EMCOR Group, Inc. (EME) | Investment Case

1. Company Snapshot

1.a. Company Description

EMCOR Group, Inc.provides electrical and mechanical construction, and facilities services primarily in the United States and the United Kingdom.It offers design, integration, installation, starts-up, operation, and maintenance services related to electrical power transmission, distribution, and generation systems; energy solutions; premises electrical and lighting systems; process instrumentation in the refining, chemical processing, and food processing industries; low-voltage systems, such as fire alarm, security, and process control systems; voice and data communications systems; roadway and transit lighting, signaling, and fiber optic lines; heating, ventilation, air conditioning, refrigeration, and geothermal solutions; clean-room process ventilation systems; fire protection and suppression systems; plumbing, process, and high-purity piping systems; controls and filtration systems; water and wastewater treatment systems; central plant heating and cooling systems; crane and rigging services; millwright services; and steel fabrication, erection, and welding services.

The company also provides building services that cover commercial and government site-based operations and maintenance; facility management, maintenance, and services; outage services to utilities and industrial plants; military base operations support services; mobile mechanical maintenance and services; services for indoor air quality; floor care and janitorial services; landscaping, lot sweeping, and snow removal services; vendor management and call center services; installation and support for building systems; program development, management, and maintenance for energy systems; technical consulting and diagnostic services; infrastructure and building projects; small modification and retrofit projects; and other building services.It offers industrial services to oil, gas, and petrochemical industries.EMCOR Group, Inc.

was incorporated in 1987 and is headquartered in Norwalk, Connecticut.

Show Full description

1.b. Last Insights on EME

EMCOR Group, Inc.'s recent performance was negatively impacted by its Q3 earnings miss, with earnings of $6.57 per share falling short of the Zacks Consensus Estimate of $6.65 per share. Despite a 16.4% revenue increase to $4.30 billion, net income growth was modest. A reduction in stake by institutional investor Campbell & CO Investment Adviser LLC may have also contributed to downward pressure. Additionally, the company's record backlog and rising margins, previously considered positives, did not offset the earnings miss.

1.c. Company Highlights

Last Price	623.62
Change Percentage	-1.85%
Open	634.99
Previous Close	635.36
Market Cap ( Millions)	27917
Volume	289876
Year High	778.64
Year Low	320.89
M A 50	656.15
M A 200	538.01

FCF Yield	4.11%
Dividend Yield	0.16%
ROE	36.84%
Debt / Equity	24.59%
Net Debt / EBIDTA	9.50%
Price To Book	8.38
Price Earnings Ratio	24.73
Price To FCF	24.3
Price To sales	1.72
EV / EBITDA	16.16

2. EMCOR Group's Q3 2025 Earnings: A Strong Performance

EMCOR Group reported a robust third quarter 2025, with revenues reaching $4.3 billion, a 16.4% increase from the prior year period. The company's diluted earnings per share (EPS) came in at $6.57, beating analyst estimates of $6.54. The operating margin was an impressive 9.4%, driven by strong performance in the Electrical and Mechanical Construction segments. The company's operating cash flow was also robust, at $475.5 million.

Publication Date: Nov -03

                                    📋 Highlights
                                    Revenue & EPS Growth:
                                                Q3 revenue reached $4.3B (+16.4% YoY) with diluted EPS of $6.57 (+13.3% YoY).
Operating Margin & Cash Flow:
                                                Achieved 9.4% operating margin and $475.5M operating cash flow, driven by Electrical/Mechanical segments.
Acquisition Impact:
                                                Acquisitions added $306.6M in revenue, with Miller Electric as the largest contributor and Danforth pending to add $350-400M.
Segment Performance:
                                                U.S. Electrical Construction segment reported $145.2M operating income (+22% YoY) and 11.3% margin.

                                

Segmental Performance

The U.S. Electrical Construction segment was a key contributor to the company's success, with operating income increasing by nearly 22% to $145.2 million. The segment's operating margin remained strong at 11.3%. Jason Nalbandian noted that the company's gross profit margin for the quarter was 19.4%, with gross profit increasing by 13.7% to $835.3 million.

Guidance and Outlook

EMCOR Group tightened its revenue guidance for 2025 to a range of $16.7 billion to $16.8 billion, and narrowed its non-GAAP diluted EPS guidance to a range of $25 to $25.75. The company expects to continue executing with discipline and efficiency, and is confident in its ability to maintain its cash flow characteristics and margin profile while growing organically at a rate of around 10%. Tony Guzzi mentioned that the company's data center business is expected to grow at a high double-digit rate, with the backlog supporting continued double-digit growth.

Valuation

With a P/E Ratio of 26.8 and an EV/EBITDA of 18.01, EMCOR Group's valuation appears to be reasonable, considering its strong financial performance and growth prospects. The company's ROE of 36.84% and ROIC of 26.95% also indicate a high level of profitability. Analysts estimate next year's revenue growth at 6.8%, which is slightly lower than the company's expected organic growth rate of around 10%.

Acquisition Strategy

EMCOR Group recently signed an agreement to acquire the John W. Danforth Company, a mechanical construction company with expertise in data centers, healthcare, and commercial markets. The transaction is expected to close in the fourth quarter, and is expected to add $350-$400 million in revenues with solid steady-state margins.

3. NewsRoom

EMCOR Stock Dips 9% in a Month: Should Investors Hold or Fold?

Dec -04

Source:

EMCOR Group, Inc. Completes Sale of EMCOR UK to OCS Group UK Limited

Dec -01

Source: businesswire.com

Capital Fund Management S.A. Boosts Holdings in EMCOR Group, Inc. $EME

Nov -29

Source: defenseworld.net

Boston Partners Reduces Stock Position in EMCOR Group, Inc. $EME

Nov -29

Source: defenseworld.net

All You Need to Know About Emcor Group (EME) Rating Upgrade to Buy

Nov -28

Source: zacks.com

Touchstone Small Company Fund Q3 2025 Performance Review

Nov -27

Source: seekingalpha.com

Black Friday 2025: 2 Retail Stocks That Louis Navellier Recommends This Holiday Season

Nov -27

Source: feeds.benzinga.com

Comfort Systems vs. EMCOR: Which Infrastructure Stock is Leading Now?

Nov -25

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.51%)

6. Segments

United States Mechanical Construction and Facilities Services

Expected Growth: 5.5%

EMCOR Group, Inc.'s United States Mechanical Construction and Facilities Services segment growth of 5.5% is driven by increasing demand for energy-efficient solutions, infrastructure upgrades, and renovation projects in commercial and industrial buildings. Additionally, the growing need for HVAC and plumbing services, as well as the company's strategic acquisitions and investments in technology, contribute to its growth momentum.

United States Building Services

Expected Growth: 5.8%

The 5.8% growth in United States Building Services from EMCOR Group, Inc. is driven by increasing demand for energy-efficient solutions, retrofitting of existing buildings, and government incentives for sustainable infrastructure development. Additionally, the growing need for maintenance and repair services in the commercial and industrial sectors, as well as the expansion of EMCOR's service offerings, contribute to this growth.

United States Electrical Construction and Facilities Services

Expected Growth: 5.2%

EMCOR Group, Inc.'s United States Electrical Construction and Facilities Services segment growth of 5.2% is driven by increasing demand for electrical infrastructure upgrades, renewable energy installations, and data center construction. Additionally, government investments in infrastructure development, and growing need for energy-efficient solutions also contribute to the segment's growth.

United States Industrial Services

Expected Growth: 5.6%

EMCOR Group, Inc.'s United States Industrial Services segment growth of 5.6% is driven by increasing demand for maintenance and repair services from refineries, petrochemical plants, and power generation facilities. Additionally, investments in renewable energy and infrastructure projects, as well as a strong backlog of projects, contribute to the segment's growth.

United Kingdom Building Services

Expected Growth: 5.4%

The 5.4% growth of United Kingdom Building Services from EMCOR Group, Inc. is driven by increasing demand for energy-efficient solutions, government initiatives for infrastructure development, and a growing focus on sustainability in the construction industry. Additionally, the segment benefits from a strong backlog of projects and strategic acquisitions, further supporting its growth momentum.

7. Detailed Products

Mechanical Services

EMCOR Group, Inc. provides mechanical services including HVAC, plumbing, and piping solutions for commercial, industrial, and institutional facilities.

Electrical Services

EMCOR Group, Inc. offers electrical services including electrical construction, maintenance, and repair for industrial, commercial, and institutional clients.

Building Services

EMCOR Group, Inc. provides building services including building automation, energy management, and building information modeling (BIM) for commercial, industrial, and institutional clients.

Industrial Services

EMCOR Group, Inc. offers industrial services including plant maintenance, turnaround services, and construction for industrial clients in the power generation, oil and gas, and chemical processing industries.

Energy Services

EMCOR Group, Inc. provides energy services including energy efficiency solutions, renewable energy systems, and energy management for commercial, industrial, and institutional clients.

Facilities Services

EMCOR Group, Inc. offers facilities services including facilities management, operations and maintenance, and capital project management for commercial, industrial, and institutional clients.

8. EMCOR Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

EMCOR Group, Inc. operates in a industry with moderate threat of substitutes. While there are some substitutes available, they are not a significant threat to the company's business.

Bargaining Power Of Customers

EMCOR Group, Inc. has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's services are often critical to its customers' operations, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

EMCOR Group, Inc. relies on a network of suppliers to provide materials and equipment. While the company has some bargaining power due to its size, suppliers still have some negotiating power, particularly for specialized or high-demand materials.

Threat Of New Entrants

The construction and facilities services industry has high barriers to entry, including significant capital requirements and regulatory hurdles. This makes it difficult for new entrants to compete with established companies like EMCOR Group, Inc.

Intensity Of Rivalry

The construction and facilities services industry is highly competitive, with many established players competing for market share. EMCOR Group, Inc. must continually innovate and improve its services to maintain its market position.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	3.16%
Debt Cost	6.97%
Equity Weight	96.84%
Equity Cost	9.28%
WACC	9.21%
Leverage	3.26%

11. Quality Control: EMCOR Group, Inc. passed 7 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

EMCOR

A-Score: 5.5/10

Value: 2.8

Growth: 9.1

Quality: 7.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

Primoris Services

A-Score: 5.2/10

Value: 3.4

Growth: 8.6

Quality: 4.7

Yield: 0.0

Momentum: 10.0

Volatility: 4.7

1-Year Total Return ->

IES Holdings

A-Score: 5.2/10

Value: 2.2

Growth: 9.7

Quality: 7.1

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

Comfort Systems USA

A-Score: 5.2/10

Value: 1.2

Growth: 9.8

Quality: 7.2

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Sterling Infrastructure

A-Score: 5.1/10

Value: 1.5

Growth: 8.7

Quality: 7.3

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Tetra Tech

A-Score: 4.3/10

Value: 3.0

Growth: 7.3

Quality: 5.5

Yield: 1.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

8.28%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.21%

EMCOR Group, Inc. - US29084Q1004

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on EME

1.c. Company Highlights

Higher Growth

Strong Momentum

Better Quality

Earnings Beats

Revenues Beats

Average Growth

Revenues Miss

Stable Momentum

Average Yield

2. EMCOR Group's Q3 2025 Earnings: A Strong Performance

Segmental Performance

Guidance and Outlook

Valuation

Acquisition Strategy

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.51%)

6. Segments

United States Mechanical Construction and Facilities Services

Expected Growth: 5.5%

United States Building Services

Expected Growth: 5.8%

United States Electrical Construction and Facilities Services

Expected Growth: 5.2%

United States Industrial Services

Expected Growth: 5.6%

United Kingdom Building Services

Expected Growth: 5.4%

7. Detailed Products

Mechanical Services

Electrical Services

Building Services

Industrial Services

Energy Services

Facilities Services

8. EMCOR Group, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: EMCOR Group, Inc. passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

623.62$

Current Price

623.62$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA