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EMCOR Group, Inc. (EME) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Emcor Group (EME - Free Report) ? Shares have been on the move with the stock up 36% over the past month. The stock hit a new 52-week high of $321.16 in the previous session. Emcor Group has gained 48.5% since the start of the year compared to the 10.3% move for the Zacks Construction sector and the 27% return for the Zacks Building Products - Heavy Construction industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 28, 2024, Emcor Group reported EPS of $4.47 versus consensus estimate of $3.51 while it beat the consensus revenue estimate by 5.56%.
Valuation Metrics
Emcor Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Emcor Group has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates, which is a premium to the peer industry average of 15.2X. On a trailing cash flow basis, the stock currently trades at 20X versus its peer group's average of 9.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Emcor Group currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Emcor Group meets the list of requirements. Thus, it seems as though Emcor Group shares could have a bit more room to run in the near term.
How Does EME Stack Up to the Competition?
Shares of EME have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is MasTec, Inc. (MTZ - Free Report) . MTZ has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. MasTec, Inc. beat our consensus estimate by 46.67%, and for the current fiscal year, MTZ is expected to post earnings of $2.43 per share on revenue of $12.41 billion.
Shares of MasTec, Inc. have gained 20% over the past month, and currently trade at a forward P/E of 34.95X and a P/CF of 9.12X.
The Building Products - Heavy Construction industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EME and MTZ, even beyond their own solid fundamental situation.
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EMCOR Group, Inc. (EME) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Emcor Group (EME - Free Report) ? Shares have been on the move with the stock up 36% over the past month. The stock hit a new 52-week high of $321.16 in the previous session. Emcor Group has gained 48.5% since the start of the year compared to the 10.3% move for the Zacks Construction sector and the 27% return for the Zacks Building Products - Heavy Construction industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 28, 2024, Emcor Group reported EPS of $4.47 versus consensus estimate of $3.51 while it beat the consensus revenue estimate by 5.56%.
Valuation Metrics
Emcor Group may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Emcor Group has a Value Score of C. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 24X current fiscal year EPS estimates, which is a premium to the peer industry average of 15.2X. On a trailing cash flow basis, the stock currently trades at 20X versus its peer group's average of 9.1X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Emcor Group currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Emcor Group meets the list of requirements. Thus, it seems as though Emcor Group shares could have a bit more room to run in the near term.
How Does EME Stack Up to the Competition?
Shares of EME have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is MasTec, Inc. (MTZ - Free Report) . MTZ has a Zacks Rank of # 2 (Buy) and a Value Score of B, a Growth Score of A, and a Momentum Score of F.
Earnings were strong last quarter. MasTec, Inc. beat our consensus estimate by 46.67%, and for the current fiscal year, MTZ is expected to post earnings of $2.43 per share on revenue of $12.41 billion.
Shares of MasTec, Inc. have gained 20% over the past month, and currently trade at a forward P/E of 34.95X and a P/CF of 9.12X.
The Building Products - Heavy Construction industry is in the top 33% of all the industries we have in our universe, so it looks like there are some nice tailwinds for EME and MTZ, even beyond their own solid fundamental situation.