Looking back on construction and maintenance services stocks’ Q2 earnings, we examine this quarter’s best and worst performers, including Construction Partners (NASDAQ:ROAD) 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 11 construction and maintenance services stocks we track reported a very strong Q2. As a group, revenues beat analysts’ consensus estimates by 4.5% while next quarter’s revenue guidance was in line.
In light of this news, share prices of the companies have held steady as they are up 3.8% on average since the latest earnings results.
Construction Partners (NASDAQ:ROAD)
Founded in 2001, Construction Partners (NASDAQ:ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Construction Partners reported revenues of $779.3 million, up 50.5% year on year. This print fell short of analysts’ expectations by 1.3%. Overall, it was a mixed quarter for the company with full-year EBITDA guidance beating analysts’ expectations but a slight miss of analysts’ EPS estimates.
Fred J. (Jule) Smith, III, the Company's President and Chief Executive Officer, said, "We are pleased to report strong performance and excellent year-over-year growth across our key financial metrics this quarter. Despite persistent weather-related delays, including record or near-record rainfall across many of our Sunbelt markets, our teams executed with discipline and delivered robust operational results, generating significant cash flow from operations and driving a record high Adjusted EBITDA margin(1) of 16.9%. In the Southeast alone, May marked the second-wettest month on record, leading to project delays and impacting fixed asset cost recoveries. Our family of companies, now more than 6,200 employees in eight states, worked through these challenges with resilience and operational excellence, while also building a record project backlog of $2.94 billion. CPI remains well-positioned for continued success as we move through the busy construction season to close out our fiscal year and build out this record backlog."
Construction Partners pulled off the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 21% since reporting and currently trades at $113.15.
Is now the time to buy Construction Partners? Access our full analysis of the earnings results here, it’s free.
Best Q2: Primoris (NYSE:PRIM)
Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Primoris reported revenues of $1.89 billion, up 20.9% year on year, outperforming analysts’ expectations by 12.1%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Primoris pulled off the biggest analyst estimates beat among its peers. The market seems happy with the results as the stock is up 19.3% since reporting. It currently trades at $111.18.
Is now the time to buy Primoris? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: WillScot Mobile Mini (NASDAQ:WSC)
Originally focusing on mobile offices for construction sites, WillScot (NASDAQ:WSC) provides ready-to-use temporary spaces, largely for longer-term lease.
WillScot Mobile Mini reported revenues of $589.1 million, down 2.6% year on year, in line with analysts’ expectations. It was a softer quarter as it posted a significant miss of analysts’ adjusted operating income and EPS estimates.
WillScot Mobile Mini delivered the slowest revenue growth and weakest full-year guidance update in the group. As expected, the stock is down 17% since the results and currently trades at $24.35.
Read our full analysis of WillScot Mobile Mini’s results here.
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 $193.8 million, up 13.9% year on year. This number beat analysts’ expectations by 9%. Overall, it was an incredible quarter as it also recorded a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
The stock is up 9.1% since reporting and currently trades at $11.58.
Read our full, actionable report on Great Lakes Dredge & Dock here, it’s free.
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 $2.17 billion, up 20.1% year on year. This print topped analysts’ expectations by 10.6%. It was an incredible quarter as it also logged an impressive beat of analysts’ backlog estimates and a solid beat of analysts’ EPS estimates.
The stock is up 23.8% since reporting and currently trades at $696.48.
Read our full, actionable report on Comfort Systems here, it’s free.
Market Update
Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.
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