AECOM Stock Hits 52-Week High: Smart Buy or Better to Hold?

Artificial intelligence (AI) is Wall Street’s new obsession, with companies discussing the technology in a snowballing fashion and helping to keep market sentiment positive.

The robust quarterly results we’ve received from NVIDIA over the last year have added further fuel to the fire, with the company flexing the scorching-hot demand it’s been witnessing regarding its AI chips.

Still, outside of NVIDIA, there are several other stocks investors can tap into for AI exposure, including Vertiv VRT, Arista Networks ANET, and Comfort Systems USA FIX. For those interested in exposure to the technology, let’s take a closer look at each.

Vertiv

Vertiv provides services for data centers, communication networks, and commercial and industrial facilities with a portfolio of power, cooling, and IT infrastructure solutions and services.

Analysts have taken their earnings expectations higher across all timeframes thanks to robust quarterly results, landing the stock into a Zacks Rank #1 (Strong Buy).

Scorching-hot demand for the company’s solutions has allowed it to post the above-mentioned robust quarterly results, with Vertiv exceeding the Zacks Consensus EPS estimate by an average of 10% across its last four releases. The company’s top line has expanded nicely amid the frenzy, with VRT posting double-digit percentage year-over-year revenue growth in seven consecutive releases.

Below is a chart illustrating the company’s sales on a quarterly basis.

Arista Networks

Arista Networks is an industry leader in data-driven, client-to-cloud networking for large data centers, campus, and routing environments. Similar to VRT, analysts have raised their earnings expectations across the board.

Jayshree Ullal, CEO, on the company’s latest set of quarterly results:

‘Arista remains at the forefront of next generation centers of data across client-to-cloud and AI focused locations.’

The growing AI landscape has benefited the company’s top line in a big way, with the company posting sequential revenue growth in each of its last ten periods. Below is a chart illustrating the company’s sales on a quarterly basis.

Comfort Systems USA

Comfort Systems USA provides comprehensive heating, ventilation, and air conditioning installation, maintenance, repair, and replacement services. The company provides chillers, cooling towers, and other critical components found within data centers.

The stock boasts a Zacks Rank #1 (Strong Buy), with the revisions trend for its current fiscal year considerably bullish, up 46% over the last year and suggesting 60% year-over-year growth.

Like those above, better-than-expected quarterly results have regularly fueled shares over the last year, gaining a remarkable 160% and widely outperforming relative to the S&P 500. The company remains optimistic about its growth trajectory, underpinned by strong backlog growth

Bottom Line

The AI frenzy continues to dominate market headlines, with companies continuing to speak on the technology in a snowballing fashion.

It isn’t just beloved NVIDIA enjoying the tailwinds, as Vertiv VRT, Arista Networks ANET, and Comfort Systems USA FIX have also seen the same.

Zacks Investment Research

MasTec, Inc. MTZ has caught the attention of investors with its impressive performance. After hovering around $143 per share for the past six trading sessions, the stock reached a new 52-week high of $150.12 on Tuesday. It then pulled back slightly to close the trading session at $147.94, marking a 3.4% increase from the previous day's closing price of $143.07.

Shares of MTZ have gained 34.2% over the past six months, outperforming the 28.2% rise in the Zacks Building Products - Heavy Construction industry. The stock has also surpassed the broader Construction sector's growth of 17.2% and the S&P 500 index’s 12.4% rally during the same period.

This Coral Gables, FL-based leading infrastructure construction company is seeing positive momentum, driven by the strong performance of the Clean Energy & Infrastructure segment, a diversified business model and recent acquisitions. Favorable macro trends, improved project efficiencies and a solid backlog are also supporting end-market growth.

The recent strong performance of MasTec has put it ahead of peers like EMCOR Group, Inc. EME, Dycom Industries, Inc. DY and Tutor Perini Corporation TPC in the past three months. During the said time frame, EME, DY and TPC shares have rallied 30.7%, 1.3% and 31.9%, respectively.

Apart from company-specific tailwinds, broader macroeconomic trends present a supportive backdrop for the company’s operations. The consumer confidence index increased to 111.7 in November, marking a 16-month high, driven by optimism about the labor market and lower inflation expectations. These improvements indicate a favorable economic environment that aligns with growth opportunities in the industry.

Comfort Systems USA, Inc. FIX has been riding a wave of momentum and hit a new 52-week high of $510.79 yesterday before closing lower at $504.12.

The shares of a leading national provider specializing in mechanical, electrical, and plumbing (MEP) services and installations soared 48.6% in the past three months, outperforming the Zacks Building Products - Air Conditioner and Heating industry’s 20.8% growth. The stock even fared better than the broader Construction sector’s 10.3% rise and the S&P 500’s 7.1% increase.

The company has been benefiting from sustained demand for its offerings and a solid backlog. Innovation remains at the forefront of its operations. Strong market conditions in the technology and manufacturing sectors, combined with FIX's robust project pipeline, provide a solid foundation for future performance.

Comfort Systems USA’s 3-Month Share Performance

Technical indicators show that FIX stock has been ceaselessly trading above the 200-day simple moving average (SMA) since Oct. 26, 2023. The stock is currently trading above the 50-day SMA and 200-day SMA and the 50-day SMA continues to read higher than the 200-day moving average, indicating a bullish trend.

FIX Stock Trades Above 50-Day SMA & 200-Day SMA

For new and old investors, taking full advantage of the stock market and investing with confidence are common goals. Zacks Premium provides lots of different ways to do both.

The popular research service can help you become a smarter, more self-assured investor, giving you access to daily updates of the Zacks Rank and Zacks Industry Rank, the Zacks #1 Rank List, Equity Research reports, and Premium stock screens.

Zacks Premium includes access to the Zacks Style Scores as well.

What are the Zacks Style Scores?

The Zacks Style Scores, developed alongside the Zacks Rank, are complementary indicators that rate stocks based on three widely-followed investing methodologies; they also help investors pick stocks with the best chances of beating the market over the next 30 days.

Each stock is given an alphabetic rating of A, B, C, D or F based on their value, growth, and momentum qualities. With this system, an A is better than a B, a B is better than a C, and so on, meaning the better the score, the better chance the stock will outperform.

The Style Scores are broken down into four categories:

Value Score

Value investors love finding good stocks at good prices, especially before the broader market catches on to a stock's true value. Utilizing ratios like P/E, PEG, Price/Sales, Price/Cash Flow, and many other multiples, the Value Style Score identifies the most attractive and most discounted stocks.

Growth Score

While good value is important, growth investors are more focused on a company's financial strength and health, and its future outlook. The Growth Style Score takes projected and historic earnings, sales, and cash flow into account to uncover stocks that will see long-term, sustainable growth.

Momentum Score

Momentum trading is all about taking advantage of upward or downward trends in a stock's price or earnings outlook, and these investors live by the saying "the trend is your friend." The Momentum Style Score can pinpoint good times to build a position in a stock, using factors like one-week price change and the monthly percentage change in earnings estimates.

VGM Score

If you like to use all three kinds of investing, then the VGM Score is for you. It's a combination of all Style Scores, and is an important indicator to use with the Zacks Rank. The VGM Score rates each stock on their shared weighted styles, narrowing down the companies with the most attractive value, best growth forecast, and most promising momentum.

How Style Scores Work with the Zacks Rank

The Zacks Rank, which is a proprietary stock-rating model, employs earnings estimate revisions, or changes to a company's earnings expectations, to make building a winning portfolio easier.

Investors can count on the Zacks Rank's success, with #1 (Strong Buy) stocks producing an unmatched +25.41% average annual return since 1988, more than double the S&P 500's performance. But the model rates a large number of stocks, and there are over 200 companies with a Strong Buy rank, plus another 600 with a #2 (Buy) rank, on any given day.

But it can feel overwhelming to pick the right stocks for you and your investing goals with over 800 top-rated stocks to choose from.

That's where the Style Scores come in.

You want to make sure you're buying stocks with the highest likelihood of success, and to do that, you'll need to pick stocks with a Zacks Rank #1 or #2 that also have Style Scores of A or B. If you like a stock that only as a #3 (Hold) rank, it should also have Scores of A or B to guarantee as much upside potential as possible.

As mentioned above, the Scores are designed to work with the Zacks Rank, so any change to a company's earnings outlook should be a deciding factor when picking which stocks to buy.

For instance, a stock with a #4 (Sell) or #5 (Strong Sell) rating, even one that boasts Scores of A and B, still has a downward-trending earnings forecast, and a much greater likelihood its share price will decline as well.

Thus, the more stocks you own with a #1 or #2 Rank and Scores of A or B, the better.

Stock to Watch: Aecom Technology (ACM)

AECOM is a leading solutions provider for supporting professional, technical and management solutions for diverse industries across end markets like transportation, facilities, government as well as those in environmental, energy and water businesses.

ACM is a #2 (Buy) on the Zacks Rank, with a VGM Score of A.

Additionally, the company could be a top pick for growth investors. ACM has a Growth Style Score of B, forecasting year-over-year earnings growth of 12.8% for the current fiscal year.

For fiscal 2025, two analysts revised their earnings estimate upwards in the last 60 days, and the Zacks Consensus Estimate has increased $0.15 to $5.10 per share. ACM boasts an average earnings surprise of 5.2%.

With a solid Zacks Rank and top-tier Growth and VGM Style Scores, ACM should be on investors' short list.

Zacks Investment Research

Shares of MasTec (MTZ) have been strong performers lately, with the stock up 21.2% over the past month. The stock hit a new 52-week high of $150.12 in the previous session. MasTec has gained 95.4% since the start of the year compared to the 29.7% move for the Zacks Construction sector and the 108.3% return for the Zacks Building Products - Heavy Construction industry.

What's Driving the Outperformance?

The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on October 31, 2024, MasTec reported EPS of $1.63 versus consensus estimate of $1.23.

For the current fiscal year, MasTec is expected to post earnings of $3.63 per share on $12.22 billion in revenues. This represents an 84.26% change in EPS on a 1.87% change in revenues. For the next fiscal year, the company is expected to earn $5.28 per share on $13.27 billion in revenues. This represents a year-over-year change of 45.45% and 8.61%, respectively.

Valuation Metrics

MasTec may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.

On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.

MasTec has a Value Score of C. The stock's Growth and Momentum Scores are A and B, respectively, giving the company a VGM Score of A.

In terms of its value breakdown, the stock currently trades at 40.8X current fiscal year EPS estimates, which is a premium to the peer industry average of 22.2X. On a trailing cash flow basis, the stock currently trades at 15.9X versus its peer group's average of 15.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.

Zacks Rank

We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, MasTec currently has a Zacks Rank of #1 (Strong Buy) thanks to favorable earnings estimate revisions from covering analysts.

Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if MasTec fits the bill. Thus, it seems as though MasTec shares could have potential in the weeks and months to come.

How Does MTZ Stack Up to the Competition?

Shares of MTZ have been soaring, and the company still appears to be a decent choice, but what about the rest of the industry? One industry peer that looks good is EMCOR Group, Inc. (EME). EME has a Zacks Rank of # 1 (Strong Buy) and a Value Score of D, a Growth Score of B, and a Momentum Score of B.

Earnings were strong last quarter. EMCOR Group, Inc. beat our consensus estimate by 16.23%, and for the current fiscal year, EME is expected to post earnings of $22.24 per share on revenue of $14.67 billion.

Shares of EMCOR Group, Inc. have gained 17.9% over the past month, and currently trade at a forward P/E of 24.83X and a P/CF of 32.13X.

The Building Products - Heavy Construction industry is in the top 14% of all the industries we have in our universe, so it looks like there are some nice tailwinds for MTZ and EME, even beyond their own solid fundamental situation.

Zacks Investment Research