MasTec, Inc. MTZ has lost 12.4% over the past month, reflecting the broader industry trend, as the Zacks Building Products - Heavy Construction industry has fallen 12.6% during the same period. Meanwhile, the Zacks Construction sector declined 4.5%, while the overall market, represented by the Zacks S&P 500 Composite, has risen 1.8%.

The stock decline comes amid industry-wide concerns as construction businesses assess the potential impacts of policy changes proposed by President Donald Trump. Additionally, a slower recovery in demand for distribution services due to deferred customer spending and delays in certain transmission projects have affected MasTec’s performance.

The broader industry weakness is evident as other major players have also recorded declines during the same period. AECOM ACM has dropped 7.8%, and Fluor Corporation FLR and EMCOR Group, Inc. EME have declined 13.8% and 15.8%, respectively. This trend highlights the broader challenges impacting the heavy construction industry.

MTZ Stock’s Past Month’s Price Performance

Image Source: Zacks Investment Research

Technical Indicators: Mixed Signals

Image Source: Zacks Investment Research

MasTec’s stock is trading above its 200-day simple moving average (SMA), indicating solid long-term momentum. However, it is below its 50-day SMA, reflecting near-term volatility.

MTZ Trades at a Premium

MasTec's valuation remains a concern. The stock is trading at a forward 12-month Price/Earnings ratio (P/E F12M) of 24.89—higher than the Zacks Building Products - Heavy Construction industry average of 17.32 and well above its three-year median of 19.9.

Image Source: Zacks Investment Research

While MasTec's higher valuation reflects its growth potential, investors may hesitate to buy at these levels, especially given the recent price decline.

MasTec’s Positive Underlying Factors

MTZ’s diversified business model, coupled with strong market demand, positions the company well for continued growth across its key segments. The company benefits from a solid backlog, driven by increasing customer demand for services in areas such as Clean Energy & Infrastructure, Power Delivery, and Communications.

As of Sept. 30, 2024, MasTec reported an 18-month backlog of $13.86 billion, marking a 3.9% sequential rise and an 11% increase from the prior year. This record-high backlog strengthens the company’s momentum heading into 2025, offering clear visibility into upcoming projects that will drive its performance.

MTZ’s Communications segment is seeing robust growth, fueled by expanding market opportunities and a rising demand for advanced network infrastructure. The company is witnessing strong demand in its wireline segment, with ongoing advancements in the Nokia Ericsson swap-out and increased market share with AT&T.

Although there are some temporary delays, the combination of Broadband Equity, Access and Deployment funding, and the growing demand for fiber, driven by artificial intelligence and data centers, is expected to fuel significant growth. The wireless sector continues to benefit from these positive developments.

MTZ’s Strong Financial Management

MasTec has shown solid financial discipline by focusing on cash flow generation and effective capital allocation. Since its 2022 acquisition, the company has been actively reducing debt, paying off more than $900 million through the third quarter of 2024.

One of the company’s key strengths has been its impressive cash flow conversion, with about 85% of adjusted EBITDA turned into cash flow. With expectations to reach a year-end leverage ratio in the low 2X range, MasTec is improving its financial flexibility and strengthening its overall position.

MasTec Capitalizes on Infrastructure Growth

MTZ is poised to capitalize on growth in infrastructure spending, driven by government initiatives such as the Infrastructure Investment and Jobs Act, and the Inflation Reduction Act. The company’s focus on clean energy, power delivery and water infrastructure aligns well with these expanding investments. As government spending increases, MasTec’s long-term growth opportunities are strengthened.

For 2025, the company anticipates continued growth across its key segments, including communications, power delivery and clean energy. MasTec expects double-digit revenue growth in these areas, with margin improvements from that reported in 2024. In power delivery, the company expects strong revenue growth as large transmission projects ramp up. These positive trends are expected to continue in 2025 and beyond, supporting MTZ’s long-term growth prospects.

Positive Fundamentals

The company demonstrates solid fundamentals, with a strong VGM Score of A, supported by an impressive Value Score of B, alongside Growth and Momentum Scores of A and B, respectively.

MasTec’s EPS Estimates & Analyst Sentiment

Wall Street analysts remain optimistic about MasTec’s earnings potential. Over the past 30 days, earnings estimates for 2025 have been revised upward, as shown below, indicating 47.4% year-over-year growth.

Image Source: Zacks Investment Research

Conclusion: Is MTZ Stock a Buy, Hold, or Sell?

MasTec has experienced a decline over the past month, reflecting broader industry challenges and deferred customer spending. However, the company’s solid backlog, strong financial management and focus on high-growth sectors like clean energy and communications provide a strong foundation for growth.

With a favorable VGM score of A and positive earnings estimate revisions for 2025, this Zacks Rank #3 (Hold) stock shows promising long-term potential. While it may be prudent for investors to monitor the stock for further developments, those already holding the stock can consider maintaining their position, given its long-term growth potential and solid financial position.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Fluor Corporation (FLR) : Free Stock Analysis Report

AECOM (ACM) : Free Stock Analysis Report

EMCOR Group, Inc. (EME) : Free Stock Analysis Report

MasTec, Inc. (MTZ) : Free Stock Analysis Report

To read this article on Zacks.com click here.

Zacks Investment Research