MasTec, Inc. MTZ is scheduled to report fourth-quarter 2024 results on Feb. 27, after the closing bell.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

In the last reported quarter, MasTec reported mixed results. Earnings per share (EPS) of $1.63 exceeded the Zacks Consensus Estimate by 32.5%, while revenues of $3.25 billion fell short of expectations by 5.3%. The company’s adjusted EBITDA margin of 9.4% was 85 basis points (bps) higher than guidance, highlighting a strong profitability trend across all segments. MasTec's backlog reached a record $13.9 billion, reflecting robust future demand.

This Florida-based leading infrastructure construction company surpassed earnings estimates in each of the trailing four quarters, with an average of 40.2%. You can see the historical figures in the chart below.

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How are Estimates Placed for MTZ Stock?

The Zacks Consensus Estimate for the fourth-quarter EPS has remained unchanged at $1.28 over the past 60 days. The estimated figure indicates stellar 93.9% growth from the year-ago reported figure. The consensus mark for revenues is pegged at $3.32 billion, suggesting a 1.2% year-over-year increase. For 2024, MTZ is expected to witness 90.4% growth from the 2023 level.

For 2025, MTZ is expected to register 47.4% EPS growth from a year ago.

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What the Zacks Model Unveils for MasTec

Our proven model does not conclusively predict an earnings beat for MasTec for the quarter to be reported. That is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. This is not the case here, as you will see below.

Earnings ESP: MasTec has an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Zacks Rank: The company currently carries a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Influencing MasTec’s Q4 Performance

MasTec 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.

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

For the fourth quarter, MasTec expects revenues of approximately $3.325 billion, with an EBITDA margin of around 8%.

In Communications, revenues are forecasted at $915 million, implying a 20% year-over-year increase, with adjusted EBITDA margins in the low double digits.

Clean Energy & Infrastructure is expected to generate $1.3 billion in revenues, representing 11% sequential growth and 19% year-over-year growth. Fourth-quarter margins are expected to be in the mid-single digits, approaching third-quarter levels.

Power Delivery revenues are projected at $730 million, benefiting from increased distribution spending and storm restoration work. Adjusted EBITDA margins are expected in line with the full-year estimate.

Oil & Gas revenues are estimated at $425 million, with margins in the mid-teens.

MTZ Stock Price Performance & Valuation

MTZ stock has exhibited a downward movement in the past three-month period but outperformed the Zacks Building Products - Heavy Construction industry and the broader Construction sector but lagged the S&P 500 index, as you can see below.

Nonetheless, during the past three-month period, MasTec has outperformed competitors like AECOM (ACM, down 18.1%), Fluor Corporation (FLR, down 33.7%) and EMCOR Group, Inc. (EME, down 24.1%). The stock's decline reflects broader industry concerns as construction companies evaluate the potential impact of policy changes proposed by President Donald Trump.

MTZ’s 3-Month Price Performance

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MTZ Stock’s 50-Day & 200-Day Moving Averages

MasTec stock has already fallen 24.8% since its 52-week high of $166.95 on Jan. 22 while trading way below the 50-day average but above the 200-day moving average, as shown below.

Image Source: Zacks Investment Research

Challenges and Potential Risks for MasTec

Despite strong execution, MasTec faces several challenges. Delayed project timelines in the Clean Energy and Communications segments remain a concern, particularly with material deliveries and regulatory permitting. While the company expects these delays to be temporary, prolonged disruptions could affect near-term revenue recognition.

Labor constraints remain a long-term industry challenge, particularly as demand for skilled workers in infrastructure and energy sectors continues to rise. MasTec’s ability to scale its workforce will be critical to sustaining growth.

In Oil & Gas, the winding down of the Mountain Valley Pipeline (“MVP”) project poses a potential revenue headwind in 2025. However, management highlighted that margins in the segment have been strong even without MVP, suggesting resilience.

MTZ Trades at a Premium

Presently, MasTec stock is trading at a premium compared to the industry average, as shown in the chart below. The stock is trading at a forward 12-month P/E ratio of 21.76 — higher than the Zacks Building Products - Heavy Construction industry average of 15.97 and slightly above its three-year median of 20.

MasTec is trading beyond historical valuation levels. The stock is still overvalued despite its significant decline.

MasTec’s P/E Ratio (Forward 12-Month) vs. Industry

Image Source: Zacks Investment Research

Investment Thoughts: Buy, Sell or Hold MTZ Stock?

MasTec has experienced a decline over the past three months, reflecting broader industry challenges and postponed customer spending. Despite this, the company remains well-positioned for long-term growth due to its strong backlog, solid financial management and focus on high-growth sectors such as clean energy and communications. These factors provide a stable foundation for future expansion.

The company’s strong fundamentals are reflected in its favorable VGM Score of A, supported by a Value Score of B and Growth and Momentum Scores of A. This suggests that MasTec maintains a solid financial position with strong growth potential.

For existing investors, the stock’s long-term prospects and financial stability may justify holding their position. However, given market volatility and MasTec’s current valuation, potential investors may want to wait for clearer signs of stability and improved market conditions before entering a position.

The upcoming earnings call on Feb. 27 will be a crucial event for assessing the company’s performance and outlook. Overall, while MasTec has encountered short-term challenges, its strong fundamentals and strategic focus on high-growth industries position it well for the future.

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This article originally published on Zacks Investment Research (zacks.com).

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