MYR Group (MYRG) AI Stock Analysis

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MYR Group

(NASDAQ:MYRG)

Rating:72Outperform

Price Target:―

MYR Group exhibits strong financial health with consistent revenue growth and notable cash flow strength. The technical analysis shows positive momentum but warns of overbought conditions. Despite a high valuation, the company's robust earnings call and strategic corporate events support a favorable outlook. Overall, MYR Group presents a balanced investment case with growth potential tempered by valuation concerns.

MYR Group (MYRG) vs. SPDR S&P 500 ETF (SPY)

Market Cap

$2.55B

Dividend YieldN/A

Average Volume (3M)224.41K

Price to Earnings (P/E)76.0

Beta (1Y)1.76

Revenue Growth-7.33%

EPS Growth-57.86%

CountryUS

Employees8,500

SectorIndustrials

Sector Strength93

IndustryEngineering & Construction

Share Statistics

EPS (TTM)1.45

Shares Outstanding15,522,834

10 Day Avg. Volume161,489

30 Day Avg. Volume224,409

Financial Highlights & Ratios

PEG Ratio4.05

Price to Book (P/B)4.54

Price to Sales (P/S)0.00

P/FCF Ratio24.28

Enterprise Value/Market Cap0.99

Enterprise Value/Revenue0.18

Enterprise Value/Gross Profit8.46

Enterprise Value/Ebitda5.23

Forecast

1Y Price Target

$156.20

Price Target Upside-5.66% Downside

Rating ConsensusStrong Buy

Number of Analyst Covering5

MYR Group Business Overview & Revenue Model

Company DescriptionMYR Group Inc. (MYRG) is a leading specialty contractor serving the electrical infrastructure market throughout the United States and Canada. The company provides a wide range of services, including electrical construction, maintenance, and repair services to utility, commercial, and industrial customers. MYR Group's operations are divided into two segments: Transmission and Distribution (T&D), which focuses on constructing and maintaining high-voltage transmission lines, substations, and distribution systems, and Commercial & Industrial (C&I), which specializes in electrical contracting services for large-scale commercial and industrial projects.

How the Company Makes MoneyMYR Group makes money primarily through its contracts for electrical construction and maintenance services. In the Transmission and Distribution segment, the company generates revenue by constructing and maintaining high-voltage transmission lines, substations, and distribution systems for utility companies, which require ongoing infrastructure investments and upgrades. The Commercial & Industrial segment earns revenue from providing electrical contracting services for large-scale commercial and industrial projects, including data centers, manufacturing facilities, and renewable energy installations. MYR Group's revenue is driven by long-term contracts with utilities and private sector clients, and it benefits from a stable demand for energy infrastructure maintenance and upgrades. Strategic partnerships and a strong reputation in the industry also contribute significantly to the company's earnings.

MYR Group Earnings Call Summary

Earnings Call Date:Apr 30, 2025

(Q1-2025)

% Change Since: 35.36%|

Next Earnings Date:Jul 23, 2025

Earnings Call Sentiment Neutral

The earnings call presented a mixed picture, with notable achievements in revenue growth, increased free cash flow, and a strong backlog. However, challenges such as decreased T&D revenues, a higher effective tax rate, and increased expenses were also evident. The sentiment reflects a balance between positive financial performance and operational challenges.

Q1-2025 Updates

Positive Updates

Increase in Overall Revenues and Profitability

First quarter 2025 revenues were $834 million, representing an increase of $18 million or 2.2% compared to the same period last year. Net income per diluted share increased by 29% compared to the same period last year.

Significant Improvement in Free Cash Flow

Free cash flow was $70 million compared to negative free cash flow of $18 million for the same period last year, reflecting increased operating cash flow and lower capital expenditures.

Strong Backlog and Market Opportunities

Total backlog as of March 31, 2025 was $2.64 billion, 9% higher than a year ago. The company is positioned to capture new opportunities in data centers, healthcare, industrial, and clean energy markets.

Positive Operating Income Margins

T&D operating income margin was 7.8% compared to 6.1% last year, and C&I operating income margin was 4.7% compared to 3.5% last year, due to favorable change orders and better-than-anticipated productivity.

Negative Updates

Decrease in Transmission and Distribution Revenues

First quarter T&D revenues were $462 million, a decrease of 5.8% compared to the same period last year, primarily due to continued selectivity on clean energy projects.

Higher Effective Tax Rate

The first quarter effective tax rate was 28.9% compared to 18% for the same period last year, primarily due to no stock compensation excess tax benefits in the first quarter of 2025.

Increased SG&A and Interest Expenses

First quarter 2025 SG&A expenses were $62.5 million, an increase of approximately $300,000 compared to the same period last year. Interest expense was $1.4 million, an increase of $300,000 due to higher average outstanding debt balances.

Company Guidance

During the MYR Group's First Quarter 2025 Earnings Results Conference Call, various key financial metrics were discussed, highlighting the company's performance and guidance. The first quarter of 2025 saw revenues of $834 million, marking a 2.2% increase from the previous year, with Transmission & Distribution (T&D) revenues generating $462 million, albeit a 5.8% decrease. Distribution projects contributed $192 million, while transmission accounted for $270 million. The Commercial & Industrial (C&I) segment posted revenues of $372 million, reflecting a 14.4% year-over-year increase. The company's gross margin rose to 11.6% from 10.6%, and T&D operating income margin improved to 7.8%, while C&I operating income margin increased to 4.7%. Net income reached $23 million, and net income per diluted share rose 29% to $1.45. Total backlog at the end of the quarter was $2.64 billion, with the T&D segment contributing $873 million and the C&I segment $1.77 billion. Operating cash flow surged to $83 million, and free cash flow turned positive at $70 million. Additionally, the company repurchased 639,000 shares, with $379 million in borrowing availability reported under the credit facility. The effective tax rate increased to 28.9%, and first-quarter EBITDA was $50 million. The company emphasized its focus on strategic growth and maintaining a strong financial position to capitalize on future opportunities.

MYR Group Financial Statement Overview

Summary

MYR Group's financial performance is solid with consistent revenue growth and impressive cash flow conversion. However, declining gross profit margins present a challenge. The balance sheet remains stable with low leverage, though profitability on equity could be enhanced. Overall, the company shows robust financial health.

Income Statement

Positive

MYR Group's income statement reveals a stable growth trajectory with a revenue growth rate of 0.54% from last year to TTM, following a 11.44% increase the year before. The company maintains healthy profitability, reflected by a net profit margin of 1.02% in the TTM period. However, the gross profit margin has shown a consistent decline from 11.37% in 2020 to 8.87% in the TTM. This suggests rising costs or pricing pressures. Despite these challenges, EBIT and EBITDA margins are holding steady, indicating operational efficiency improvements.

Balance Sheet

Positive

The balance sheet reflects a strong equity base with a debt-to-equity ratio of 0.24 in TTM, suggesting prudent financial leverage. The equity ratio has slightly decreased over time, from 43.11% in 2020 to 36.04% in TTM, but MYR Group still maintains a solid equity position. Return on equity in TTM is lower at 6.31% compared to 2020's 13.69%, indicating reduced profitability on shareholder investment. Overall, the balance sheet shows stability with manageable debt levels, though profitability on equity could improve.

Cash Flow

Positive

Cash flow analysis indicates robust cash generation, with operating cash flow to net income ratio at 4.70 in TTM, significantly improving from past years, highlighting strong cash conversion efficiency. Free cash flow growth rate is positive, with free cash flow to net income ratio at 2.87, suggesting effective capital expenditure management and strong cash generation relative to profits. The cash flow strength supports MYR Group's ability to fund operations and investments without relying heavily on external financing.

TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
3.38B	3.36B	3.64B	3.01B	2.50B	2.25B
	Gross Profit
299.76M	290.32M	364.40M	343.96M	324.98M	275.85M
	EBIT
62.59M	54.08M	129.09M	114.91M	118.56M	86.55M
	EBITDA
112.52M	118.21M	189.08M	170.70M	161.67M	130.19M
	Net Income Common Stockholders
34.63M	30.26M	90.99M	83.38M	85.01M	58.76M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
3.91M	3.46M	24.90M	51.04M	82.09M	22.67M
	Total Assets
1.58B	1.57B	1.58B	1.40B	1.12B	995.86M
	Total Debt
78.47M	119.99M	73.61M	74.55M	25.50M	52.08M
	Net Debt
74.56M	116.53M	48.71M	23.51M	-56.59M	29.41M
	Total Liabilities
919.77M	973.70M	927.54M	838.66M	601.99M	566.57M
	Stockholders Equity
663.72M	600.36M	651.20M	560.20M	519.10M	429.29M
Cash Flow		Free Cash Flow
99.49M	11.18M	-13.72M	90.43M	84.87M	130.81M
	Operating Cash Flow
162.71M	87.11M	71.02M	167.48M	137.23M	175.17M
	Investing Cash Flow
-54.20M	-67.21M	-79.13M	-185.73M	-49.30M	-40.93M
	Financing Cash Flow
-100.48M	-39.96M	-18.37M	-9.27M	-28.09M	-124.30M

MYR Group Technical Analysis

Technical Analysis Sentiment

Positive

Last Price165.57

Price Trends

50DMA

137.77

Positive

100DMA

135.01

Positive

200DMA

131.64

Positive

Market Momentum

MACD

6.07

Positive

RSI

68.04

Neutral

STOCH

81.83

Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MYRG, the sentiment is Positive. The current price of 165.57 is above the 20-day moving average (MA) of 161.04, above the 50-day MA of 137.77, and above the 200-day MA of 131.64, indicating a bullish trend. The MACD of 6.07 indicates Positive momentum. The RSI at 68.04 is Neutral, neither overbought nor oversold. The STOCH value of 81.83 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MYRG.

MYR Group Risk Analysis

MYR Group disclosed 32 risk factors in its most recent earnings report. MYR Group reported the most risks in the “Production” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

MYR Group Peers Comparison

Overall Rating

UnderperformOutperform

Sector (66)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
NVEE	80 Outperform	$1.45B	45.21	3.79%	―	8.65%	-22.72%
AGX	78 Outperform	$2.97B	33.02	30.48%	0.60%	45.08%	158.43%
PRIM	74 Outperform	$3.94B	19.54	15.30%	0.38%	12.45%	42.45%
MYRG	72 Outperform	$2.55B	76.02	5.71%	―	-7.33%	-57.86%
ECG	71 Outperform	$3.05B	20.28	32.91%	―	11.92%	8.94%
Sector *	66 Neutral	$4.48B	12.26	5.32%	248.53%	4.10%	-12.36%
TPC	62 Neutral	$2.03B	―	-12.28%	―	8.95%	-41.32%

* Industrials Sector Average

Performance Comparison

MYRG

MYR Group

165.57

17.82

12.06%

AGX

Argan

243.11

166.51

217.38%

PRIM

Primoris Services

75.92

23.08

43.68%

TPC

Tutor Perini

40.59

20.93

106.46%

NVEE

NV5 Holdings

22.22

-0.31

-1.38%

ECG

Everus Construction Group, Inc.

61.19

11.19

22.38%

MYR Group Corporate Events

Business Operations and StrategyFinancial Disclosures

MYR Group Releases Q2 2025 Investor Presentation

Positive

May 5, 2025

On May 5, 2025, MYR Group Inc. released presentation materials on its website for use in investor meetings throughout the quarter ending June 30, 2025. These materials provide summary information about the company’s operations and financials, emphasizing its strong market position and growth prospects in the electrical construction industry. The announcement highlights MYR Group’s continued growth and strategic positioning to capitalize on opportunities in data centers, transportation, and clean energy, supported by a robust balance sheet and significant backlog in both its Transmission & Distribution (T&D) and Commercial & Industrial (C&I) segments.

Business Operations and StrategyFinancial Disclosures

MYR Group Highlights Strong Growth and Strategic Outlook

Positive

Mar 10, 2025

On March 7, 2025, MYR Group Inc. released presentation materials for the investment community, highlighting its financial performance and strategic outlook. The company reported strong growth in both its T&D and C&I segments, driven by increased investments in data centers, transportation, and clean energy. MYR Group’s robust financial position, with significant credit availability, supports its growth initiatives and potential acquisitions. The company is well-positioned to benefit from trends like reshoring of manufacturing and rising electricity demand, maintaining its status as a market leader in electrical construction.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.