Everus Construction Group, Inc. (ECG): what the price requires
At today's price, Everus Construction Group, Inc. (ECG) is priced for today's economics sustained for ~11.8 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/ECG
Headline
| Field | Value |
|---|---|
| Ticker | ECG |
| Company | Everus Construction Group, Inc. |
| Current price | $133.12/sh |
| Composition | E&M (Electrical & Mechanical) 77% / T&D (Transmission & Distribution) 23% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 5.5% |
| Operating margin today | 7.3% |
| Margin compression implied | -1.8pp |
| Must persist for | 11.8y |
| Multiple paid | 26x operating income |
The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 12.9% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.1 years.
Reconcile: at the x-ray's 9.3% required return this reads ~5 years; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| cohort percentile (of 212 peers) | 73 |
| sustained it ~10 years at this level | 14% |
| implied end-window share | 0% |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.82x | 5 | expensive |
| Earnings | 3.24x | 5 | expensive |
| Relative | 0.87x | 5 | justifies |
| Growth | 0.69x | 3 | justifies |
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=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $245.33 | 0.54x | yes | FCF base $0.3B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.8%, 7yr projection |
| DCF Exit Multiple | Growth | $180.53 | 0.74x | yes | Exit EV/EBITDA: 22.0x / 24.0x / 26.0x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $98.94 | 1.35x | yes | P/E 21.75x (blended: static sector reference 18x + trailing (TTM) 31x), scenarios: 17.4x / 21.8x / 26.1x (bear / base = reference held flat / bull), EV/EBITDA 15.6x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $47.18 | 2.82x | yes | BV/sh $13.42, ROE (TTM) 32.5%, ke 9.3% |
| Two-Stage Excess Return | Asset | $92.82 | 1.43x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $192.29 | 0.69x | yes | Rev $4.0B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.7x / 2.1x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $152.95 | 0.87x | yes | EPS $4.37, growth 35% (input: historical EPS growth), PEG=0.87 (Undervalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $26.61 | 5.00x | yes | Normalized EBIT (3y avg op income, one-time charges added back) $0.19B × (1−21%) / WACC 8.8% → EPV (no growth) |
| Residual Income | Asset | $72.80 | 1.83x | yes | BV $13.42 + 5yr PV of (ROE (TTM) 32.5% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $36.32 | 3.67x | yes | √(22.5 × EPS $4.37 × BVPS $13.42) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $62.84 | 2.12x | yes | EBITDA $0.30B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $41.12 | 3.24x | yes | FCF $229.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $39.73 | 3.35x | yes | SBC-adj FCF $0.22B (FCF $0.23B − SBC $0.01B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $141.01 | 0.94x | yes | EPS $4.37 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $8.78 | 15.16x | yes | BV $13.42 × (ROIC 5.8% / WACC 8.8%) |
| P/Sales Sector | Relative | $193.24 | 0.69x | yes | Revenue $3.96B × sector P/S 2.5x |
| PEG Fair Value | Relative | $163.88 | 0.81x | yes | EPS $4.37 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $47.24 | 2.82x | yes | EPS $4.37 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $277.5m |
| Net debt / NOPAT (after-tax) | 1.28x |
| Net debt / operating income (pre-tax) | 1.01x |
| Interest coverage | 13.3x |
| Share count CAGR (dilution) | 0.2% |
| Burning cash | no |
Bullet Takeaways
Everus carries a backlog of $3.68 billion (up 20.4% year over year), expanded operating margin to 15.3% in 2025, and raised 2026 guidance to revenue of $4.3 billion to $4.4 billion and EBITDA of $345 million to $360 million, riding data-center, grid-modernization, and reshoring demand.
At $157.65 the market pays about 31x company-wide operating income, which implies roughly self-funding-ceiling growth held for about 14 years; the asset and earnings-power models land far below, from about $9 (ROIC-justified book) to $47 (excess return), so the price rests entirely on the growth story.
The structural caution is capital quality and history: return on invested capital is only about 5.8% (below the roughly 8.9% cost of capital) while the 32.5% ROE is flattered by a thin $13.42 book value and acquisition leverage, the top 10 customers are about 33% of revenue, and the company has been standalone only since the October 2024 MDU spinoff.
Bull Case
Everus has a structural advantage that does not show up in a single ratio: it sells visibility. The company carries a backlog of $3.68 billion as of March 31, 2026, up 14% from year-end and 20.4% from a year earlier, with $3.29 billion of that in the Electrical and Mechanical segment alone. A construction firm with a backlog roughly the size of a full year's revenue has a forward order book that most cyclical contractors envy, and the filing notes Everus has not experienced material delays or cancellations in the periods presented in its backlog table (FY2025 10-K, accession 0002015845-26-000010). That order visibility is the moat: it lets management plan labor, win the next job off a track record, and convert demand into margin rather than chasing low-bid work.
The returns confirm the position is real, not just busy. Trailing return on equity runs near 32.5%, and the company expanded its operating margin to 15.3% in 2025 from 14.6% in 2024, which the 10-K attributes partly to the mix and execution gains (FY2025 10-K, accession 0002015845-26-000010). A contractor lifting margin while growing revenue is demonstrating pricing power and project selection, not just riding a hot market. Interest coverage above 14x and net debt under 1x operating income mean the balance sheet supports the growth without strain, and the share count has barely moved, so per-share value tracks the business.
The demand backdrop is the kind that can sustain the order book for years. Everus sits squarely in the path of data-center construction, grid modernization, and high-tech reshoring, the megatrends pulling electrical and mechanical work. Management responded to a strong first quarter by raising 2026 guidance to revenue of $4.3 billion to $4.4 billion and EBITDA of $345 million to $360 million, up from the initial $4.1 billion to $4.2 billion and $320 million to $335 million, and bolting on the $158 million SE&M acquisition to extend the Southeast footprint. When a young public company raises its own targets one quarter into the year, it is telling you the pipeline is filling faster than it modeled.
Bear Case
The fragility in Everus is on the balance sheet's composition, not its size. The headline return on equity near 32.5% looks elite until you notice the return on invested capital is only about 5.8%, well below the roughly 8.9% cost of capital. That gap is the tell: the high ROE is being manufactured by a thin equity base (book value per share of just $13.42 against a $157.65 (June 27, 2026) stock) and the leverage and goodwill that came with acquisitions, not by capital efficiency. A business earning below its cost of capital on its full invested base is destroying value on the marginal dollar even as the equity-only ratio flatters it. The ROIC-justified book model marks the stock near $9, a brutal reminder of how little hard capital underpins the price.
The earnings-power frames say the price is a long way ahead of the proven business. The earnings power value model, which asks what the company is worth on normalized current earnings with no growth, lands near $26, and the free-cash-flow capitalization marks around $41. Against a $157.65 quote those are not close. Inverting the price makes the demand explicit: the market is paying about 31x company-wide operating income, which requires roughly self-funding-ceiling growth sustained for about 14 years. Only about 14% of comparable fast-growers have ever sustained that kind of run, and the operating margin, while improved to 15.3%, leaves a current margin near 7.4% at the operating-income level that the price needs to hold or expand.
The business model itself carries concentration and cyclicality risk that the spinoff history makes harder to read. The 10-K discloses that the top 10 customers accounted for roughly 33% of operating revenues, and that construction services are marketed under highly competitive conditions subject to price and quality pressure (FY2025 10-K, accession 0002015845-26-000010). Everus has only been an independent public company since the October 2024 spinoff from MDU Resources, so its standalone track record through a downturn is short. Data-center and reshoring demand is real today, but it is also a capital-spending cycle that can pause; a contractor priced for 14 years of ceiling growth has no cushion if the order book stops compounding.
Valuation
The model spread on Everus is unusually wide, and where the families land tells the story. The growth-DCF frames reach well above the price: perpetual-growth DCF marks about $242 and the discounted-future-market-cap model near $228, both leaning on roughly 25% to 30% historical growth carried forward. But the asset and earnings-power frames are far below: earnings power value near $26, free-cash-flow yield near $41, simple excess return near $47, and the ROIC-justified book model near $9. The price is justified only by the growth and relative families; the value families say expensive.
Inverting the price is the cleanest way to see the bet. At $157.65 the market pays about 31x company-wide operating income, which the engine reads as requiring operating growth held near its self-funding ceiling for roughly 14 years, solved at a 13.1% cost of capital. That is an aggressive duration assumption. Only about 14% of comparable fast-growers have sustained that kind of pace over a decade, so the priced-in expectation sits above what the fundamentals comfortably support, and the engine labels it elevated.
That band sits well below the current price, which is the honest summary: a buyer at $157 is underwriting the backlog converting into many years of ceiling-rate compounding off a thin capital base. The backlog of $3.68 billion and the raised 2026 guidance support the near-term trajectory, but the valuation requires that strength to persist far longer than the typical construction cycle allows.
Catalysts
The most recent print was the first-quarter 2026 report, and it was strong enough to move guidance. Revenue rose 25.4%, with E&M revenue up 29% and T&D up 10.5%, and backlog climbed to $3.68 billion (E&M $3.29 billion, T&D $388.9 million). Management raised full-year 2026 revenue guidance to $4.3 billion to $4.4 billion from $4.1 billion to $4.2 billion, and EBITDA guidance to $345 million to $360 million from $320 million to $335 million, citing the strong quarter and the SE&M acquisition. The stock had already risen ahead of the print after analysts lifted estimates.
The $158 million SE&M acquisition is a concrete catalyst that expands the Southeast footprint in mechanical, electrical, and plumbing services. Integration progress and whether the deal accretes to margin as guided are watch items over the next two quarters.
The forward thesis tracks demand and execution. The leverage points are data-center construction, grid modernization, and high-tech reshoring, which feed the E&M segment that now drives the business. Watch the backlog trend at each quarterly print (whether it keeps compounding above 20% year over year or plateaus), the operating-margin trajectory after the 15.3% mark in 2025, and any sign that the data-center capital-spending cycle is pausing. As a contractor that has been independent only since the October 2024 spinoff from MDU Resources, the first full-cycle test of standalone execution is still ahead.
Sources: Everus Q1 2026 results and 8-K (stocktitan.net, Globe and Mail transcript); Everus Q4 and full-year 2025 results and 2026 guidance (investors.everus.com); MDU spinoff completion (businesswire.com, prnewswire.com); Simply Wall St and Barchart coverage.
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.
- 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.