Published on 12 Jan 2023 on Zacks via Yahoo Finance
EMCOR Group, Inc.’s EME shares soared 47% over the past six months compared with the industry’s 25.2% rise. The company’s diversified business, robust demand across all end markets and acquisitions helped drive growth despite various adverse macroeconomic conditions, namely increased inflation, supply-chain disruptions and higher energy costs.Also, EMCOR offers a sound investment opportunity, evident from its VGM Score of A.However, this Zacks Rank #3 (Hold) company’s growth remains challenged by domestic and international political developments, foreign exchange headwinds, labor market tightness, increased competition, government regulations, and the continuing threat of COVID-19 variants. Pricing and the availability of materials are directly affected by inflationary pressures and supply-chain disruptions.
Focus on Growth
Resilient end markets, solid Remaining Performance Obligations or RPOs and bolt-on acquisitions are gaining traction. The company’s RPOs increased 22% and 15.2% year over year in 2021 and 2020, respectively. RPOs at September-end were up 32% year over year to a record $7.10 billion.EMCOR continues to see demand for electrical mechanical systems in new construction and retrofit projects.The robust business in EME’s construction operations is one of the major drivers of its financial growth. Within the U.S. construction umbrella, the U.S. Electrical Construction and Facilities Services segment’s revenues increased 19.3% year over year for the third quarter, with organic revenue growth of 13.1%.
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