacting free cash flow growth negatively.70
Positive
| Breakdown | ||
| Dec 2024 | Dec 2023 | Dec 2022 |
|---|---|---|
| Income Statement | Total Revenue | |
| 2.85B | 2.85B | 2.70B | Gross Profit |
| 339.45M | 321.92M | 276.05M | EBIT |
| 189.91M | 190.54M | 164.64M | EBITDA |
| 220.05M | 207.51M | 187.49M | Net Income Common Stockholders |
| 143.42M | 137.23M | 124.78M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |
| 86.01M | 1.57M | 2.11M | Total Assets |
| 1.29B | 1.11B | 1.14B | Total Debt |
| 363.20M | 222.18M | 305.22M | Net Debt |
| 277.19M | 220.61M | 303.11M | Total Liabilities |
| 865.85M | 661.73M | 753.34M | Stockholders Equity |
| 422.61M | 448.85M | 382.25M |
| Cash Flow | Free Cash Flow | |
| 115.10M | 135.75M | -61.34M | Operating Cash Flow |
| 163.38M | 171.34M | -25.50M | Investing Cash Flow |
| -37.06M | -19.97M | -24.57M | Financing Cash Flow |
| -41.87M | -151.91M | 51.50M |
Everus Construction Group, Inc. Risk Analysis
Everus Construction Group, Inc. disclosed 55 risk factors in its most recent earnings report. Everus Construction Group, Inc. reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Everus Construction Group, Inc. Peers Comparison
Overall Rating
UnderperformOutperform
Sector (50)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $12.28B | 26.33 | 26.35% | 0.99% | 8.89% | 669.67% | |
72 Outperform | $6.08B | 2.96 | 72.85% | ― | 5.43% | 2094.12% | |
72 Outperform | $37.69B | 42.17 | 13.32% | 0.14% | 13.36% | 20.00% | |
72 Outperform | $3.99B | 66.89 | 8.41% | ― | 22.91% | -1.39% | |
68 Neutral | $1.85B | 12.86 | 32.91% | ― | -0.16% | 4.51% | |
61 Neutral | $4.46B | 19.44 | 20.35% | ― | 12.61% | 7.43% | |
50 Neutral | $1.68B | 33.85 | -6.36% | 0.22% | 1.34% | -8297.75% |
* Services Sector Average
Performance Comparison
ECG
Everus Construction Group, Inc.
36.18
-13.82
-27.64%
ACM
Aecom Technology
92.54
-4.27
-4.41%
DY
Dycom
153.89
14.26
10.21%
FLR
Fluor
36.19
-5.60
-13.40%
PWR
Quanta Services
254.29
-4.63
-1.79%
ROAD
Construction Partners
71.33
14.85
26.29%
Everus Construction Group, Inc. Earnings Call Summary
Earnings Call Date: Feb 11, 2025 | % Change Since: -47.12% | Next Earnings Date: Apr 30, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong revenue growth and significant backlog increases, providing optimism for future prospects. However, these positives were tempered by flat EBITDA growth due to increased costs associated with becoming a standalone public company and higher capital expenditures impacting free cash flow. The outlook for 2025 remains positive, with favorable market trends expected to continue supporting growth.Highlights
Strong Revenue Growth
Fourth quarter revenue increased by 20% driven by balanced growth across diversified end markets, including a 21% increase in Electrical and Mechanical (E&M) revenues and a 15% increase in Transmission and Distribution (T&D) revenues.
Significant Backlog Growth
Total backlog at the end of the fourth quarter was $2.8 billion, up 38% from the previous year, highlighting strong customer relationships and strategic market positioning.
Solid Financial Position
Ended the year with a net leverage of 1 times, below the long-term target, providing financial flexibility for strategic growth objectives.
Positive End Market Trends
Favorable demand drivers in key end markets, such as T&D and data centers, are expected to continue benefiting the business into 2025.
Lowlights
Flat EBITDA Growth
Fourth quarter EBITDA remained relatively flat due to incremental public company stand-up costs, with EBITDA margins down 150 basis points from the previous year.
Increased Dis-Synergy Costs
The company incurred $6.3 million in incremental public company stand-up costs during the fourth quarter, impacting overall margins.
Higher CapEx and Lower Free Cash Flow
Full year CapEx increased to $48.3 million from $35 million in 2023, resulting in a decrease in free cash flow from $152 million to $129 million.
Company Guidance
During Everus Construction Group's fourth-quarter earnings call, the company provided guidance for 2025, projecting revenue to range between $3 billion and $3.1 billion and EBITDA between $210 million and $225 million. The call highlighted Everus's solid fourth-quarter performance, with a 20% increase in revenue, driven by a 21% growth in Electrical and Mechanical (E&M) revenues and a 15% rise in Transmission and Distribution (T&D) revenues. Despite the flat fourth-quarter EBITDA due to $6.3 million in public company stand-up costs, the company ended 2024 with a robust backlog of $2.8 billion, up 38% year-over-year, and a net leverage of 1.0 times, indicating significant financial flexibility. The management emphasized the impact of strong execution and disciplined financial management on their results and expressed optimism for continued growth supported by favorable market trends and strategic initiatives, including potential M&A activities.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.