Wrapping up Q1 earnings, we look at the numbers and key takeaways for the engineering and design services stocks, including AECOM (NYSE: ACM) and its peers.

Companies providing engineering and design services boast ever-evolving technical expertise. Compared to their counterparts who manufacture and sell physical products, these companies can also pivot faster to more trending areas due to their smaller physical asset bases. Green energy and water conservation, for example, are current themes driving incremental demand in this space. On the other hand, those providing engineering and design services are at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.

The 5 engineering and design services stocks we track reported a very strong Q1. As a group, revenues beat analysts’ consensus estimates by 1.7% while next quarter’s revenue guidance was in line.

Luckily, engineering and design services stocks have performed well with share prices up 28.4% on average since the latest earnings results.

Weakest Q1: AECOM (NYSE: ACM)

Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE: ACM) provides various infrastructure consulting services.

AECOM reported revenues of $3.77 billion, down 4.4% year on year. This print fell short of analysts’ expectations by 9.5%. Overall, it was a mixed quarter for the company with a decent beat of analysts’ adjusted operating income estimates.

“Even with impacts resulting from changing political dynamics around the world, we continue to deliver on our financial and strategic objectives, just as we have over the past several years, and we are increasing our financial guidance for a second consecutive quarter as a result,” said Troy Rudd, AECOM’s chairman and chief executive officer.

AECOM delivered the weakest performance against analyst estimates and slowest revenue growth of the whole group. Interestingly, the stock is up 13.2% since reporting and currently trades at $115.62.

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

Best Q1: Sterling (NASDAQ: STRL)

Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ: STRL) provides civil infrastructure construction.

Sterling reported revenues of $430.9 million, down 2.1% year on year, outperforming analysts’ expectations by 5.4%. The business had a stunning quarter with full-year EBITDA guidance exceeding analysts’ expectations.

Sterling achieved the highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 40.3% since reporting. It currently trades at $233.28.

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

MasTec (NYSE: MTZ)

Involved in the 1996 Olympic Games MasTec (NYSE: MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

MasTec reported revenues of $2.85 billion, up 6% year on year, exceeding analysts’ expectations by 4.9%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EPS estimates.

Interestingly, the stock is up 26.4% since the results and currently trades at $169.32.

Read our full analysis of MasTec’s results here.

EMCOR (NYSE: EME)

Through its network of over 70 subsidiaries, EMCOR (NYSE: EME) provides electrical, mechanical, and building construction and services

EMCOR reported revenues of $3.87 billion, up 12.7% year on year. This number topped analysts’ expectations by 2.2%. It was a very strong quarter as it also put up a solid beat of analysts’ EBITDA estimates.

EMCOR delivered the fastest revenue growth but had the weakest full-year guidance update among its peers. The stock is up 31.7% since reporting and currently trades at $545.97.

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

Dycom (NYSE: DY)

Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE: DY) builds and maintains telecommunications infrastructure.

Dycom reported revenues of $1.26 billion, up 10.2% year on year. This print surpassed analysts’ expectations by 5.7%. Overall, it was an exceptional quarter as it also recorded an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.

Dycom scored the biggest analyst estimates beat among its peers. The stock is up 30.5% since reporting and currently trades at $252.28.

Read our full, actionable report on Dycom 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 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

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