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EMCOR Group (EME)
NYSE:EME
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EMCOR Group
(NYSE:EME)77Outperform
Positive Factors
Market Expansion
EME has leveraged its competitive positioning as a market share leader in mechanical and electrical contracting to expand its presence in the highest growth pockets of private-non residential construction.
Operational Efficiency
EMCOR Group, Inc. has shown productivity gains, margin expansion, and a strong track record in value-added mergers and acquisitions.
Sector Performance
EME’s high tech manufacturing and data centers end markets are up 63% year over year combined.
Negative Factors
Economic Outlook
EME faces a challenging cyclical backdrop in the medium term with EBIT margin leading indicators turning lower.
Growth Forecast
The EBITDA growth forecast is at the bottom quartile of the coverage, with estimates below consensus for 2025-2026.
Valuation
Valuation is over 2 standard deviations above the historical average, indicating an unfavorable risk/reward skew.
EMCOR Group (EME) vs. S&P 500 (SPY)
Market Cap
$17.99B
Dividend Yield0.25%
Average Volume (3M)572.96K
Price to Earnings (P/E)18.4
Beta (1Y)1.41
Revenue Growth15.76%
EPS Growth61.64%
CountryUS
Employees38,300
SectorIndustrials
Sector Strength66
IndustryConstruction
Share Statistics
EPS (TTM)21.54
Shares Outstanding45,472,622
10 Day Avg. Volume650,044
30 Day Avg. Volume572,956
Financial Highlights & Ratios
PEG Ratio0.30
Price to Book (P/B)N/A
Price to Sales (P/S)1.24
Price to Cash Flow (P/CF)9.60
P/FCF Ratio9.20
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$514.00Price Target Upside32.45% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EMCOR Group Business Overview & Revenue Model
Company DescriptionEMCOR Group, Inc. engages in the provision of electrical and mechanical construction and facilities services. It operates through the following segments: Unites States Electrical Construction and Facilities Services; United States Mechanical Construction and Facilities Services; United States Building Services; United States Industrial Services; and United Kingdom Building Services. The Unites States Electrical Construction and Facilities Services segment offers systems for electrical power transmission and distribution. The United States Mechanical Construction and Facilities Services segment involves systems for heating, ventilation, air conditioning, refrigeration, and clean-room process ventilation. The United States Building Services segment consists of those operations which provide a portfolio of services needed to support the operation and maintenance of customers' facilities. The United States Industrial Services segment covers operations which provide industrial maintenance and services. The United Kingdom Building Services comprises of commercial and government site-based operations and maintenance; and facility maintenance and services. The company was founded in 1987 and is headquartered in Norwalk, CT.
How the Company Makes MoneyEMCOR Group makes money through its diversified service offerings in the construction and facilities services sectors. The company's revenue model is primarily based on contractual agreements for both project-based and ongoing services. Key revenue streams include mechanical and electrical construction services, where EMCOR designs and installs complex systems, and facilities services, which encompass maintenance, repair, and operations for client facilities. Additionally, EMCOR benefits from long-term service contracts and partnerships with prominent companies across various industries, ensuring a steady flow of income. The company's strategic focus on infrastructure and energy-efficient solutions also plays a significant role in its earnings by aligning with growing market demands.
EMCOR Group Financial Statement Overview
Summary
EMCOR Group demonstrates strong financial performance with significant revenue growth and improved profit margins. The balance sheet is robust, with low leverage and strong equity, while cash flow generation is impressive, indicating excellent liquidity and cash management.Income Statement
EMCOR Group's income statement exhibits strong performance with consistent revenue growth from $8.8 billion in 2020 to $14.6 billion in 2024. The gross profit margin and net profit margin have improved, indicating enhanced efficiency and profitability. The EBIT and EBITDA margins are solid, reflecting effective cost management. Overall, the company shows excellent growth and profitability trajectory.92
Very Positive
Balance Sheet
The balance sheet of EMCOR Group is robust with a healthy equity ratio and improving return on equity, which was 34.28% for 2024. The debt-to-equity ratio is low at 0.24, indicating conservative leverage. The company's financial stability is strong, supported by a solid equity base and manageable debt levels. This reflects good financial management and strong asset utilization.87
Very Positive
Cash Flow
EMCOR Group has demonstrated strong cash flow generation, with operating cash flow increasing significantly over the years. The free cash flow to net income ratio is favorable, indicating efficient cash conversion. The company's free cash flow growth rate is impressive, contributing to its liquidity and ability to fund operations and investments. Overall, the cash flow statement reflects strong liquidity and cash management.89
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 14.57B | 12.58B | 11.08B | 9.90B | 8.80B | Gross Profit |
| 2.77B | 2.09B | 1.60B | 1.50B | 1.40B | EBIT |
| 1.34B | 875.76M | 564.88M | 530.80M | 494.78M | EBITDA |
| 1.51B | 1.01B | 682.40M | 646.86M | 601.45M | Net Income Common Stockholders |
| 1.01B | 632.99M | 406.12M | 383.53M | 132.94M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 1.34B | 789.75M | 456.44M | 821.35M | 902.87M | Total Assets |
| 7.72B | 6.61B | 5.52B | 5.44B | 5.06B | Total Debt |
| 705.16M | 339.97M | 535.17M | 540.34M | 535.52M | Net Debt |
| -634.39M | -449.78M | 78.73M | -281.01M | -367.34M | Total Liabilities |
| 4.78B | 4.14B | 3.55B | 3.19B | 3.01B | Stockholders Equity |
| 2.94B | 2.47B | 1.97B | 2.25B | 2.05B |
| Cash Flow | Free Cash Flow | |||
| 1.33B | 821.25M | 448.64M | 282.63M | 758.40M | Operating Cash Flow |
| 1.41B | 899.65M | 497.93M | 318.82M | 806.37M | Investing Cash Flow |
| -299.28M | -161.29M | -140.80M | -153.08M | -94.86M | Financing Cash Flow |
| -555.37M | -412.05M | -710.12M | -245.46M | -171.91M |
EMCOR Group Technical Analysis
Negative
388.08
Price Trends
455.43
Negative
467.15
Negative
424.10
Negative
Market Momentum
-18.85
Positive
34.78
Neutral
28.71
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For EME, the sentiment is Negative. The current price of 388.08 is below the 20-day moving average (MA) of 426.71, below the 50-day MA of 455.43, and below the 200-day MA of 424.10, indicating a bearish trend. The MACD of -18.85 indicates Positive momentum. The RSI at 34.78 is Neutral, neither overbought nor oversold. The STOCH value of 28.71 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for EME.
EMCOR Group Risk Analysis
EMCOR Group disclosed 34 risk factors in its most recent earnings report. EMCOR Group 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
EMCOR Group Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $17.99B | 18.39 | 34.28% | 0.25% | 15.76% | 61.64% | |
74 Outperform | $3.46B | 33.07 | 12.45% | 0.64% | 14.20% | 191.86% | |
73 Outperform | $6.40B | 17.31 | 25.81% | 1.24% | 11.30% | ― | |
71 Outperform | $12.29B | 23.66 | 30.65% | 0.35% | 34.97% | 62.08% | |
66 Neutral | $6.06B | 2.94 | 54.32% | ― | 5.43% | 2094.12% | |
62 Neutral | $15.04B | 25.28 | 14.66% | 0.95% | -13.76% | -13.39% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
EME
EMCOR Group
388.08
63.14
19.43%
FIX
Comfort Systems
339.17
26.73
8.56%
FLR
Fluor
35.93
-0.75
-2.04%
GVA
Granite Construction
79.57
27.31
52.26%
J
Jacobs Solutions
122.72
1.10
0.90%
KBR
KBR
49.34
-11.78
-19.27%
EMCOR Group Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: -2.50% | Next Earnings Date: Apr 24, 2025
Earnings Call Sentiment Positive
EMCOR Group experienced a strong 2024 with record financial performance, significant revenue growth, successful acquisitions, and substantial returns to shareholders. However, the company also faced challenges related to supply chain issues, competition, and potential macroeconomic and tariff-related risks. Despite these challenges, the company's strategic acquisitions and strong market demand, particularly in construction segments, position it well for future growth.Highlights
Record Performance in Q4 2024
Q4 2024 saw record performance across financial metrics including diluted EPS of $6.32, operating income of $389 million, and revenues of $3.77 billion, marking a 9.6% year-over-year increase.
Full Year 2024 Financial Achievements
For 2024, revenues reached $14.6 billion, a 15.8% increase year-over-year, with diluted EPS of $21.52 and operating income of $1.3 billion.
RPO Growth
EMCOR exited 2024 with RPO growth of 14%, totaling $10.1 billion, with the recent Miller acquisition adding $700 million to RPOs.
Successful Acquisition Strategy
Completed seven acquisitions in 2024 totaling $230 million, enhancing growth and diversification, with the notable acquisition of Miller Electric Company.
Strong Performance in Construction Segments
US Electrical and Mechanical Construction segments saw revenue increases of 22% and 12.8%, respectively, driven by strong demand in data centers and healthcare.
Shareholder Returns
Returned $43 million in dividends and $500 million in share repurchases to shareholders in 2024.
Lowlights
Supply Chain and Competition Challenges
Faced ongoing supply chain issues and intense competition in US and UK site-based services.
Decline in US Building Services Revenue
US Building Services saw a 5.8% revenue decrease due to the nonrenewal of certain facilities maintenance contracts.
Industrial Services Margin Decline
Industrial Services experienced a decrease in operating income and margin, despite revenue growth.
Potential Macro and Tariff Challenges
Anticipates macroeconomic challenges and potential tariff impacts in 2025, which could affect costs and operations.
Company Guidance
During the EMCOR Group, Inc. fourth quarter and full year 2024 earnings call, the company provided robust guidance for 2025, projecting revenues between $16.1 billion and $16.9 billion, inclusive of their recent acquisition of Miller Electric Company. Despite challenges such as ongoing supply chain issues and potential macroeconomic headwinds, EMCOR anticipates diluted earnings per share to range from $22.25 to $24.00. The company reported record performance in 2024 with a 15.8% year-over-year revenue growth to $14.6 billion, while diluted earnings per share increased to $21.52. Operating income reached $1.3 billion, with an operating margin of 9.2% and operating cash flow totaling $1.4 billion. For the fourth quarter of 2024 alone, EMCOR achieved $3.77 billion in revenues with a 9.6% year-over-year increase, alongside a 10.3% operating margin. The company also highlighted its strong balance sheet, with RPOs growing 14% year over year to $10.1 billion, and emphasized its disciplined capital allocation strategy, including $230 million spent on acquisitions and $543 million returned to shareholders through dividends and share repurchases.EMCOR Group Corporate Events
Executive/Board Changes
EMCOR Group Expands Board with New Director
Positive
Dec 19, 2024
EMCOR Group, Inc. announced the election of Amy E. Dahl to its Board of Directors, effective December 18, 2024. With her extensive experience in strategic, legal, and operational leadership from her roles in the construction and outdoor environment solutions sector, Dahl is expected to significantly contribute to EMCOR’s strategic growth and value delivery for shareholders.
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.