Shares of MasTec (MTZ) have been strong performers lately, with the stock up 21.2% over the past month. The stock hit a new 52-week high of $150.12 in the previous session. MasTec has gained 95.4% since the start of the year compared to the 29.7% move for the Zacks Construction sector and the 108.3% return for the Zacks Building Products - Heavy Construction industry.
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, MasTec reported EPS of $1.63 versus consensus estimate of $1.23.
For the current fiscal year, MasTec is expected to post earnings of $3.63 per share on $12.22 billion in revenues. This represents an 84.26% change in EPS on a 1.87% change in revenues. For the next fiscal year, the company is expected to earn $5.28 per share on $13.27 billion in revenues. This represents a year-over-year change of 45.45% and 8.61%, respectively.
MasTec may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
MasTec has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.
In terms of its value breakdown, the stock currently trades at 40.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 22.2X. On a trailing cash flow basis, the stock currently trades at 15.9X versus its peer group's average of 15.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, MasTec currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if MasTec fits the bill. Thus, it seems as though MasTec shares could have potential in the weeks and months to come.
Shares of MTZ have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is EMCOR Group, Inc. (EME). EME has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of B, and a Momentum Score of B.
Earnings were strong last quarter. EMCOR Group, Inc. beat our consensus estimate by 16.23%, and for the current fiscal year, EME is expected to post earnings of $22.24 per share on revenue of $14.67 billion.
Shares of EMCOR Group, Inc. have gained 17.9% over the past month, and currently trade at a forward P/E of 24.83X and a P/CF of 32.13X.
The Building Products - Heavy Construction industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MTZ and EME, even beyond their own solid fundamental situation.
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