Let's dig into the relative performance of Matrix Service (NASDAQ:MTRX) and its peers as we unravel the now-completed Q1 construction and maintenance services earnings season.
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 10 construction and maintenance services stocks we track reported an ok Q1; on average, revenues were in line with analyst consensus estimates. Stocks--especially those trading at higher multiples--had a strong end of 2023, but 2024 has seen periods of volatility. Mixed signals about inflation have led to uncertainty around rate cuts, but construction and maintenance services stocks have performed well, with the share prices up 12.1% on average since the previous earnings results.
Weakest Q1: Matrix Service (NASDAQ:MTRX) Founded in Oklahoma, Matrix Service Company (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $166 million, down 11.2% year on year, falling short of analysts' expectations by 15%. Overall, it was a weak quarter for the company with a miss of analysts' earnings estimates.
“Bidding activity remained strong across our end-markets during the third quarter, driven by multi-year tailwinds that continue to support backlog growth within our core storage, terminal, utility and power infrastructure markets,” said John R. Hewitt, President and Chief Executive Officer.
Matrix Service delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. The stock is down 15.6% since reporting and currently trades at $10.
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Best Q1: Comfort Systems (NYSE:FIX) Having historically grown through organic means as well as acquisitions of numerous peers and competitors, Comfort Systems USA (NYSE:FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $1.54 billion, up 30.8% year on year, outperforming analysts' expectations by 4.8%. It was an incredible quarter for the company with an impressive beat of analysts' backlog sales and earnings estimates.
Comfort Systems pulled off the fastest revenue growth among its peers. The market seems content with the results as the stock is up 3.6% since reporting. It currently trades at $322.76.
Granite Construction (NYSE:GVA) Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Granite Construction reported revenues of $672.3 million, up 20% year on year, in line with analysts' expectations. It was a weak quarter for the company with a miss of analysts' earnings estimates.
Interestingly, the stock is up 18.3% since the results and currently trades at $64.98.
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 $1.41 billion, up 12.4% year on year, surpassing analysts' expectations by 1.9%. Taking a step back, it was an ok quarter for the company with an impressive beat of analysts' earnings estimates but a miss of analysts' backlog sales estimates.
The stock is up 9% since reporting and currently trades at $52.12.
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 $1.60 billion, flat year on year, in line with analysts' expectations. Overall, it was a weaker quarter for the company with a miss of analysts' organic revenue estimates.
The stock is flat since reporting and currently trades at $37.79.
This content was originally published on Stock Story
