Value
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 5.0 |
| P/S | 9.1 |
| EV/EBITDA | 1.9 |
| Fwd P/E | 6.0 |
| PEG | 10.0 |
| Analyst target | 9.0 |
- ▸Forward P/E: 21.4x
- ▸PEG: 0.40
- ▸Attractively valued
EME · Why this verdict
Why EMCOR Group (EME) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.3/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
EMCOR Group has beaten consensus EPS estimates in each of the four most recent quarters averaging 10.4% above expectations, backs a wide economic moat with 39% return on equity that ranks superior to peers, and carries growth and quality characteristics consistent with a compounding business — but with only 3.3% headroom to the price target and a 0.47-to-1 unfavorable reward-to-risk ratio, the setup favors holding an existing position rather than adding at current levels.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has beaten consensus EPS estimates in each of the four most recent quarters with an average positive surprise of 10.4%, demonstrating consistent execution above market expectations across multiple reporting periods — the most recent quarter alone came in 15.9% above consensus. Catalyst breakdown | Earnings beats continuing for at least two more consecutive quarters with average surprise remaining above 5%. | →Stable |
| CounterA perfect four-quarter beat streak raises the consensus bar for future quarters; estimates typically reset higher after repeated outperformance, making the next beat harder to achieve without a step-change in underlying demand volumes. | ||
The business carries a wide economic moat alongside an excellent return on equity of 39% — which ranks superior to sector peers — and is assessed as having compounder-quality characteristics: strong returns combined with above-average growth, allowing reinvestment at above-average rates over time. Quality breakdown | Return on equity remaining above 25% and the wide moat assessment remaining intact for the next 12 months. | →Stable |
| CounterReturn on equity inflated by buyback-driven equity reduction rather than purely operational outperformance may compress toward peer levels if capital allocation priorities shift or leverage normalizes — leading with return on capital may be a more durable signal. | ||
With only 3.3% remaining headroom to the price target and a reward-to-risk ratio of 0.47-to-1 in an unfavorable direction, the current entry point does not offer adequate compensation for the downside risk — the setup favors patience over new capital commitment at prevailing prices. Engine gate (failed) | Upside to the take-profit target expanding above 10%, driven either by a price pullback or an upward revision to the price target on improved earnings delivery. | Tripped→Stable |
| CounterIf earnings continue to beat and the business compounds at its current rate, the price target itself may be revised upward, restoring a wider margin of safety without requiring a price decline. | ||
Revenue is heavily concentrated domestically at 97% and in construction operations representing 72% of total sales, limiting diversification and creating dependency on a single end-market that could be disrupted by changes in domestic construction activity or government spending priorities. Bear case | Non-domestic revenue growing to exceed 5% of total revenue, or non-construction revenue mix rising above 30% of total sales, signaling early-stage diversification. | ↑Improving |
| CounterDeep specialization in domestic construction services has historically been the source of the company's competitive advantage rather than a risk — the relationships, expertise, and scale accumulated over time are not easily replicated by more diversified competitors. | ||
The company has beaten consensus EPS estimates in each of the four most recent quarters with an average positive surprise of 10.4%, demonstrating consistent execution above market expectations across multiple reporting periods — the most recent quarter alone came in 15.9% above consensus.
→StableCatalyst breakdown
- Expectation
- Earnings beats continuing for at least two more consecutive quarters with average surprise remaining above 5%.
CounterA perfect four-quarter beat streak raises the consensus bar for future quarters; estimates typically reset higher after repeated outperformance, making the next beat harder to achieve without a step-change in underlying demand volumes.
The business carries a wide economic moat alongside an excellent return on equity of 39% — which ranks superior to sector peers — and is assessed as having compounder-quality characteristics: strong returns combined with above-average growth, allowing reinvestment at above-average rates over time.
→StableQuality breakdown
- Expectation
- Return on equity remaining above 25% and the wide moat assessment remaining intact for the next 12 months.
CounterReturn on equity inflated by buyback-driven equity reduction rather than purely operational outperformance may compress toward peer levels if capital allocation priorities shift or leverage normalizes — leading with return on capital may be a more durable signal.
With only 3.3% remaining headroom to the price target and a reward-to-risk ratio of 0.47-to-1 in an unfavorable direction, the current entry point does not offer adequate compensation for the downside risk — the setup favors patience over new capital commitment at prevailing prices.
Tripped→StableEngine gate (failed)
- Expectation
- Upside to the take-profit target expanding above 10%, driven either by a price pullback or an upward revision to the price target on improved earnings delivery.
CounterIf earnings continue to beat and the business compounds at its current rate, the price target itself may be revised upward, restoring a wider margin of safety without requiring a price decline.
Revenue is heavily concentrated domestically at 97% and in construction operations representing 72% of total sales, limiting diversification and creating dependency on a single end-market that could be disrupted by changes in domestic construction activity or government spending priorities.
↑ImprovingBear case
- Expectation
- Non-domestic revenue growing to exceed 5% of total revenue, or non-construction revenue mix rising above 30% of total sales, signaling early-stage diversification.
CounterDeep specialization in domestic construction services has historically been the source of the company's competitive advantage rather than a risk — the relationships, expertise, and scale accumulated over time are not easily replicated by more diversified competitors.
Per-dimension breakdown
Quality
5.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 7.8 |
| Gross margin | 0.0 |
| Op margin | 3.5 |
| Net margin | 3.8 |
| Current ratio | 4.8 |
| FCF quality | 5.1 |
| Moat | 7.5 |
| Piotroski F | 6.7 |
- ▸Excellent ROE: 39%
- ▸Earnings quality warning: 67% FCF/NI
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
Growth
7.7/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 7.4 |
| EPS growth | 8.0 |
Momentum
1.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 3.0 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 2.2 |
| Volume | 2.5 |
- ▸Capitulation risk (RSI 22, below 200MA)
- ▸Volume distribution (falling OBV)
- ▸Below 200-MA but MA still rising (+3.0%/30d) — pullback in uptrend, not confirmed weakness
Sentiment
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 6.7 |
| Price target | 9.4 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (7.0) — signal dampened
- ▸Analyst upside: 45%
Insider
5.9/10data confidence 100%| Component | Sub-score |
|---|---|
| materiality | 4.5 |
| insider conviction | 2.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Modest insider selling — $11,194,966 (0.036% of mkt cap)
- ▸Institutions accumulating
Peer rank
7.0/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.8 |
| quality rank | 7.8 |
| growth rank | 5.6 |
- ▸Superior ROE vs peers
- ▸Conservative debt levels
Technical
7.9/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.3 |
| 52w position | 4.4 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 8.5 |
| days to cover | 8.0 |
| volatility | 2.3 |
| put call | 10.0 |
| implied vol | 3.3 |
| max pain risk | 3.0 |
| beta | 6.5 |
| debt equity | 9.5 |
- ▸High IV: 60%
- ▸Above max pain $560
- ▸Concentration risks: 2 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
6.9/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 7.7 |
| dividend safety | 6.8 |
- ▸Perfect beat streak: 4Q
- ▸Earnings in 1 days
How the verdict was assembled
Engine trigger
Earnings in 1 day. Wait until post-earnings.
Engine technical detail
verdict_path:
L3:NEWS_BLOCK|ENTRY_STICKY:PRIOR_STILL_VIABLEPassed (6)
- ASYMMETRY:3.2>=1.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:1.7<4.5
- EARNINGS_PROXIMITY:1d<=7d
Warning (0)
none
Reward-to-Risk
3.22
Upside
+26.3%
Downside
8.1%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
A recent news event triggered an L3 news-block on the verdict path. Trigger: Earnings in 1 day. Wait until post-earnings. The 10-dimension scores remain Technical at 7.9 (strongest), but MOMENTUM:1.7<4.5 also fails — the news block is the proximate trigger, not the sole driver.
The strongest dimensions are Technical at 7.9, Growth at 7.7, and Value at 7.1; the weakest are Momentum at 1.7, Quality at 5.5, and Insider at 5.9. The V9 engine flagged 2 failed gates, producing an asymmetric reward-to-risk of 3.22 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% for 2 consecutive quarters.
- P2Wide Moat Superior Returns
Trip ifReturn on equity falls below 25% for 2 consecutive quarters.
- P3Thin Upside Unfavorable AsymmetryTripped
Trip ifUpside to take profit expands above 10% at prevailing market price.
- P4Geographic Product Concentration
Trip ifNon-domestic revenue grows above 5% of total revenue, or non-construction revenue rises above 30% of total sales.