The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Matrix Service (NASDAQ: MTRX) and the rest of the construction and maintenance services stocks fared in Q4.
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 13 construction and maintenance services stocks we track reported a mixed Q4. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 12.1% since the latest earnings results.
Matrix Service (NASDAQ: MTRX)
Founded in Oklahoma, Matrix Service (NASDAQ: MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $187.2 million, up 6.9% year on year. This print exceeded analysts’ expectations by 1.1%. Despite the top-line beat, it was still a mixed quarter for the company with an impressive beat of analysts’ EBITDA estimates but full-year revenue guidance missing analysts’ expectations.
“We continued to execute on our diverse backlog of large, multi-year projects during the second quarter, culminating in sustained organic revenue growth in the period,” said John Hewitt, President and Chief Executive Officer of Matrix Service Company.
Unsurprisingly, the stock is down 28.7% since reporting and currently trades at $10.01.
Is now the time to buy Matrix Service? Access our full analysis of the earnings results here, it’s free.
Best Q4: Construction Partners (NASDAQ: ROAD)
Founded in 2001, Construction Partners (NASDAQ: ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Construction Partners reported revenues of $561.6 million, up 41.6% year on year, outperforming analysts’ expectations by 9.7%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Construction Partners delivered the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. The stock is down 6.5% since reporting. It currently trades at $79.23.
Is now the time to buy Construction Partners? Access our full analysis of the earnings results here, it’s free.
Weakest Q4: Concrete Pumping (NASDAQ: BBCP)
Going public via SPAC in 2018, Concrete Pumping (NASDAQ: BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Concrete Pumping reported revenues of $86.45 million, down 11.5% year on year, falling short of analysts’ expectations by 4.8%. It was a disappointing quarter as it posted a significant miss of analysts’ adjusted operating income estimates.
As expected, the stock is down 6.4% since the results and currently trades at $5.66.
Read our full analysis of Concrete Pumping’s results here.
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 $829.8 million, down 17.4% year on year. This number lagged analysts' expectations by 6.6%. Taking a step back, it was a satisfactory quarter as it also recorded an impressive beat of analysts’ EPS estimates but a miss of analysts’ backlog estimates.
MYR Group had the slowest revenue growth among its peers. The stock is down 10.7% since reporting and currently trades at $112.39.
Read our full, actionable report on MYR Group here, it’s free.
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 $977.3 million, up 4.7% year on year. This print beat analysts’ expectations by 2.8%. However, it was a slower quarter as it logged a significant miss of analysts’ adjusted operating income estimates and a significant miss of analysts’ EBITDA estimates.
The stock is down 11% since reporting and currently trades at $77.17.
Read our full, actionable report on Granite Construction here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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