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EMCOR Group, Inc. (EME) Hit a 52 Week High, Can the Run Continue?
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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 33.4% over the past month. The stock hit a new 52-week high of $347.47 in the previous session. Emcor Group has gained 60.6% since the start of the year compared to the 14.3% move for the Zacks Construction sector and the 36.6% 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 has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
EMCOR Group has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 14.9X. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 10X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, EMCOR Group currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
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 fits the bill. 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 B, 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 $2.68 per share on revenue of $12.56 billion.
Shares of MasTec, Inc. have gained 25.7% over the past month, and currently trade at a forward P/E of 33.91X and a P/CF of 9.75X.
The Building Products - Heavy Construction industry is in the top 38% 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) Hit a 52 Week High, Can the Run Continue?
Have you been paying attention to shares of Emcor Group (EME - Free Report) ? Shares have been on the move with the stock up 33.4% over the past month. The stock hit a new 52-week high of $347.47 in the previous session. Emcor Group has gained 60.6% since the start of the year compared to the 14.3% move for the Zacks Construction sector and the 36.6% 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 has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
EMCOR Group has a Value Score of D. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.9X current fiscal year EPS estimates, which is a premium to the peer industry average of 14.9X. On a trailing cash flow basis, the stock currently trades at 21.6X versus its peer group's average of 10X. 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 look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, EMCOR Group currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
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 fits the bill. 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 B, 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 $2.68 per share on revenue of $12.56 billion.
Shares of MasTec, Inc. have gained 25.7% over the past month, and currently trade at a forward P/E of 33.91X and a P/CF of 9.75X.
The Building Products - Heavy Construction industry is in the top 38% 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.