Why Emcor Group Plunged Today

Core Insights - Emcor Group's shares dropped 17% despite beating analyst expectations for revenue and earnings per share (EPS) due to insufficient forward guidance after a significant stock increase of 70% in 2025 [1][2][9] Financial Performance - In Q3, Emcor reported a revenue increase of 16.4% to $4.3 billion and EPS growth of 13.3% to $6.57, both surpassing analyst forecasts, although there was slight margin compression [3] - The Electrical Construction & Facilities Services segment experienced a remarkable growth of 52.1%, while other segments grew in the low-to-mid-single digits [3] Guidance and Expectations - Management's full-year revenue guidance is now between $16.7 billion and $16.8 billion, compared to the previous range of $16.4 billion to $16.9 billion, indicating a wider range but maintaining the upper limit [4] - The bottom end of the EPS estimate was raised, but the top end remained unchanged at $25.75, which did not meet investor expectations [4] Long-term Contracts - Remaining performance obligations, which represent long-term contracts yet to be fulfilled, increased by 29% to a record high of $12.61 billion, indicating strong future revenue potential [5] Valuation and Market Position - Following the stock's decline, shares are trading at 25.6 times 2025 earnings estimates, which is considered reasonable given the company's potential benefits from data center demand [7] - The AI-exposed electrical segment constitutes about 31% of Emcor's U.S. operations, suggesting that as this segment grows, overall growth may stabilize or accelerate [8]