MYR GROUP INC. (MYRG): what the price requires
At today's price, MYR GROUP INC. (MYRG) is priced for today's economics sustained for ~8.8 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: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/MYRG
Headline
| Field | Value |
|---|---|
| Ticker | MYRG |
| Company | MYR GROUP INC. |
| Current price | $412.94/sh |
| Composition | Fixed price 57% / Unit price 22% / T&E (time-and-equipment, time-and-materials and cost-plus) 21% |
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 | 3.6% |
| Operating margin today | 5.0% |
| Margin compression implied | -1.4pp |
| Must persist for | 8.8y |
| Multiple paid | 34x operating income |
The operating-margin requirement is derived from the framework's value band at year 12, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 10.8% cost of capital; growth searched up to the 27.2% self-funding ceiling; each 1pp moves the implied horizon ~1.6 years.
Reconcile: at the x-ray's 9.3% required return this reads ~6.2 years; the models below use their own rates.
How unusual the bet is: elevated
| Reference | Value |
|---|---|
| vs own history | +0.30σ |
| cohort percentile (of 225 peers) | 75 |
| sustained it ~8.8 years at this level | 14% |
| implied end-window share | 0% |
Valuation X-Ray
Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).
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 | 4.22x | 5 | expensive |
| Earnings | 2.68x | 5 | expensive |
| Relative | 1.61x | 5 | expensive |
| Growth | 0.77x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.
Per-Model Detail (n=18)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $564.51 | 0.73x | yes | FCF base $0.3B, growth 13% (input: historical growth), terminal g 4.0%, WACC 9.2%, 6yr projection |
| DCF Exit Multiple | Growth | $536.01 | 0.77x | yes | Exit EV/EBITDA: 27.6x / 29.6x / 31.6x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $256.49 | 1.61x | yes | P/E 26.29x (blended: static sector reference 18x + trailing (TTM) 46x), scenarios: 21.6x / 26.3x / 30.9x (bear / base = reference held flat / bull), EV/EBITDA 17.29x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $97.87 | 4.22x | yes | BV/sh $44.83, ROE (TTM) 20.2%, ke 9.3% |
| Two-Stage Excess Return | Asset | $143.16 | 2.88x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $401.74 | 1.03x | yes | Rev $3.8B, growth 13% (input: historical growth; tapered), Terminal P/S: 1.4x / 1.7x / 2.0x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $108.84 | 3.79x | yes | EPS $9.07, growth 2% (input: historical EPS growth), PEG=24.38 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $71.19 | 5.80x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.12B × (1−27%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $138.10 | 2.99x | yes | BV $44.83 + 5yr PV of (ROE (TTM) 20.2% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $95.65 | 4.32x | yes | √(22.5 × EPS $9.07 × BVPS $44.83) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $170.94 | 2.42x | yes | EBITDA $0.22B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $165.33 | 2.50x | yes | FCF $230.6M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $154.37 | 2.68x | yes | SBC-adj FCF $0.21B (FCF $0.23B − SBC $0.02B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $292.66 | 1.41x | yes | EPS $9.07 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $38.31 | 10.78x | yes | BV $44.83 × (ROIC 7.8% / WACC 9.2%) |
| P/Sales Sector | Relative | $609.95 | 0.68x | yes | Revenue $3.82B × sector P/S 2.5x |
| PEG Fair Value | Relative | $340.13 | 1.21x | yes | EPS $9.07 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $98.05 | 4.21x | yes | EPS $9.07 / 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 cash | $152.0m |
| Net debt / NOPAT (after-tax) | -1.12x (net cash) |
| Net debt / operating income (pre-tax) | -0.82x (net cash) |
| Interest coverage | 34.2x |
| Share count CAGR (buyback) | -2.2% |
| Burning cash | no |
Bullet Takeaways
MYR Group is an electrical construction contractor with two segments, transmission and distribution and commercial and industrial, and the moat is operational rather than proprietary: scale, a bonded track record, and the ability to take on the largest grid and data-center jobs. Trailing operating margin is about 5.2%, and on a record quarter the gross margin improved as higher-contract-margin work flowed through.
At roughly $461 (June 27, 2026) the price pays about 38x company-wide operating income, which implies operating growth held at the self-funding ceiling for about 10 years. Only the growth-DCF reaches the price; the asset, earnings-power, and peer-multiple frames all land below it, so the quote is a durability bet on compounding the static methods cannot capture.
The balance sheet is a genuine strength: about $163 million of cash against roughly $11 million of gross debt, so net cash near $152 million, with interest coverage above 40x. The fragility in this business is not leverage, it is the fixed-price contract base and the working capital and bonding it ties up.
Bull Case
MYR Group's advantage is not a patent or a brand, it is the structural position of a contractor large enough to bond and execute the biggest electrical jobs in North America while most of the field cannot. The filing lays out the two-segment shape directly: the T&D segment delivers a broad range of services on electric transmission and distribution networks and substation facilities, while the C&I segment handles commercial and industrial electrical construction (FY2025 10-K, accession 0000700923-26-000007). That breadth lets the company chase the work that is actually growing, and the return data backs the position, with trailing return on invested capital near 27% against a cost of capital under 11%. A contractor earning that far above its capital cost has a real edge, not just a busy order book.
The demand backdrop is the strongest part of the case. The most recent quarter was a record, with revenue of roughly $1.0 billion and net income of $46.8 million, and backlog reached a record $2.84 billion, up about 8% year over year, split between $980.7 million in T&D and $1.86 billion in C&I. Management pointed to data-center and water-infrastructure work as the fastest-growing end markets, with data-center construction starts up nearly 100% year over year. Backlog of that size against a single quarter near $1 billion is more than two years of visible work, which is what turns a cyclical contractor into a compounder.
The balance sheet lets the company press that advantage without strain. It ended the quarter with $163.2 million in cash and about $460 million of availability on its revolver, generated $68.6 million of free cash flow, and carries net cash of roughly $152 million. The capacity to bond large projects is itself a moat input, because the filing shows the scale of surety required, with about $491.5 million of bonds outstanding in T&D and $1.85 billion in C&I as of year-end (FY2025 10-K, accession 0000700923-26-000007). A weaker contractor cannot post that backing; MYR can, and it converts directly into eligibility for the largest awards.
Bear Case
The capital structure looks bulletproof on the surface, net cash and 40x interest coverage, but the fragility in this business hides inside the contract mix rather than the debt line, and a fixed-price contractor's stress test is the job that goes wrong. About 57% of the work is fixed price, with another 22% unit price, so roughly four-fifths of revenue carries cost-overrun risk that lands on MYR, not the customer. The most recent quarter's margin gain was helped by favorable change orders and a favorable job closeout, the kind of items that reverse, and management itself noted offsetting project inefficiency costs. One large fixed-price job that runs over can swallow a quarter of segment profit, and the price assumes a decade of clean compounding.
The bonding that enables the big awards is also a concentrated liability. The filing shows roughly $491.5 million of bonds outstanding in T&D and about $1.85 billion in C&I against projects still to complete (FY2025 10-K, accession 0000700923-26-000007). Bonding capacity is finite and tied to balance-sheet strength and loss history, so a string of poor project outcomes does not just dent earnings, it can shrink the company's ability to bid the very work the growth case depends on. That is a feedback loop the net-cash position masks rather than removes.
The valuation leaves no margin for any of this to go wrong. At about 38x operating income, the price requires the self-funding-ceiling growth rate to persist for roughly 10 years, and history says only about 12% of comparable fast-growers sustained that pace for that long. The asset, earnings-power, and peer-multiple methods all sit below the price; the entire premium rests on the single growth-DCF frame. If data-center construction starts cool from their near-doubling pace, or if a few jobs close out poorly instead of favorably, the durability assumption the price is paying for weakens, and there is no cheaper method underneath to catch the fall.
Valuation
At the current price the market is paying about 38x company-wide operating income, which implies operating growth held at its self-funding ceiling for roughly 10 years. That solve runs at a cost of capital near 10.9%, with growth searched up to a 27.2% ceiling, and each additional point of growth moves the implied horizon by about 1.7 years. Keep those figures approximate; they are a single inversion under fixed fade assumptions, not measured forecasts.
The pattern across methods is the clearest signal. The asset-based methods, the earnings-power methods, and the peer-multiple methods all say the stock is richly valued, and only the forward growth-DCF reaches the price. When three of four families land below the quote and one stretches to meet it, the price is a bet on durable compounding that the static frames structurally cannot capture, a moat-and-durability premium. The reverse-DCF range on a whole-company basis centers well below the current price, with an acceptable reliability flag, so the gap between the methods and the quote is real, not an artifact of thin data.
The grounding on the bull side is rarity: the near-term growth pace is within what MYR has recently delivered, so the stretch is in how LONG it must persist, not in the rate. Historically only about 12% of comparable fast-growers sustained this level for nearly a decade. The balance sheet supports the attempt, net cash of roughly $152 million and interest coverage above 40x give the company room to keep bidding through a soft patch, but balance-sheet strength does not lower the bar the price has set on duration.
Catalysts
The most recent quarter, reported in late April 2026, was the key event and it was a record: revenue of about $1.0 billion, net income of $46.8 million (roughly double the prior year), diluted EPS of $2.99, and EBITDA of $81.5 million. Gross margin improved to 13.4% from 11.6% a year earlier, helped by higher-contract-margin work, better productivity, and favorable change orders and closeouts. Backlog hit a record $2.84 billion, up 7.7% year over year, split $980.7 million in T&D and $1.86 billion in C&I.
Forward, management raised full-year operating-margin guidance across both segments and forecast about 12% total revenue growth, and pointed to data-center and water and wastewater projects as the strongest demand drivers, with data-center construction starts up nearly 100% year over year. The company also flagged the Valley Electric transaction in its updates, an acquisition-led extension of capacity. The next quarterly print is the main catalyst: it tests whether backlog keeps building and whether the higher margin holds rather than reverting toward the trailing 5% operating level.
The watch items are project execution and end-market cyclicality. Favorable closeouts can become unfavorable ones, and the data-center surge that is lifting backlog could slow. A continued rise in backlog with stable or improving margins would support the durability the price assumes; a margin give-back or a backlog stall would expose the fixed-price contract risk directly. Sources: MYR Group Q1 2026 results and earnings coverage (stocktitan.net; fool.com; simplywall.st), April 2026.
Peer Cohorts (Per Segment, With Filing Citations)
Transmission & Distribution (T&D) (reported)
- PWR (Quanta Services, Inc.)
- (no filing in the citation store)
- MTZ (MasTec, Inc.)
- (no filing in the citation store)
- PRIM (Primoris Services Corporation)
- (no filing in the citation store)
- IESC (IES Holdings, Inc.)
- (no filing in the citation store)
- STRL (Sterling Infrastructure, Inc.)
- (no filing in the citation store)
Commercial & Industrial (C&I) (reported)
- IESC (IES Holdings, Inc.)
- (no filing in the citation store)
- EME (EMCOR Group, Inc.)
- (no filing in the citation store)
- MTZ (MasTec, Inc.)
- (no filing in the citation store)
- PRIM (Primoris Services Corporation)
- (no filing in the citation store)
- STRL (Sterling Infrastructure, Inc.)
- (no filing in the citation store)
- FIX (COMFORT SYSTEMS USA, INC.)
- (no filing in the citation store)
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.