Earnings results often indicate what direction a company will take in the months ahead. With Q1 behind us, let’s have a look at Granite Construction (NYSE:GVA) and its peers.
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 very strong Q1. As a group, revenues beat analysts’ consensus estimates by 5.9%.
Luckily, construction and maintenance services stocks have performed well with share prices up 18.5% on average since the latest earnings results.
Granite Construction (NYSE:GVA)
Having played a role in the construction of the Hoover Dam, Granite Construction (NYSE:GVA) is a provider of infrastructure solutions for roads, bridges, and other projects.
Granite Construction reported revenues of $699.5 million, up 4.1% year on year. This print fell short of analysts’ expectations by 0.9%, but it was still a very strong quarter for the company with an impressive beat of analysts’ EPS estimates and a solid beat of analysts’ EBITDA estimates.
The stock is up 8.3% since reporting and currently trades at $88.04.
Is now the time to buy Granite Construction? Access our full analysis of the earnings results here, it’s free.
Best Q1: Comfort Systems (NYSE:FIX)
Formed through the merger of 12 companies, Comfort Systems (NYSE:FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $1.83 billion, up 19.1% year on year, outperforming analysts’ expectations by 4.2%. The business had an incredible quarter with a solid beat of analysts’ backlog estimates and an impressive beat of analysts’ EPS estimates.
The market seems happy with the results as the stock is up 24.8% since reporting. It currently trades at $470.
Is now the time to buy Comfort Systems? Access our full analysis of the earnings results here, it’s free.
Matrix Service (NASDAQ:MTRX)
Founded in Oklahoma, Matrix Service (NASDAQ:MTRX) provides engineering, fabrication, construction, and maintenance services primarily to the energy and industrial markets.
Matrix Service reported revenues of $200.2 million, up 20.6% year on year, falling short of analysts’ expectations by 6.9%. It was a disappointing quarter as it posted full-year revenue guidance missing analysts’ expectations and a significant miss of analysts’ EBITDA estimates.
Matrix Service delivered the weakest performance against analyst estimates and weakest full-year guidance update in the group. The stock is flat since the results and currently trades at $12.13.
Read our full analysis of Matrix Service’s results here.
APi (NYSE:APG)
Started in 1926 as an insulation contractor, APi (NYSE:APG) provides life safety solutions and specialty services for buildings and infrastructure.
APi reported revenues of $1.72 billion, up 7.4% year on year. This result topped analysts’ expectations by 4.7%. Overall, it was a very strong quarter as it also produced an impressive beat of analysts’ organic revenue estimates and full-year EBITDA guidance exceeding analysts’ expectations.
The stock is up 20.7% since reporting and currently trades at $45.61.
Read our full, actionable report on APi here, it’s free.
Great Lakes Dredge & Dock (NASDAQ:GLDD)
Founded as Lydon & Drews dredging company, Great Lakes Dredge & Dock (NASDAQ:GLDD) provides dredging services, land reclamation, and coastal protection projects in the United States and internationally.
Great Lakes Dredge & Dock reported revenues of $242.9 million, up 22.3% year on year. This number surpassed analysts’ expectations by 17.5%. It was an incredible quarter as it also put up a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Great Lakes Dredge & Dock achieved the biggest analyst estimates beat among its peers. The stock is up 14.5% since reporting and currently trades at $10.93.
Read our full, actionable report on Great Lakes Dredge & Dock 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 U.S. 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, leaving much uncertainty around 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Join Paid Stock Investor Research
Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.