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EMCOR Stock Down 10% Post Q3 Results: Should You Buy the Dip?
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Key Takeaways
EMCOR's shares fell after Q3 earnings and revenues came in below expectations.
EME posted year-over-year gains, led by strong Electrical and Mechanical Construction demand.
Record RPOs of $12.61B reflect broad growth across key sectors and support improved visibility.
EMCOR Group, Inc. (EME - Free Report) reported its third-quarter 2025 results on Oct. 30, with both earnings and revenues missing the Zacks Consensus Estimate. Following the release, the stock has fallen 10%, lagging the Zacks Building Products - Heavy Construction and the S&P 500 index.
Although the quarter came in below expectations, EMCOR still posted solid year-over-year growth across several key financial metrics. Adjusted EPS increased to $6.57 from $5.80 in the prior-year quarter, while revenues rose 16% to $4.3 billion, supported by strong execution in both Electrical and Mechanical Construction. Electrical activity remained robust, helped by contributions from the Miller acquisition and strong demand in Network & Communications, while Mechanical Construction continued to benefit from ongoing data center builds and improving trends in manufacturing and industrial markets.
Image Source: Zacks Investment Research
What key factors should investors should consider to determine whether the dip presents an attractive investment opportunity?
Broad-Based Strength Across EMCOR’s Core Construction Markets
Construction activity across data centers, health care, manufacturing and transportation remains healthy, supporting solid momentum for EME in both Electrical and Mechanical Construction. The company is benefiting from effective labor planning and the use of VDC, BIM and prefabrication tools, which support efficient execution across major markets.
In the third quarter of 2025, nearly all major market sectors showed growth within the U.S. Electrical and Mechanical Construction segments. Electrical Construction revenues rose 52.1%, supported by a combination of organic growth and the Miller Electric acquisition, with Network & Communications revenues rising nearly 70%. Mechanical Construction revenues reached $1.78 billion, up 7%, driven by strong data center activity and strengthening demand in manufacturing and industrial markets. These trends contributed to steady performance across both segments.
The company anticipates that healthcare, traditional manufacturing, water/wastewater and commercial retrofit work will remain strong contributors. EMCOR plans to further deepen its presence in these sectors through targeted resource allocation and selective M&A.
EME’s Record RPOs Signal Strong Market Visibility
EMCOR’s long-term visibility is supported by a robust backlog of contracted work spread across multiple end markets. A strong RPO base provides revenue stability, improved planning capability and the flexibility to allocate labor and resources toward the most attractive opportunities.
In the third quarter, EMCOR reported record RPO levels, reflecting broad-based growth across Network & Communications, healthcare, manufacturing and water/wastewater. RPOs, as of Sept. 30, 2025, increased year over year to $12.61 billion from $9.79 billion. Network & Communications contributed the most, nearly doubling year over year, while healthcare and manufacturing benefited from expanded opportunities tied to acquisitions and onshoring trends. Water and wastewater RPOs also saw meaningful increases from project wins in Florida.
Based on the momentum seen so far this year, the company raised its full-year outlook for revenues. Going forward, the company expects RPO momentum to continue, supported by strong secular drivers across data centers, healthcare, manufacturing and infrastructure. With a growing mix of multi-year projects, EMCOR anticipates improved revenue visibility and steady burn-through in 2026 and beyond.
EMCOR’s Expanding Prefabrication and Productivity Initiatives
EMCOR’s longstanding focus on productivity, supported by VDC, BIM and prefabrication, strengthens execution consistency across large, complex projects. These capabilities enhance labor efficiency, reduce on-site risk and make project delivery more predictable.
The company continued to invest in prefabrication capacity, workforce expansion and VDC tools, which contributed to strong productivity levels even as project sizes scaled up. The company noted that man-hours are growing significantly slower than revenues, reflecting improved labor efficiency. Although there were temporary start-up inefficiencies in certain new markets, underlying project execution remained solid across most segments.
EMCOR expects productivity to improve further as prefabrication footprint expands and newer data center and industrial markets mature. The company anticipates that these capabilities will support healthier margins, better labor utilization and stronger competitiveness in high-demand sectors.
Taking a Look at EMCOR Stock’s Valuation
From a valuation standpoint, the company is currently trading at a premium relative to the industry and the broader Zacks Construction sector, with a forward 12-month price-to-earnings (P/E) ratio of 21.46X, as evidenced by the chart below.
Image Source: Zacks Investment Research
However, EME is trading at a discount compared with some of its industry peers, such as Quanta Services (PWR - Free Report) , Comfort Systems USA (FIX - Free Report) and MasTec, Inc. (MTZ - Free Report) . Quanta, Comfort Systems and MasTec trade at 35.4X, 29.1X and 24.4X, respectively.
Earnings Estimate Trend Favors EME
EMCOR’s earnings estimates for 2025 and 2026 have trended upward over the past 30 days to $25.24 and $27.41 per share, respectively. The estimated figures for 2025 and 2026 imply year-over-year growth of 17.3% and 8.6%, respectively.
Image Source: Zacks Investment Research
Conversely, Quanta, Comfort Systems and MasTec’s earnings in the current year are likely to witness year-over-year increases of 17.8%, 80.2% and 60.8%, respectively.
Why EME Stock Is a Buy for Now?
EMCOR’s post-earnings pullback comes despite improving fundamentals across construction markets, record RPO visibility and ongoing gains from productivity and prefabrication initiatives. The company has also seen positive earnings estimate revisions in recent weeks, reflecting steady confidence in its long-term growth prospects. While EMCOR trades at a premium to the broader construction sector, its valuation remains reasonable relative to leading peers, especially considering the expanding pipeline and disciplined execution.
With these factors in place, this Zacks Rank #2 (Buy) company continues to demonstrate a strong operational and financial foundation. For investors, the current dip may offer an opportunity to accumulate shares in a high-quality operator with healthy end-market demand, rising earnings expectations and solid project visibility.
Image: Shutterstock
EMCOR Stock Down 10% Post Q3 Results: Should You Buy the Dip?
Key Takeaways
EMCOR Group, Inc. (EME - Free Report) reported its third-quarter 2025 results on Oct. 30, with both earnings and revenues missing the Zacks Consensus Estimate. Following the release, the stock has fallen 10%, lagging the Zacks Building Products - Heavy Construction and the S&P 500 index.
Although the quarter came in below expectations, EMCOR still posted solid year-over-year growth across several key financial metrics. Adjusted EPS increased to $6.57 from $5.80 in the prior-year quarter, while revenues rose 16% to $4.3 billion, supported by strong execution in both Electrical and Mechanical Construction. Electrical activity remained robust, helped by contributions from the Miller acquisition and strong demand in Network & Communications, while Mechanical Construction continued to benefit from ongoing data center builds and improving trends in manufacturing and industrial markets.
Image Source: Zacks Investment Research
What key factors should investors should consider to determine whether the dip presents an attractive investment opportunity?
Broad-Based Strength Across EMCOR’s Core Construction Markets
Construction activity across data centers, health care, manufacturing and transportation remains healthy, supporting solid momentum for EME in both Electrical and Mechanical Construction. The company is benefiting from effective labor planning and the use of VDC, BIM and prefabrication tools, which support efficient execution across major markets.
In the third quarter of 2025, nearly all major market sectors showed growth within the U.S. Electrical and Mechanical Construction segments. Electrical Construction revenues rose 52.1%, supported by a combination of organic growth and the Miller Electric acquisition, with Network & Communications revenues rising nearly 70%. Mechanical Construction revenues reached $1.78 billion, up 7%, driven by strong data center activity and strengthening demand in manufacturing and industrial markets. These trends contributed to steady performance across both segments.
The company anticipates that healthcare, traditional manufacturing, water/wastewater and commercial retrofit work will remain strong contributors. EMCOR plans to further deepen its presence in these sectors through targeted resource allocation and selective M&A.
EME’s Record RPOs Signal Strong Market Visibility
EMCOR’s long-term visibility is supported by a robust backlog of contracted work spread across multiple end markets. A strong RPO base provides revenue stability, improved planning capability and the flexibility to allocate labor and resources toward the most attractive opportunities.
In the third quarter, EMCOR reported record RPO levels, reflecting broad-based growth across Network & Communications, healthcare, manufacturing and water/wastewater. RPOs, as of Sept. 30, 2025, increased year over year to $12.61 billion from $9.79 billion. Network & Communications contributed the most, nearly doubling year over year, while healthcare and manufacturing benefited from expanded opportunities tied to acquisitions and onshoring trends. Water and wastewater RPOs also saw meaningful increases from project wins in Florida.
Based on the momentum seen so far this year, the company raised its full-year outlook for revenues. Going forward, the company expects RPO momentum to continue, supported by strong secular drivers across data centers, healthcare, manufacturing and infrastructure. With a growing mix of multi-year projects, EMCOR anticipates improved revenue visibility and steady burn-through in 2026 and beyond.
EMCOR’s Expanding Prefabrication and Productivity Initiatives
EMCOR’s longstanding focus on productivity, supported by VDC, BIM and prefabrication, strengthens execution consistency across large, complex projects. These capabilities enhance labor efficiency, reduce on-site risk and make project delivery more predictable.
The company continued to invest in prefabrication capacity, workforce expansion and VDC tools, which contributed to strong productivity levels even as project sizes scaled up. The company noted that man-hours are growing significantly slower than revenues, reflecting improved labor efficiency. Although there were temporary start-up inefficiencies in certain new markets, underlying project execution remained solid across most segments.
EMCOR expects productivity to improve further as prefabrication footprint expands and newer data center and industrial markets mature. The company anticipates that these capabilities will support healthier margins, better labor utilization and stronger competitiveness in high-demand sectors.
Taking a Look at EMCOR Stock’s Valuation
From a valuation standpoint, the company is currently trading at a premium relative to the industry and the broader Zacks Construction sector, with a forward 12-month price-to-earnings (P/E) ratio of 21.46X, as evidenced by the chart below.
Image Source: Zacks Investment Research
However, EME is trading at a discount compared with some of its industry peers, such as Quanta Services (PWR - Free Report) , Comfort Systems USA (FIX - Free Report) and MasTec, Inc. (MTZ - Free Report) . Quanta, Comfort Systems and MasTec trade at 35.4X, 29.1X and 24.4X, respectively.
Earnings Estimate Trend Favors EME
EMCOR’s earnings estimates for 2025 and 2026 have trended upward over the past 30 days to $25.24 and $27.41 per share, respectively. The estimated figures for 2025 and 2026 imply year-over-year growth of 17.3% and 8.6%, respectively.
Image Source: Zacks Investment Research
Conversely, Quanta, Comfort Systems and MasTec’s earnings in the current year are likely to witness year-over-year increases of 17.8%, 80.2% and 60.8%, respectively.
Why EME Stock Is a Buy for Now?
EMCOR’s post-earnings pullback comes despite improving fundamentals across construction markets, record RPO visibility and ongoing gains from productivity and prefabrication initiatives. The company has also seen positive earnings estimate revisions in recent weeks, reflecting steady confidence in its long-term growth prospects. While EMCOR trades at a premium to the broader construction sector, its valuation remains reasonable relative to leading peers, especially considering the expanding pipeline and disciplined execution.
With these factors in place, this Zacks Rank #2 (Buy) company continues to demonstrate a strong operational and financial foundation. For investors, the current dip may offer an opportunity to accumulate shares in a high-quality operator with healthy end-market demand, rising earnings expectations and solid project visibility.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.