As the Q3 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the construction and maintenance services industry, including APi (NYSE:APG) and its peers.
Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years–. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.
The 12 construction and maintenance services stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.
Thankfully, share prices of the companies have been resilient as they are up 6% on average since the latest earnings results.
APi (NYSE:APG)
Started in 1926 as an insulation contractor, APi (NYSE:APG) provides life safety solutions and specialty services for buildings and infrastructure.APi reported revenues of $1.83 billion, up 2.4% year on year. This print fell short of analysts’ expectations by 2.7%. Overall, it was a softer quarter for the company with a significant miss of analysts’ organic revenue estimates and full-year revenue guidance missing analysts’ expectations.
Interestingly, the stock is up 8.5% since reporting and currently trades at $36.02.
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Best Q3: Limbach (NASDAQ:LMB)
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.Limbach reported revenues of $133.9 million, up 4.8% year on year, outperforming analysts’ expectations by 3.4%. The business had a stunning quarter with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
Limbach pulled off the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 8.7% since reporting. It currently trades at $84.80.
Slowest Q3: Tutor Perini (NYSE:TPC)
Known for constructing the Philadelphia Eagles’ Stadium, Tutor Perini (NYSE:TPC) is a civil and building construction company offering diversified general contracting and design-build services.Tutor Perini reported revenues of $1.08 billion, up 2.1% year on year, falling short of analysts’ expectations by 7.2%. It was a disappointing quarter as it posted a significant miss of analysts’ EPS estimates.
Tutor Perini delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 19% since the results and currently trades at $24.54.
MYR Group (NASDAQ:MYRG)
Constructing electrical and phone lines in the American Midwest dating back to the 1890s, MYR Group (NASDAQ:MYRG) is a specialty contractor in the electrical construction industry.MYR Group reported revenues of $888 million, down 5.5% year on year. This number missed analysts’ expectations by 3.2%. Taking a step back, it was still a very strong quarter as it logged a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 30.1% since reporting and currently trades at $150.01.
Primoris (NYSE:PRIM)
Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.Primoris reported revenues of $1.65 billion, up 7.8% year on year. This result topped analysts’ expectations by 3.5%. Overall, it was a very strong quarter as it also produced a solid beat of analysts’ EBITDA estimates.
The stock is up 19.3% since reporting and currently trades at $76.80.
Market Update
Thanks to the Fed's series of rate hikes in 2022 and 2023, inflation has cooled significantly from its post-pandemic highs, drawing closer to the 2% goal. This disinflation has occurred without severely impacting economic growth, suggesting the success of a soft landing. The stock market has thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% each in November and December), and a notable surge followed Donald Trump's presidential election win in November, propelling indices to historic highs. Nonetheless, the outlook for 2025 remains clouded by the pace and magnitude of future rate cuts as well as potential changes in trade policy and corporate taxes once the Trump administration takes over. The path forward is marked by uncertainty.Want to invest in winners with rock-solid fundamentals? Check out our and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
This content was originally published on Stock Story
