Spotting Winners: Tutor Perini (NYSE:TPC) And Construction and Maintenance Services Stocks In Q3

November 27, 2024 at 03:12 AM EST

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Let’s dig into the relative performance of Tutor Perini (NYSE: TPC) and its peers as we unravel the now-completed Q3 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 12 construction and maintenance services stocks we track reported a slower Q3. As a group, revenues missed analysts’ consensus estimates by 1.1%.

Luckily, construction and maintenance services stocks have performed well with share prices up 19.7% on average since the latest earnings results.

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. This print fell short of analysts’ expectations by 7.2%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ EPS estimates.

Ronald Tutor, Chairman and Chief Executive Officer, commented, “We have tremendous momentum with several large new project wins in the third quarter that resulted in a new record backlog of $14 billion. This backlog provides us a solid foundation upon which we expect to build a profitable, multi-year revenue stream, with the potential for significant continued growth over the next few months as we look to finalize the contract for the multi-billion-dollar Manhattan Jail, as we announced this morning, and pursue other large projects. We are pleased to put many of our largest disputes behind us, and expect to return to profitability in 2025, with even stronger earnings anticipated in 2026 and beyond, as various newer projects progress to advanced design and enter the construction phase.”

Tutor Perini delivered the weakest performance against analyst estimates of the whole group. Unsurprisingly, the stock is down 5.6% since reporting and currently trades at $28.57.

Read our full report on Tutor Perini here, it’s free.

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 a solid beat of analysts’ EPS and EBITDA estimates.

Limbach scored the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 31.9% since reporting. It currently trades at $102.88.

Is now the time to buy Limbach? Access our full analysis of the earnings results here, it’s free.

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 $601.4 million, flat year on year, falling short of analysts’ expectations by 2.6%. It was a disappointing quarter as it posted full-year EBITDA guidance missing analysts’ expectations significantly.

WillScot Mobile Mini delivered the weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $38.52.

Read our full analysis of WillScot Mobile Mini’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 $888 million, down 5.5% year on year. This number missed analysts’ expectations by 3.2%. Taking a step back, it was a mixed quarter as it also produced a solid beat of analysts’ EPS estimates but a significant miss of analysts’ backlog estimates.

The stock is up 34.5% since reporting and currently trades at $155.11.

Read our full, actionable report on MYR Group here, it’s free.

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 $1.81 billion, up 31.5% year on year. This number came in 1.6% below analysts' expectations. Aside from that, it was a mixed quarter as it also produced an impressive beat of analysts’ adjusted operating income estimates but a miss of analysts’ backlog estimates.

The stock is up 22.2% since reporting and currently trades at $505.41.

Read our full, actionable report on Comfort Systems here, it’s free.

Market Update

As a result of the Fed's rate hikes in 2022 and 2023, inflation has come down from frothy levels post-pandemic. The general rise in the price of goods and services is trending towards the Fed's 2% goal as of late, which is good news. The higher rates that fought inflation also didn't slow economic activity enough to catalyze a recession. So far, soft landing. This, combined with recent rate cuts (half a percent in September 2024 and a quarter percent in November 2024) have led to strong stock market performance in 2024. The icing on the cake for 2024 returns was Donald Trump's victory in the US Presidential Election in early November, sending major indices to all-time highs in the week following the election. Still, debates around the health of the economy and the impact of potential tariffs and corporate tax cuts remain. Said differently, there's still much uncertainty around 2025.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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