Core Insights - Three stocks with strong momentum and a Zacks Rank 1 are highlighted for investors: Lumentum Holdings Inc., FIGS, Inc., and Everus Construction Group, Inc. [1][2][3] Company Summaries - **Lumentum Holdings Inc. (LITE)**: - Zacks Consensus Estimate for current year earnings increased by 11.1% over the last 60 days - Shares gained 108.7% over the last three months, while the S&P 500 declined by 5.8% - Momentum Score of A [1] - **FIGS, Inc. (FIGS)**: - Zacks Consensus Estimate for current year earnings increased by 33.3% over the last 60 days - Shares gained 36.4% over the past three months, compared to the S&P 500's decline of 5.9% - Momentum Score of A [2] - **Everus Construction Group, Inc. (ECG)**: - Zacks Consensus Estimate for current year earnings increased by 11.6% over the last 60 days - Shares gained 38.0% over the last three months, while the S&P 500 declined by 5.9% - Momentum Score of A [3]

Core Viewpoint - Everus Construction Group, Inc. (ECG) has experienced a bearish trend with an 8.5% loss over the past week, but the formation of a hammer chart pattern suggests a potential trend reversal as buying interest may be emerging [1][2]. Technical Analysis - The hammer chart pattern indicates a potential bottom in a downtrend, where the stock opens lower, makes a new low, but then finds support and closes near its opening price, signaling that bears may have lost control [4][5]. - Hammer candles can appear on various timeframes and are utilized by both short-term and long-term investors [5]. Fundamental Analysis - There has been a positive trend in earnings estimate revisions for ECG, with a 21.9% increase in the consensus EPS estimate for the current year over the last 30 days, indicating that analysts expect better earnings than previously predicted [7][8]. - ECG holds a Zacks Rank of 1 (Strong Buy), placing it in the top 5% of over 4,000 ranked stocks, which typically outperform the market [9][10].

Core Insights - The U.S. equity markets have experienced volatility, with gains in blue-chip tech companies offset by concerns over AI firm valuations, leading to expectations of a market correction [2] - Investors are anxious about the Federal Reserve's potential actions regarding interest rates amid a government shutdown that has created a data vacuum [2] - The upcoming September nonfarm payrolls report is highly anticipated for insights into economic trends and Federal Reserve decisions [3] Momentum Investing Strategy - Momentum investing is characterized by "buying high and selling higher," capitalizing on established trends in stock prices [4] - This strategy has historically generated alpha across various market conditions, though it requires skill to identify trends effectively [5] - A screening strategy has been developed to identify stocks with long-term price momentum and short-term pullbacks [5] Screening Parameters - The screening process selects the top 50 stocks based on the best percentage price change over the past 52 weeks [6] - From these, the 10 worst performers over the last week are chosen to identify those experiencing short-term pullbacks [7] - Stocks with a Zacks Rank 1 (Strong Buy) and a Momentum Style Score of B or better are prioritized for selection [8] Selected Stocks - Seagate Technology Holdings plc (STX) has seen a 169.4% increase over the past year but a recent decline of 11.1%, with a Momentum Score of B [12] - Robinhood Markets, Inc. (HOOD) has surged 231.3% in the past year but dropped 14.6% in the last week, holding a Momentum Score of A [14] - Everus Construction Group, Inc. (ECG) has increased by 46.7% over the past year but declined 13.7% recently, also with a Momentum Score of A [15]

Core Viewpoint - Everus Construction Group, Inc. (ECG) shows potential as a strong investment opportunity due to significant revisions in earnings estimates, indicating a positive earnings outlook and potential for continued stock price appreciation [1][2]. Earnings Estimate Revisions - Analysts have increased their earnings estimates for ECG, reflecting growing optimism about the company's financial prospects, which is expected to positively influence its stock price [2][3]. - The current-quarter earnings estimate is $0.72 per share, representing a 7.5% increase from the previous year, with a notable 25.44% rise in the Zacks Consensus Estimate over the last 30 days due to two upward revisions [6]. - For the full year, the earnings estimate stands at $3.26 per share, marking a 16.0% increase from the prior year, with a 10.71% boost in the consensus estimate over the same period [7][8]. Zacks Rank and Performance - ECG has achieved a Zacks Rank 1 (Strong Buy), indicating strong potential for outperformance based on the positive earnings estimate revisions [9]. - Historically, stocks with a Zacks Rank 1 have generated an average annual return of +25% since 2008, suggesting that ECG may follow a similar trend [3][9]. Recent Stock Performance - ECG shares have appreciated by 18.1% over the past four weeks, reflecting investor confidence in the company's earnings growth prospects driven by favorable estimate revisions [10].

Core Viewpoint - Everus Construction Group, Inc. (ECG) has received a Zacks Rank 1 (Strong Buy) upgrade, indicating a positive earnings outlook that may lead to increased stock prices [1][3]. Earnings Estimates and Stock Price Movement - The Zacks rating system is based on changes in earnings estimates, which are strongly correlated with near-term stock price movements [4][6]. - Rising earnings estimates for ECG suggest an improvement in the company's underlying business, which could attract investor interest and drive the stock price higher [5][10]. Zacks Rank System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with Zacks Rank 1 stocks historically generating an average annual return of +25% since 1988 [7][9]. - Only the top 5% of Zacks-covered stocks receive a "Strong Buy" rating, indicating superior earnings estimate revisions [10]. Earnings Estimate Revisions for ECG - Analysts have raised their earnings estimates for ECG, with the Zacks Consensus Estimate increasing by 29.4% over the past three months [8]. - The expected earnings per share for ECG for the fiscal year ending December 2025 is $3.26, showing no year-over-year change [8].

Core Insights - Five stocks have been added to the Zacks Rank 1 (Strong Buy) List, indicating strong potential for investment Group 1: Company Earnings Estimates - Encore Capital Group, Inc. (ECPG) has seen its earnings estimate increase by 18.5% over the last 60 days [1] - PJT Partners Inc. (PJT) has experienced a 9.6% increase in its earnings estimate over the last 60 days [2] - Everus Construction Group, Inc. (ECG) has had its earnings estimate rise by 11.6% in the past 60 days [3] - United Fire Group, Inc. (UFCS) has seen a significant increase of 29.7% in its earnings estimate over the last 60 days [3] - BioLife Solutions, Inc. (BLFS) has experienced the largest increase, with a 40% rise in its earnings estimate over the last 60 days [4]

Revenue and Income - Total operating revenues for the three months ended September 30, 2025, were $986.8 million, a 29.6% increase from $760.9 million in the same period of 2024[84][88] - Total contract revenues for the nine months ended September 30, 2025, reached $2.75 billion, up 30.6% from $2.11 billion in the same period of 2024[86][87] - The company recognized a net increase in revenues of $12.7 million for the three months ended September 30, 2025, related to previously recognized deferred revenues[95] - For the three months ended September 30, 2025, consolidated total operating revenues were $990.724 million, an increase from $765.399 million in the same period of 2024, representing a growth of approximately 29.5%[158] - Net income for the three months ended September 30, 2025, was $56,977,000, compared to $41,767,000 in 2024, reflecting a 36.4% increase[137] - Basic EPS for the three months ended September 30, 2025, was $1.12, up from $0.82 in 2024, marking a 36.6% increase[137] - For the nine months ended September 30, 2025, total consolidated income before income taxes was $188.513 million, compared to $138.762 million for the same period in 2024, marking a growth of approximately 35.8%[159] Costs and Expenses - Costs incurred on uncompleted contracts totaled $7.46 billion as of September 30, 2025, compared to $7.03 billion as of December 31, 2024[90] - Selling, general and administrative expenses for the three months ended September 30, 2025, were $51.8 million, an increase of $15.6 million, or 43.1%, from $36.2 million for the same period in 2024[212] - Interest expense for the three months ended September 30, 2025, was $5.4 million, an increase of $2.6 million, or 92.9%, from $2.8 million for the same period in 2024[215] - Total stock-based compensation expense for the nine months ended September 30, 2025, was $4.8 million, compared to $1.0 million for the same period in 2024[140] - Interest expense for the nine months ended September 30, 2025, was $16.4 million, an increase of $7.6 million, or 86.4%, from $8.8 million for the same period in 2024[229] Assets and Liabilities - The company reported a net contract liability of $19.4 million as of September 30, 2025, compared to $40.3 million as of December 31, 2024, indicating improved cash flow management[90][93] - Remaining performance obligations amounted to $2.69 billion as of September 30, 2025, with $2.23 billion expected to be recognized within 12 months[97] - Contract assets increased to $250.5 million as of September 30, 2025, from $167.0 million as of December 31, 2024[93][94] - The company has a total long-term debt of $270.1 million as of September 30, 2025, down from $280.6 million as of December 31, 2024[114] - Working capital increased to $523.5 million as of September 30, 2025, up from $403.9 million as of December 31, 2024[284] Financial Ratios and Covenants - The Credit Agreement requires the company to maintain a maximum consolidated total net leverage ratio of 3.00 to 1.00 and a minimum interest coverage ratio of 3.00 to 1.00[125] - As of September 30, 2025, the consolidated total net leverage ratio was 3.00:1.00, with an option to increase to 3.50:1.00 for qualifying acquisitions[280] - Compliance with financial covenants was maintained as of both September 30, 2025, and December 31, 2024[283] Backlog and Project Opportunities - Backlog as of September 30, 2025, was estimated at $2,382.5 million, a decrease from $2,946.2 million as of December 31, 2024[264] - E&M backlog increased to $2,087.5 million as of September 30, 2025, compared to $2,570.4 million as of December 31, 2024, reflecting growth in the commercial end market[265] - The Company reported strong project opportunities in specialty contracting markets, particularly in data center, undergrounding, and hospitality work, contributing to a robust backlog[195] Customer Concentration and Risks - Revenue from a single customer accounted for approximately 17% of total operating revenues for the three months ended September 30, 2025, indicating a significant customer concentration risk[161] - For the E&M segment, two customers accounted for approximately 22% and 11% of total E&M segment revenues for the three months ended September 30, 2025, highlighting reliance on key customers[162] - Trade receivables from a single customer accounted for approximately 17% of total trade receivables as of September 30, 2025, indicating potential credit risk exposure[164] Legal and Regulatory Matters - The company accrued estimated litigation-related contingent liabilities of $3.7 million as of September 30, 2025, indicating potential financial exposure from ongoing legal matters[171] Market Conditions and Future Outlook - The Company anticipates continued increases in insurance costs due to economic inflation and rising losses in the insurance industry, impacting future project budgets and profitability[191] - The U.S. construction services industry is highly fragmented, with competition influenced by technical expertise, service pricing, and operational resources[193] - The company is focused on growing total revenues, expanding margins, managing costs, and generating cash to increase operating income despite rising costs[192]

Financial Data and Key Metrics Changes - For Q3 2025, revenue increased by 30% year-over-year, reaching $986.8 million, driven by strong performance in the electrical and mechanical (E&M) segment [15][5] - EBITDA for the third quarter rose by 37% from the previous year, totaling $89 million, with an EBITDA margin of 9%, up 50 basis points from 8.5% [15][16] - Total backlog at the end of Q3 was $2.95 billion, up 2% from the same period last year and up 6% from the end of 2024 [7][16] Business Line Data and Key Metrics Changes - E&M segment revenues increased by 43% to $767.3 million, primarily driven by growth in commercial and renewables markets, particularly data centers [15][17] - T&D segment revenues were $223.4 million, a slight decrease from $228.5 million last year, attributed to timing and a decline in utility work [15][18] - T&D backlog increased by 19% year-over-year, reflecting strong demand in the utility end market [16] Market Data and Key Metrics Changes - The company noted robust demand for power transmission infrastructure upgrades in the U.S., driven by factors such as data centers and electric vehicle adoption [9][10] - The data center submarket continues to show strong demand with no signs of weakening, contributing significantly to revenue and backlog growth [9][10] Company Strategy and Development Direction - The company is focused on disciplined project selection and maintaining a strong pipeline of opportunities that align with strategic objectives [8][10] - The "Forever strategy" emphasizes attracting and retaining talent, which is critical for supporting growth objectives and operational excellence [11][12] - The company is actively evaluating M&A opportunities to expand geographically and enhance service offerings in both T&D and E&M segments [51] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to sustain growth momentum into 2026, supported by a strong backlog and favorable market trends [22][23] - The company anticipates a solid finish to the year, raising its full-year revenue guidance to a range of $3.55 billion to $3.65 billion [21][22] Other Important Information - Operating cash flows for the first nine months of 2025 were $108.6 million, up from $82.7 million in the same period last year [19] - The company plans to invest between $65 million and $70 million in capital expenditures for 2025 [19] Q&A Session Summary Question: Margin sustainability and future expectations - Management indicated that while margin expansion is challenging to forecast, strong execution has led to improved margins this quarter, and they will continue to focus on margin uplift [27][28] Question: Data center project strength and timelines - Management highlighted strong demand for data center projects in regions like the Upper Midwest and Southwest, with ongoing visibility into future projects [29][31] Question: Organic growth expectations for next year - Management remains optimistic about organic growth, citing strong demand and a diversified end market strategy [36][37] Question: Pre-construction projects and backlog conversion - Some projects in pre-construction have accelerated, contributing to solid revenue this quarter, while others remain in early phases, providing visibility for the next year [40][42] Question: Las Vegas market activity and resource allocation - Management noted diversification in the Las Vegas market, with ongoing projects in hospitality and data centers, and the ability to pivot resources as needed [44][45] Question: Data center end market revenue progression - Data centers have become a significant part of the business, with strong demand and a long runway for opportunities [48][49] Question: M&A opportunities and capital deployment - The company is actively pursuing M&A opportunities, with a broader and deeper funnel than a year ago, focusing on high-integrity companies that align with their strategic priorities [51]

Financial Data and Key Metrics Changes - For Q3 2025, revenue increased by 30% year-over-year, reaching $986.8 million, driven by strong performance in the electrical and mechanical (E&M) segment [15][5] - EBITDA for the third quarter rose by 37% compared to the previous year, totaling $89 million, with an EBITDA margin of 9%, up 50 basis points from 8.5% [15][16] - Total backlog at the end of Q3 was $2.95 billion, reflecting a 2% increase from the same period last year and a 6% increase from the end of 2024 [7][16] Business Line Data and Key Metrics Changes - E&M segment revenues increased by 43% to $767.3 million, primarily driven by growth in commercial and renewables markets, particularly in the data center submarket [15][17] - T&D segment revenues were $223.4 million, a slight decrease from $228.5 million last year, attributed to timing and reduced storm work, while T&D backlog increased by 19% year-over-year [15][18] Market Data and Key Metrics Changes - The demand for power transmission infrastructure upgrades in the U.S. is unprecedented, driven by factors such as data centers, electric vehicle adoption, and industrial reshoring, creating a multi-year tailwind for T&D services [9][10] - The data center submarket continues to show strong demand with no signs of weakening, with significant projects located in the Upper Midwest, Southwest, and Pacific Northwest [31][49] Company Strategy and Development Direction - The company is focused on maintaining a disciplined approach to project selection, emphasizing opportunities that align with strategic objectives and offer attractive returns [8][10] - The "Forever strategy" aims to attract and retain key talent, with significant investments in training and development to support growth objectives [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue building backlog momentum, citing robust underlying demand drivers across key markets [7][9] - The company raised its 2025 revenue guidance to a range of $3.55 billion to $3.65 billion, reflecting strong business momentum and elevated backlog levels [21][22] Other Important Information - Operating cash flows for the first nine months of 2025 were $108.6 million, up from $82.7 million in the same period last year, with CapEx increasing to $42.1 million [19] - The company is actively evaluating M&A opportunities, with a broader and deeper funnel than a year ago, focusing on companies that align with its strategic priorities [51] Q&A Session Summary Question: Margin sustainability and future expectations - Management acknowledged that while margin expansion is challenging to forecast, strong execution has led to improved margins this fiscal year, and they will continue to focus on margin uplift [27][28] Question: Data center project strength and timelines - Management highlighted strong demand for data center projects in specific regions and noted that larger projects are entering the backlog earlier than expected [29][31] Question: Organic growth expectations for next year - Management remains optimistic about strong demand for services and believes they can secure sufficient backlog to support growth, despite potential cyclicality [36][37] Question: Pre-construction projects and backlog conversion - Some projects in pre-construction have accelerated, contributing to solid revenue, while others remain in early phases, providing visibility for the next year [40][42] Question: Local market activity in Las Vegas - Management reported a diversified approach in Las Vegas, with ongoing projects in hospitality and data centers, and noted that their backlog in these areas has increased [44][45] Question: Data center end market revenue progression - Management confirmed that data centers have become a significant part of their business, with strong demand and a long runway for opportunities [48][49] Question: M&A opportunities and capital deployment - The company is in a strong position to pursue meaningful acquisitions, with an active corporate development team and a focus on strategic alignment [51]

Financial Data and Key Metrics Changes - For Q3 2025, revenue reached $986.8 million, a 30% increase compared to the same period last year, driven by strong growth in the electrical and mechanical (E&M) segment [15][6] - EBITDA for the third quarter was $89 million, reflecting a 37% increase from the prior year, with an EBITDA margin of 9%, up 50 basis points from 8.5% in the previous year [15][16] - Total backlog at the end of Q3 was $2.95 billion, up 2% year-over-year and 6% from the end of 2024, indicating solid growth despite strong revenue performance [7][16] Business Line Data and Key Metrics Changes - E&M segment revenues increased 43% to $767.3 million, primarily driven by growth in commercial and renewables markets, particularly in the data center submarket [15][17] - T&D segment revenues were $223.4 million, a slight decrease from $228.5 million last year, attributed to timing and a decline in utility work, although T&D EBITDA increased 11% to $33.8 million [15][18] Market Data and Key Metrics Changes - The T&D backlog increased by 19% year-over-year, driven by utility end market growth, particularly in undergrounding and substation work [16][18] - The company is experiencing strong demand in the data center submarket, with no signs of weakening, and is strategically positioned in key geographic locations for data center development [9][10] Company Strategy and Development Direction - The company is focused on maintaining a disciplined approach to project selection, emphasizing opportunities that align with strategic objectives and offer attractive returns [8][10] - The "Forever" strategy continues to underpin sustainable growth, with a strong emphasis on attracting and retaining talent, which is critical for supporting growth objectives [11][12] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ability to continue building backlog momentum, citing robust underlying demand drivers across key markets [7][9] - The company anticipates ongoing strong momentum into 2026, supported by favorable trends in core markets and a solid backlog position [20][22] Other Important Information - The company raised its 2025 guidance, now forecasting revenues between $3.55 billion and $3.65 billion, and EBITDA between $290 million and $300 million, reflecting strong business momentum [20][21] - Operating cash flows for the first nine months of 2025 were $108.6 million, up from $82.7 million in the same period last year, indicating strong operational results [19] Q&A Session Summary Question: Thoughts on margin sustainability - Management noted that execution upside is hard to forecast, but strong execution has led to margin improvements this fiscal year, with a focus on maintaining this uplift going forward [27][28] Question: Data center project strength and timelines - Management highlighted strong demand for data center projects, particularly in the Upper Midwest and Southwest regions, with ongoing visibility into future projects [29][30] Question: Organic growth expectations for next year - Management remains optimistic about strong demand for services and the ability to secure backlog to support growth, despite potential cyclicality [35][36] Question: Status of pre-construction projects - Some projects in pre-construction have accelerated, contributing to solid revenue, while others remain in early phases, providing visibility for the next year [39][40] Question: Las Vegas market activity - Management indicated a diversified approach in Las Vegas, with ongoing projects in hospitality and data centers, and a positive outlook for 2025 despite potential slowdowns [42][44] Question: Data center end market revenue progression - Data centers have become a significant part of the business, with strong demand and a long runway for opportunities, while maintaining diversification to mitigate risks [48][49] Question: M&A opportunities and strategy - The company is actively evaluating M&A opportunities, with a broader and deeper funnel than a year ago, focusing on companies that align with strategic priorities [51][52]