MTZ Stock Hits 52-Week High: Should You Wait for a Dip or Buy Now?

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

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

Tutor Perini (TPC) has been one of the most searched-for stocks on Zacks.com lately. So, you might want to look at some of the facts that could shape the stock's performance in the near term.

Over the past month, shares of this construction company have returned +6.7%, compared to the Zacks S&P 500 composite's +3.8% change. During this period, the Zacks Building Products - Heavy Construction industry, which Tutor Perini falls in, has gained 17.9%. The key question now is: What could be the stock's future direction?

While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.

Revisions to Earnings Estimates

Rather than focusing on anything else, we at Zacks prioritize evaluating the change in a company's earnings projection. This is because we believe the fair value for its stock is determined by the present value of its future stream of earnings.

We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.

For the current quarter, Tutor Perini is expected to post earnings of $0.30 per share, indicating a change of +133% from the year-ago quarter. The Zacks Consensus Estimate has changed -3.2% over the last 30 days.

The consensus earnings estimate of -$1.30 for the current fiscal year indicates a year-over-year change of +60.6%. This estimate has changed -47% over the last 30 days.

For the next fiscal year, the consensus earnings estimate of $2 indicates a change of +253.9% from what Tutor Perini is expected to report a year ago. Over the past month, the estimate has remained unchanged.

With an impressive externally audited track record, our proprietary stock rating tool -- the Zacks Rank -- is a more conclusive indicator of a stock's near-term price performance, as it effectively harnesses the power of earnings estimate revisions. The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #3 (Hold) for Tutor Perini.

The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:

12 Month EPS

Projected Revenue Growth

Even though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.

In the case of Tutor Perini, the consensus sales estimate of $1.09 billion for the current quarter points to a year-over-year change of +6.8%. The $4.35 billion and $5.03 billion estimates for the current and next fiscal years indicate changes of +12.1% and +15.6%, respectively.

Last Reported Results and Surprise History

Tutor Perini reported revenues of $1.08 billion in the last reported quarter, representing a year-over-year change of +2.1%. EPS of -$1.92 for the same period compares with -$0.71 a year ago.

Compared to the Zacks Consensus Estimate of $1.13 billion, the reported revenues represent a surprise of -4.56%. The EPS surprise was -7.87%.

Over the last four quarters, Tutor Perini surpassed consensus EPS estimates two times. The company topped consensus revenue estimates two times over this period.

Valuation

Without considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.

Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.

As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.

Tutor Perini is graded B on this front, indicating that it is trading at a discount to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.

Bottom Line

The facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Tutor Perini. However, its Zacks Rank #3 does suggest that it may perform in line with the broader market in the near term.

Zacks Investment Research