Spotting Winners: AECOM (NYSE:ACM) And Engineering and Design Services Stocks In Q2

Let’s dig into the relative performance of AECOM (NYSE:ACM) and its peers as we unravel the now-completed Q2 engineering and design services earnings season.

Companies providing engineering and design services boast ever-evolving technical expertise. Compared to their counterparts who manufacture and sell physical products, these companies can also pivot faster to more trending areas due to their smaller physical asset bases. Green energy and water conservation, for example, are current themes driving incremental demand in this space. On the other hand, those providing engineering and design services are at the whim of construction and infrastructure project volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.

The 5 engineering and design services stocks we track reported a strong Q2. As a group, revenues beat analysts’ consensus estimates by 1.9% while next quarter’s revenue guidance was 0.6% above.

Inflation progressed towards the Fed’s 2% goal at the end of 2023, leading to strong stock market performance. On the other hand, 2024 has been a bumpier ride as the market switches between optimism and pessimism around rate cuts and inflation. Thankfully, engineering and design services stocks have been resilient with share prices up 8% on average since the latest earnings results.

AECOM (NYSE:ACM)

Founded in 1990 when a group of engineers from five companies decided to merge, AECOM (NYSE:ACM) provides various infrastructure consulting services.

AECOM reported revenues of $4.15 billion, up 13.3% year on year. This print exceeded analysts’ expectations by 5.2%. Overall, it was a strong quarter for the company with a decent beat of analysts’ operating margin and earnings estimates.

“Our third quarter performance was highlighted by record revenue and margins, strong cash flow growth, and we increased our earnings guidance for a second time this year, which reflects our competitive advantages,” said Troy Rudd, AECOM’s chief executive officer.

AECOM pulled off the biggest analyst estimates beat of the whole group. Unsurprisingly, the stock is up 15.6% since reporting and currently trades at $100.14.

Is now the time to buy AECOM? Access our full analysis of the earnings results here, it’s free.

Best Q2: EMCOR (NYSE:EME)

Through its network of over 70 subsidiaries, EMCOR (NYSE:EME) provides electrical, mechanical, and building construction and services

EMCOR reported revenues of $3.67 billion, up 20.4% year on year, outperforming analysts’ expectations by 3.9%. It was an exceptional quarter for the company with an impressive beat of analysts’ earnings estimates.

EMCOR achieved the fastest revenue growth and highest full-year guidance raise among its peers. The market seems happy with the results as the stock is up 10.2% since reporting. It currently trades at $393.15.

Is now the time to buy EMCOR? Access our full analysis of the earnings results here, it’s free.

Weakest Q2: MasTec (NYSE:MTZ)

Involved in the 1996 Olympic Games MasTec (NYSE:MTZ) is an infrastructure construction company that specializes in the telecommunications, energy, and utility industries.

MasTec reported revenues of $2.96 billion, up 3% year on year, falling short of analysts’ expectations by 4.2%. It was a mixed quarter for the company with EPS exceeding analysts' estimates.

MasTec posted the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. Interestingly, the stock is up 6.7% since the results and currently trades at $113.14.

Read our full analysis of MasTec’s results here.

Dycom (NYSE:DY)

Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE:DY) builds and maintains telecommunications infrastructure.

Dycom reported revenues of $1.20 billion, up 15.5% year on year, in line with analysts’ expectations. More broadly, it was a very strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a decent beat of analysts’ earnings estimates.

The stock is down 9.6% since reporting and currently trades at $175.96.

Read our full, actionable report on Dycom here, it’s free.

Sterling (NASDAQ:STRL)

Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction.

Sterling reported revenues of $582.8 million, up 11.6% year on year, surpassing analysts’ expectations by 4.1%. Revenue aside, it was a very strong quarter for the company with a solid beat of analysts’ earnings estimates and optimistic EBITDA guidance for the full year.

The stock is up 16.8% since reporting and currently trades at $119.99.

Read our full, actionable report on Sterling here, it’s free.

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