Construction and Maintenance Services Stocks Q2 In Review: Comfort Systems (NYSE:FIX) Vs Peers
The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Comfort Systems (NYSE:FIX) and the rest of the construction and maintenance services stocks fared in Q2.
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 13 construction and maintenance services stocks we track reported a mixed Q2. As a group, revenues missed analysts’ consensus estimates by 1% while next quarter’s revenue guidance was 2% below.
Valuation multiples for many growth stocks have not yet reverted to their early 2021 highs, but the market was optimistic at the end of 2023 due to cooling inflation. This year has been a different story as mixed inflation signals have led to market volatility, and while some construction and maintenance services stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 4.4% since the latest earnings results.
Comfort Systems (NYSE:FIX)
Having historically grown through organic means as well as acquisitions of numerous peers and competitors, Comfort Systems USA (NYSE:FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $1.81 billion, up 39.6% year on year. This print exceeded analysts’ expectations by 6.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ operating margin estimates and a solid beat of analysts’ earnings estimates.
Brian Lane, Comfort Systems USA’s President and Chief Executive Officer, said, “Our teams achieved superb execution for our customers this quarter, and early results from recently acquired companies also exceeded our high expectations. Second quarter per share earnings were more than 90% higher than the same quarter last year, and cash flow was remarkable for a second quarter.”
Comfort Systems scored the fastest revenue growth of the whole group. Unsurprisingly, the stock is up 5.8% since reporting and currently trades at $309.21.
Best Q2: 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 $170.1 million, up 28.2% year on year, outperforming analysts’ expectations by 3.5%. The business had an incredible quarter with an impressive beat of analysts’ earnings estimates.
The market seems happy with the results as the stock is up 14.9% since reporting. It currently trades at $9.31.
Is now the time to buy Great Lakes Dredge & Dock? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: Orion (NYSE:ORN)
Established in 1994, Orion (NYSE:ORN) provides construction services for marine infrastructure and industrial projects.
Orion reported revenues of $192.2 million, up 5.3% year on year, falling short of analysts’ expectations by 3.4%. It was a disappointing quarter as it posted a miss of analysts’ earnings estimates.
As expected, the stock is down 42% since the results and currently trades at $6.41.
Read our full analysis of Orion’s results here.
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 $517.8 million, up 22.7% year on year. This result topped analysts’ expectations by 2.7%. Overall, it was an exceptional quarter as it also recorded an impressive beat of analysts’ organic revenue and operating margin estimates.
The stock is flat since reporting and currently trades at $57.71.
Read our full, actionable report on Construction Partners here, it’s free.
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 $604.6 million, up 3.9% year on year. This print came in 1.7% below analysts' expectations. It was a disappointing quarter as it also recorded underwhelming EBITDA guidance.
The stock is down 7.1% since reporting and currently trades at $36.99.
Read our full, actionable report on WillScot Mobile Mini here, it’s free.
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.
