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Will EMCOR's Healthcare Pipeline Support Long-Term Backlog Growth?
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Key Takeaways
EMCOR's total RPOs hit $11.75B in Q1 2025, up 17.1% organically, led by healthcare and institutional demand.
Healthcare RPOs rose to $1.5B, supported by acquisitions and consistent medical sector activity.
In Q1 2025, EMCOR's healthcare revenues nearly doubled, aided by Miller Electric's $240M backlog contribution.
EMCOR Group, Inc. (EME - Free Report) continues to benefit from strong demand across institutional markets, with healthcare construction gaining further traction. As of March 31, 2025, total remaining performance obligations (RPOs) were $11.75 billion, growing 17.1% on an organic basis. Of this, healthcare-related RPOs reached $1.5 billion, reflecting both sequential growth and contributions from recent acquisitions.
EMCOR continues to see growing opportunity in healthcare construction through its mechanical and electrical services offerings. In the first quarter of 2025, the company saw revenue growth of 10.2% and 42.3% year over year in its mechanical and electrical construction segments, respectively. This performance was supported by increased activity in several markets, including healthcare.
In the first quarter of 2025, EMCOR reported a near doubling of healthcare revenues compared with the prior-year period. This increase was supported by ongoing customer demand as well as the addition of Miller Electric, which contributed approximately $240 million to the healthcare-related backlog. The Mechanical Construction segment saw notable strength, with healthcare among the primary contributors alongside activity in network and communications, and water infrastructure.
EMCOR noted that demand from hospitals and medical systems remains solid, supporting both new construction and facility upgrade work. The company continues to emphasize disciplined execution, with prefabrication, virtual design and construction, and labor planning helping manage complex projects efficiently.
With a growing healthcare pipeline and broader institutional exposure, EMCOR appears positioned to support long-term backlog growth. Momentum in this segment, supported by both organic and acquired capabilities, continues to play a meaningful role in backlog visibility going forward.
Other Industry Players Tapping Healthcare Construction Demand
As EMCOR strengthens its position in healthcare construction, companies like Tutor Perini Corporation (TPC - Free Report) and Comfort Systems USA (FIX - Free Report) are also advancing in this growing segment.
Tutor Perini is building momentum in healthcare construction, supported by a growing pipeline of large-scale projects and steady preconstruction progress. In the first quarter of 2025, healthcare facility work advanced meaningfully, with $111 million in additional funding secured and a major $500 million California project moving into the construction phase. Another $1 billion healthcare project is expected to follow. Tutor Perini sees continued strength in institutional markets and anticipates more healthcare-related awards ahead, reinforcing backlog visibility and positioning the business for long-term growth in this sector.
Comfort Systems is also expanding its footprint in healthcare construction, aligning with sector trends that support steady, long-term demand. In the first quarter of 2025, the company noted that healthcare now represents approximately 10% of business, with the dollar value of activity rising alongside it. Institutional markets, including healthcare, education and government, contributed 24% of total revenues during the period, backed by stable demand and large, complex bookings. Comfort Systems’ depth of skilled labor and national scale position it well to capture healthcare-related mechanical and electrical contracts that require experienced teams and strong balance sheet capabilities.
EME stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings ratio of 22.64X.
Image Source: Zacks Investment Research
EMCOR’s earnings estimates for 2025 and 2026 have remained unchanged over the past 30 days at $23.59 and $25.47 per share, respectively. These projections imply year-over-year growth of 9.6% for 2025 and 8% for 2026.
Image: Bigstock
Will EMCOR's Healthcare Pipeline Support Long-Term Backlog Growth?
Key Takeaways
EMCOR Group, Inc. (EME - Free Report) continues to benefit from strong demand across institutional markets, with healthcare construction gaining further traction. As of March 31, 2025, total remaining performance obligations (RPOs) were $11.75 billion, growing 17.1% on an organic basis. Of this, healthcare-related RPOs reached $1.5 billion, reflecting both sequential growth and contributions from recent acquisitions.
EMCOR continues to see growing opportunity in healthcare construction through its mechanical and electrical services offerings. In the first quarter of 2025, the company saw revenue growth of 10.2% and 42.3% year over year in its mechanical and electrical construction segments, respectively. This performance was supported by increased activity in several markets, including healthcare.
In the first quarter of 2025, EMCOR reported a near doubling of healthcare revenues compared with the prior-year period. This increase was supported by ongoing customer demand as well as the addition of Miller Electric, which contributed approximately $240 million to the healthcare-related backlog. The Mechanical Construction segment saw notable strength, with healthcare among the primary contributors alongside activity in network and communications, and water infrastructure.
EMCOR noted that demand from hospitals and medical systems remains solid, supporting both new construction and facility upgrade work. The company continues to emphasize disciplined execution, with prefabrication, virtual design and construction, and labor planning helping manage complex projects efficiently.
With a growing healthcare pipeline and broader institutional exposure, EMCOR appears positioned to support long-term backlog growth. Momentum in this segment, supported by both organic and acquired capabilities, continues to play a meaningful role in backlog visibility going forward.
Other Industry Players Tapping Healthcare Construction Demand
As EMCOR strengthens its position in healthcare construction, companies like Tutor Perini Corporation (TPC - Free Report) and Comfort Systems USA (FIX - Free Report) are also advancing in this growing segment.
Tutor Perini is building momentum in healthcare construction, supported by a growing pipeline of large-scale projects and steady preconstruction progress. In the first quarter of 2025, healthcare facility work advanced meaningfully, with $111 million in additional funding secured and a major $500 million California project moving into the construction phase. Another $1 billion healthcare project is expected to follow. Tutor Perini sees continued strength in institutional markets and anticipates more healthcare-related awards ahead, reinforcing backlog visibility and positioning the business for long-term growth in this sector.
Comfort Systems is also expanding its footprint in healthcare construction, aligning with sector trends that support steady, long-term demand. In the first quarter of 2025, the company noted that healthcare now represents approximately 10% of business, with the dollar value of activity rising alongside it. Institutional markets, including healthcare, education and government, contributed 24% of total revenues during the period, backed by stable demand and large, complex bookings. Comfort Systems’ depth of skilled labor and national scale position it well to capture healthcare-related mechanical and electrical contracts that require experienced teams and strong balance sheet capabilities.
EME’s Price Performance, Valuation and Estimates
EMCOR’s shares have risen 42.8% in the past three months compared with the Zacks Building Products - Heavy Construction industry’s 39.8% growth.
Image Source: Zacks Investment Research
EME stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings ratio of 22.64X.
Image Source: Zacks Investment Research
EMCOR’s earnings estimates for 2025 and 2026 have remained unchanged over the past 30 days at $23.59 and $25.47 per share, respectively. These projections imply year-over-year growth of 9.6% for 2025 and 8% for 2026.
Image Source: Zacks Investment Research
EMCOR currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.