Everus Construction Group, Inc. (ECG): what the price assumes

In the published model solve dated 2026-Q2, anchored at $117.24, Everus Construction Group, Inc. (ECG) is priced for today's economics sustained for ~6.9 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/ECG

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 12.8% cost of capital; growth searched up to the 27.7% self-funding ceiling.

How unusual the bet is: n/a

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.8%); the inversion above states its own rate.

Per-Model Detail (n=15)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Everus builds and services electrical and mechanical systems, with commercial work at 55% of revenue and utility at 20%, and the mix has been reshaped in two years by data centre and other advanced-technology contracts.
• Backlog reached 3.68 billion dollars at March 31, 2026, up 20.4% on the year, and management raised full-year 2026 revenue guidance to a range of 4.3 to 4.4 billion dollars.
• The concentration behind that growth is the thing to watch: the top ten customers supplied about 43% of 2025 revenue against about 33% the year before, with one customer alone at roughly 17%.

Bull Case

The price is making a long-dated claim. At $130.03 the market pays roughly 26 times company-wide operating income, and run backwards that multiple needs the company to hold growth at its self-funding ceiling for something like eleven years. Eleven years is an unusual thing to ask of a construction contractor, an industry that invented the word backlog precisely because visibility runs out. So the fair question is whether the underlying business is behaving anything like that, and at the moment it is running faster.

The March quarter was a record on every line the company tracks. Revenue reached 1.04 billion dollars, up 25.4% from 826.6 million, with electrical and mechanical revenue up 28.8% and transmission and distribution up 10.5%. More interesting than the revenue is the shape of the profit underneath it: gross profit rose 41.3% to 130.7 million, and diluted earnings per share rose 58.3% to $1.14. Profit growing at roughly twice the pace of revenue is not what happens when a contractor simply takes on more work. It is what happens when the work changes.

The 10-K says what changed, in the company's own careful language: "Data center capacity and load growth, as well as other advanced technology growth, creates tremendous opportunities, but also presents risks and challenges for us and our customers." Data centre electrical work is technically demanding, schedule-critical and difficult to staff, which is exactly the combination that lets a contractor price for the risk rather than bid against six competitors on a spreadsheet. That is where the margin expansion is coming from.

Forward visibility supports the trajectory rather than merely hoping for it. Backlog stood at 3.68 billion dollars at March 31, 2026, up 14.0% in a single quarter and 20.4% on the year, against total backlog of 3,228.3 million at the end of 2025 and 2,780.6 million a year before that. The 10-K estimated that 2,587.5 million of the year-end figure would convert to revenue within twelve months. A contractor whose forward book is growing faster than its revenue is one that has more work available than it can currently execute, which is the good version of a capacity problem.

Where the bull case gets its runway is in the cohort. Everus earns a trailing operating margin of 7.3%. FIX, running the same electrical and mechanical playbook, earns 15.7% on 10.135 billion of revenue while growing 38.4%. STRL earns 16.9% on 2.885 billion. IESC earns 11.7% on 3.633 billion, and EME earns 10.1% on 17.747 billion. Everus sits below all four and above the pure infrastructure names, with PWR at 5.7% on 30.121 billion and MYRG at 5.2% on 3.825 billion. The point is not that Everus deserves the top of that range. It is that the top of that range exists, is occupied by companies doing recognisably similar work, and therefore the margin the price is asking for has been earned by somebody rather than imagined.

Capital structure gives management room to keep going. After completing its first acquisition as an independent company on April 2, 2026, buying the North Carolina mechanical contractor SE&M, pro forma net leverage stood at roughly half a year's earnings before interest, taxes, depreciation and amortisation, and operating profit covers the interest bill about 13.3 times. The share count has been essentially flat since the separation, drifting up about 0.2% a year, so none of the growth so far has been paid for by diluting the owners.

Bear Case

Everus has only been an independent company since late 2024, and the way it is deploying capital deserves more attention than the backlog headline it is being bought for. The separation from MDU Resources did not arrive debt-free. As the 10-K puts it, "In connection with the Separation, we entered into a five-year senior secured credit agreement, which provides for long-term debt in an aggregate principal amount of up to $525 million." That facility, a term loan plus a revolver, is the war chest, and management has been explicit about the plan for it. On completing the SE&M acquisition the chief executive described it as a first step rather than a one-off. A company trading at roughly 26 times its operating income, buying private contractors that trade at nothing like that, is arbitraging its own multiple. That works beautifully until the multiple stops cooperating, at which point the acquired earnings remain and the currency that bought them does not.

There is a governance detail in the same window. On January 14, 2026, in its first full year as a standalone registrant, the Audit Committee approved dismissing Deloitte & Touche as independent auditor, with the dismissal taking effect on February 25, 2026 once the 2025 audit was complete. The filings record no disagreement, and changing auditors is a legitimate decision. It is still a decision an investor should notice when it happens in year one of a company's separate financial reporting history, alongside an acquisition programme and a set of percentage-of-completion estimates that determine how much revenue gets recognised each quarter.

The deeper problem is who the growth is coming from. In 2025 Everus served roughly 4,000 customers across more than 44,000 projects, and the top ten of them supplied about 43% of total operating revenues of 3.75 billion dollars, with a single customer at roughly 17%. A year earlier those top ten supplied about 33% of 2.85 billion. Revenue grew by nearly a third, and the concentration behind it grew too. At segment level the picture is sharper: two electrical and mechanical customers accounted for approximately 21.1% and 10.4% of that segment's revenues in 2025, and one transmission and distribution customer for approximately 16.0% of its segment. A contractor whose expansion depends on a handful of hyperscale buyers has borrowed those buyers' capital-spending cycle, and that cycle is set in somebody else's boardroom.

Which brings the argument to what the price actually requires. Today's quote needs the current economics held at the self-funding ceiling for around eleven years. Of comparable fast growers, roughly 14% managed that over a ten-year stretch. The company's own filing declines to underwrite even the near term: "Backlog at any given point in time may not accurately represent the revenue or net income that is realized in any period", and more bluntly, "Backlog should not be relied upon as a standalone indicator of future results." The market is extrapolating a decade from a book the company will not extrapolate a year from.

The valuation methods reflect the stretch. The peer-multiple and forward cash-flow approaches reach today's price; the earnings-power approaches, which capitalize what the business currently earns without crediting growth, land at less than a third of it. The zero-growth free-cash-flow calculation works from 229.6 million dollars of free cash flow, and the normalized earnings-power calculation averages operating profit over three years to about 0.19 billion, a window that includes the period before the advanced-technology work arrived. Everything therefore turns on whether the last eighteen months are the new base or the peak of a build cycle.

Finally, note what the market is charging for the risk. The discount rate that falls out of this share's own volatility is about 12.7%, against high single digits for a steadier industrial. The equity market is not treating Everus as a stable compounder. It is treating it as a leveraged bet on a construction cycle, and pricing it at a multiple that only makes sense if it is the former.

Valuation

Start with what the price is committing to, because it is a duration claim rather than a growth-rate claim. At $130.03 the market values the business at roughly 26 times its company-wide operating income, and inverting that produces not a growth number but a length of time: today's economics would need to hold at the ceiling the company can fund from its own cash flow for something like 11.2 years. About 14% of comparable fast growers sustained that over a decade. Duration, not pace, is the demanding part.

The calculation carries an unusually high discount rate, and that is informative rather than technical. The rate applied here is about 12.7%, well above what a steady industrial would attract, because the shares themselves move far more than the market does. A single percentage point of cost of capital moves the assumed span by close to a fifth of its whole length, so the answer is sensitive to how the market's appetite for volatility changes rather than only to how the company performs.

Where the methods disagree is instructive. Peer-multiple approaches and forward cash-flow approaches both reach today's price. Earnings-power approaches land far beneath it, with the price sitting more than three times their central estimate. The mechanics explain the gap without any need for a view. The zero-growth free-cash-flow calculation takes 229.6 million dollars of reported free cash flow and capitalizes it at the cost of equity, crediting nothing to the future. The normalized earnings-power calculation averages operating profit across three years, about 0.19 billion, which necessarily includes the period before data-centre work reshaped the revenue mix. Both are backward-looking by construction. The disagreement between them and the price is a disagreement about whether the trailing window is representative.

Against its cohort, the multiple sits in the upper half of the peer range while the operating margin does not. Everus earns 7.3% on 3.96 billion of trailing revenue. FIX earns 15.7% on 10.135 billion, STRL 16.9% on 2.885 billion, and EME 10.1% on 17.747 billion, while PWR earns 5.7% on 30.121 billion and PRIM 4.9% on 7.486 billion. A reader can hold two facts at once here: Everus is paying a premium multiple on a mid-cohort margin, and the cohort demonstrates that the margin it needs is attainable in this line of work. Which of those matters more is precisely the open question, and the report does not pretend to settle it.

The balance sheet is the least contested part of the picture. Net debt runs about 1.0 times operating profit, operating income covers interest roughly 13.3 times, the company is not consuming cash, and the share count has been close to flat since separation. After the SE&M purchase closed on April 2, 2026, management put pro forma net leverage at roughly half a year of earnings before interest, taxes, depreciation and amortisation. That is a structure with room to buy more, which is both the growth mechanism the price is counting on and the reason the acquisition discipline is worth watching closely.

Catalysts

Everus reported record first-quarter results on May 5, 2026 and lifted its outlook on the back of them. Revenue of 1.04 billion dollars was up 25.4%, diluted earnings per share of $1.14 were up 58.3%, and backlog reached 3.68 billion dollars, up 20.4% year over year. Management raised full-year 2026 revenue guidance to a range of 4.3 to 4.4 billion dollars and earnings before interest, taxes, depreciation and amortisation guidance to a range of 345 to 360 million dollars. Second-quarter results are scheduled for release after the close on August 4, 2026, and the number that matters in them is not revenue, which the backlog already implies, but whether the gross margin gain of the March quarter repeats.

The acquisition programme opened on April 2, 2026 with the purchase of SE&M Constructors, SE&M of the Triangle and SECO Rentals, a group founded in 1923 and headquartered in Elm City, North Carolina, that draws roughly 65% of its revenue from mechanical services and works in pharmaceutical, complex industrial and health care end markets. The stated logic is diversification: it moves Everus into the Southeast and away from a revenue mix that has become heavily weighted to a small number of advanced-technology customers. Management framed the transaction as the first of several rather than an isolated deal, so acquisition pace and pricing become recurring items to track rather than a one-time event.

Two governance items sit in the same period. On January 14, 2026 the Audit Committee approved dismissing Deloitte & Touche as independent auditor, effective February 25, 2026 upon completion of the 2025 audit. Shareholders then elected the full slate of eight directors at the annual meeting on May 12, 2026. Separately, Oppenheimer assumed coverage with an Outperform rating and a $185 price target in May 2026, which sits well above the current quote and rests, as the firm's own framing indicates, on the backlog converting at the margins the March quarter demonstrated.

Peer Cohorts (Per Segment, With Filing Citations)

E&M (Electrical & Mechanical) (reported)

• EME (EMCOR Group, Inc.)
• FY2025 10-K: #8226; increased competition; • the impact of legal proceedings, claims, lawsuits, or governmental investigations; • unfavorable developments in the mix of our business; and • other factors discussed elsewhere in this report. Such risks and uncertainties could cause actual results to differ materially from those that…
• FY2025 10-K: …Connecticut 06851-1092, and our telephone number at those offices is (203) 849-7800. 1 Table of Contents Operations Electrical and mechanical construction and facilities services operations: Our electrical and mechanical construction services primarily involve the design, integration, installation, start-up,…
• FIX (COMFORT SYSTEMS USA, INC.)
• FY2025 10-K: …was established in 1997. We provide mechanical and electrical contracting services. Our mechanical segment principally includes heating, ventilation and air conditioning ("HVAC"), plumbing, piping and controls, as well as off-site construction, monitoring and fire protection. Our electrical segment includes…
• FY2025 10-K: …our 2025 revenue. Construction, Installation, Expansion and Renovation Services -Construction, installation, expansion and renovation services consist of "design and build" and "plan and spec" projects. In "design and build" projects, the commercial MEP company is responsible for designing, engineering and installing…
• IESC (IES Holdings, Inc.)
• FY2025 10-K: …or both. A significant portion of our larger projects is awarded from long-term, repeat customers. From time to time, we are contracted on projects with completion times extending beyond one year or over several years, which are generally more complex and difficult to estimate. Competition The electrical and…
• FY2025 10-K: …constant presence. We also provide mechanical services such as maintenance agreements, installation, or replacement of mechanical equipment for commercial and industrial facilities. This segment provides services for a variety of project types, including data centers, manufacturing facilities, office buildings, wind…
• PWR (Quanta Services, Inc.)
• FY2025 10-K: …and repair services related to commercial and industrial wiring; and • aviation services primarily for the utility industry, including transportation of line workers, pole and tower setting, and wire stringing, as well as certain emergency aerial firefighting services. This segment also includes (i) the majority of…
• FY2025 10-K: …and networks (primarily included in the Electric segment); a business that provides services related to fiber optic networks (primarily included in the Electric segment); and a business that specializes in designing, manufacturing, and distributing liquid-filled power transformers primarily for electrical companies…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …derive their revenue primarily from the engineering, installation and maintenance of infrastructure, primarily in North America. The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications and digital infrastructure, primarily for wireless…
• FY2025 10-K: …wireless and wireline/fiber networks, data center buildout and interconnection, wireless integration and optimization and install-to-the-home services, as well as select utility infrastructure, among others. Our Clean Energy and Infrastructure segment primarily serves energy, utility, government and other end-markets…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
• FY2025 10-K: …processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …such as pipe, solar panels, turbines, boilers and vessels, are typically supplied by the customer. ​ Substantially all of our gas and electric distribution and communication services are provided pursuant to renewable MSAs on a "unit-price" basis. Fees on unit-price contracts are negotiated and earned based on units…
• FY2025 10-K: …the methods used by the segment to provide the services, and the regulatory environment of each segment's customers. ​ The classification of certain operating expenses and SG&A expenses for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …Solutions, Transportation Solutions and Building Solutions. The segment information for the prior periods presented has been recast to conform to the current presentation. The Company's CODM, which is the Company's Chief Executive Officer, uses both segment gross profit and operating income for each segment…
• FY2025 10-K: …- Program Description (incorporated by reference to Exhibit 10.3 to Sterling Construction Company, Inc.'s Quarterly Report on Form 10-Q filed on August 3, 2021 (SEC File No. 1-31993)). 10.10 (1) Form of SEICP Long-Term Incentive Award Agreement (incorporated by reference to Exhibit 10.4 to Sterling Construction…

T&D (Transmission & Distribution) (reported)

• PWR (Quanta Services, Inc.)
• FY2025 10-K: …and networks (primarily included in the Electric segment); a business that provides services related to fiber optic networks (primarily included in the Electric segment); and a business that specializes in designing, manufacturing, and distributing liquid-filled power transformers primarily for electrical companies…
• FY2025 10-K: …and energy delivery companies, as well as governmental entities. We have estimated revenues by customer type as a percentage of total revenues below. Such estimates 8 are based on management judgment and assumptions and are provided to show perceived trends in our customer types and should be considered directional…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …and distribution system expansion, reliability, resiliency, grid hardening and modernization resulting from rising electricity demand, growth in renewable generation, and aging grid infrastructure. • Our Pipeline Infrastructure segment is expected to benefit from continued investment in natural gas distribution and…
• FY2025 10-K: …infrastructure, and we expect to benefit from market trends in these industries. Opportunities in our Power Delivery Segment The U.S. electrical transmission and distribution infrastructure, referred to as "the grid," is composed of a network of electric generating facilities, high voltage transmission lines,…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
• FY2025 10-K: …for the year ended December 31, 2024. The increase was primarily for the reasons stated above. Segment Results The following table sets forth, for the periods indicated, statements of operations data by segment, segment net sales as a percentage of total net sales and segment operating income as a percentage of…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …the methods used by the segment to provide the services, and the regulatory environment of each segment's customers. ​ The classification of certain operating expenses and SG&A expenses for segment reporting purposes can at times require judgment on the part of management. Our segments may perform services across…
• FY2025 10-K: …such as pipe, solar panels, turbines, boilers and vessels, are typically supplied by the customer. ​ Substantially all of our gas and electric distribution and communication services are provided pursuant to renewable MSAs on a "unit-price" basis. Fees on unit-price contracts are negotiated and earned based on units…
• IESC (IES Holdings, Inc.)
• FY2025 10-K: …and end markets, including data centers for co-location and managed hosting customers; corporate, educational, financial, hospitality and healthcare buildings; e-commerce distribution centers; and high-tech manufacturing facilities. We also provide the design and installation of audio/visual, telephone, fire,…
• FY2025 10-K: …constant presence. We also provide mechanical services such as maintenance agreements, installation, or replacement of mechanical equipment for commercial and industrial facilities. This segment provides services for a variety of project types, including data centers, manufacturing facilities, office buildings, wind…
• EME (EMCOR Group, Inc.)
• FY2025 10-K: …customers through approximately 100 operating subsidiaries, which specialize principally in providing construction services relating to electrical and mechanical systems in all types of facilities and in providing various services relating to the operation, maintenance, and management of those facilities. Such…
• FY2025 10-K: …growth within the majority of the sectors we serve, with the most significant increases within: (a) network and communications, predominantly as a result of several data center construction contracts, (b) institutional, largely as we continue to see demand for our services from education customers, including a number…
• DY (DYCOM INDUSTRIES, INC.)
• FY2025 10-K: …respectively. 71 Table of Contents 20. Customer Concentration and Revenue Information Geographic Location We provide services throughout the United States. Significant Customers Our customer base is highly concentrated, with our top five customers accounting for approximately 55.4 %, 57.7 %, and 66.7 %, of our total…
• FY2025 10-K: …are increasingly deploying fiber optic cable technology deeper into their networks and closer to consumers and businesses in order to respond to consumer demand, competitive realities, and public policy support. Additionally, wireless carriers are upgrading their networks and contemplating next generation mobile…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.