Earnings results often indicate what direction a company will take in the months ahead. With Q3 behind us, let’s have a look at Construction Partners (NASDAQ: ROAD) 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 strong Q3. As a group, revenues beat analysts’ consensus estimates by 2.7% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 7.4% on average since the latest earnings results.
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 $899.8 million, up 67.2% year on year. This print was in line with analysts’ expectations, but overall, it was a mixed quarter for the company with full-year EBITDA guidance beating analysts’ expectations but a significant miss of analysts’ organic revenue estimates.
Construction Partners pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 6.6% since reporting and currently trades at $111.03.
Is now the time to buy Construction Partners? Access our full analysis of the earnings results here, it’s free for active Edge members.
Best Q3: Comfort Systems (NYSE: FIX)
Formed through the merger of 12 companies, Comfort Systems (NYSE: FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $2.45 billion, up 35.2% year on year, outperforming analysts’ expectations by 13.2%. The business had an incredible quarter with a solid beat of analysts’ backlog estimates and a beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 23.9% since reporting. It currently trades at $1,023.
Is now the time to buy Comfort Systems? Access our full analysis of the earnings results here, it’s free for active Edge members.
Weakest Q3: WillScot Mobile Mini (NASDAQ: WSC)
Originally focusing on mobile offices for construction sites, WillScot (NASDAQ: WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
WillScot Mobile Mini reported revenues of $566.8 million, down 5.8% year on year, falling short of analysts’ expectations by 2.3%. It was a softer quarter as it posted a miss of analysts’ Delivery and Installation revenue estimates and revenue guidance for next quarter missing analysts’ expectations significantly.
WillScot Mobile Mini delivered the slowest revenue growth in the group. Interestingly, the stock is up 9.4% since the results and currently trades at $21.38.
Read our full analysis of WillScot Mobile Mini’s results here.
Limbach (NASDAQ: LMB)
Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.
Limbach reported revenues of $184.6 million, up 37.8% year on year. This result was in line with analysts’ expectations. Zooming out, it was a mixed quarter as it also logged full-year EBITDA guidance slightly topping analysts’ expectations but a miss of analysts’ EBITDA estimates.
Limbach pulled off the highest full-year guidance raise among its peers. The stock is down 15.6% since reporting and currently trades at $76.64.
Read our full, actionable report on Limbach here, it’s free for active Edge members.
Great Lakes Dredge & Dock (NASDAQ: GLDD)
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ: GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Great Lakes Dredge & Dock reported revenues of $195.2 million, up 2.1% year on year. This number missed analysts’ expectations by 3%. Taking a step back, it was still a strong quarter as it put up a beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 23% since reporting and currently trades at $14.
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 thrived in 2024, spurred by recent rate cuts (0.5% in September and 0.25% in November), 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 potential trade policy changes and corporate tax discussions, which could impact business confidence and growth. The path forward holds both optimism and caution as new policies take shape.
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