Q4 Rundown: Concrete Pumping (NASDAQ:BBCP) Vs Other Construction and Maintenance Services Stocks
As the Q4 earnings season comes to a close, it’s time to take stock of this quarter’s best and worst performers in the construction and maintenance services industry, including Concrete Pumping (NASDAQ:BBCP) and its peers.
Construction and maintenance services companies not only boast technical know-how in specialized areas but also may hold special licenses and permits. Those who work in more regulated areas can enjoy more predictable revenue streams - for example, fire escapes need to be inspected every five years–. More recently, services to address energy efficiency and labor availability are also creating incremental demand. But like the broader industrials sector, construction and maintenance services companies are at the whim of economic cycles as external factors like interest rates can greatly impact the new construction that drives incremental demand for these companies’ offerings.
The 13 construction and maintenance services stocks we track reported a mixed Q4. As a group, revenues missed analysts’ consensus estimates by 0.9% while next quarter’s revenue guidance was in line.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 10.1% since the latest earnings results.
Weakest Q4: Concrete Pumping (NASDAQ:BBCP)
Going public via SPAC in 2018, Concrete Pumping (NASDAQ:BBCP) is a provider of concrete pumping and waste management services in the United States and the United Kingdom.
Concrete Pumping reported revenues of $86.45 million, down 11.5% year on year. This print fell short of analysts’ expectations by 4.8%. Overall, it was a disappointing quarter for the company with a significant miss of analysts’ adjusted operating income estimates.
"Despite the challenges presented by a persistent elevated interest rate environment, which continued to affect our commercial construction volume in the first quarter and delayed project starts in both the U.S. and U.K., coupled with severe weather events in our central, mountain and southeastern regions, we remained resilient. Our flexible cost structure and disciplined fleet management strategy allowed us to maintain strong Adjusted EBITDA margins despite the reduced volume” said Bruce Young, CEO of CPH.
Concrete Pumping Total Revenue
The stock is up 7.3% since reporting and currently trades at $6.49.
Founded in 2001, Construction Partners (NASDAQ:ROAD) is a civil infrastructure company that builds and maintains roads, highways, and other infrastructure projects.
Construction Partners reported revenues of $561.6 million, up 41.6% year on year, outperforming analysts’ expectations by 9.7%. The business had an incredible quarter with a solid beat of analysts’ EPS estimates and an impressive beat of analysts’ EBITDA estimates.
Construction Partners Total Revenue
Construction Partners scored the biggest analyst estimates beat, fastest revenue growth, and highest full-year guidance raise among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 6.7% since reporting. It currently trades at $79.08.
Established in 1994, Orion (NYSE:ORN) provides construction services for marine infrastructure and industrial projects.
Orion reported revenues of $216.9 million, up 7.6% year on year, falling short of analysts’ expectations by 20.2%. It was a softer quarter as it posted full-year EBITDA guidance missing analysts’ expectations and a significant miss of analysts’ EPS estimates.
Orion delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 18.7% since the results and currently trades at $5.26.
Formed through the merger of 12 companies, Comfort Systems (NYSE:FIX) provides mechanical and electrical contracting services.
Comfort Systems reported revenues of $1.87 billion, up 37.6% year on year. This number beat analysts’ expectations by 5.5%. It was an exceptional quarter as it also recorded an impressive beat of analysts’ EBITDA estimates.
The stock is down 7.7% since reporting and currently trades at $352.75.
Started in 1926 as an insulation contractor, APi (NYSE:APG) provides life safety solutions and specialty services for buildings and infrastructure.
APi reported revenues of $1.86 billion, up 5.8% year on year. This print surpassed analysts’ expectations by 1.2%. Aside from that, it was a mixed quarter as it also recorded a narrow beat of analysts’ organic revenue estimates but EBITDA guidance for next quarter missing analysts’ expectations significantly.
The stock is down 10.9% since reporting and currently trades at $35.77.
In response to the Fed’s rate hikes in 2022 and 2023, inflation has been gradually trending down from its post-pandemic peak, trending closer to the Fed’s 2% target. Despite higher borrowing costs, the economy has avoided flashing recessionary signals. This is the much-desired soft landing that many investors hoped for. The recent rate cuts (0.5% in September and 0.25% in November 2024) have bolstered the stock market, making 2024 a strong year for equities. Donald Trump’s presidential win in November sparked additional market gains, sending indices to record highs in the days following his victory. However, debates continue over possible tariffs and corporate tax adjustments, raising questions about economic stability in 2025.
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