Emcor Group is Wednesday's pick for IBD 50 Growth Stocks To Watch as the data center service provider is in a flat base. Emcor stock is about to hit a milestone on Sept. 22.
The Fortune 500 company was recently highlighted on the IBD Big Cap 20. It is also on the IBD Leaderboard watchlist.
The IBD 50 stock will join the S&P 500 on Sept. 22, as part of S&P Global's quarterly rebalancing.
Emcor's business consists of construction, building and industrial services. It specializes in mechanical, electrical, plumbing, air-quality, and fire-prevention systems.
Its companies plan, design, install, maintain, and retrofit data center infrastructure and power generation systems. Emcor also sells electrical infrastructure, including underground cable protection, backup power systems and fiber optics to data centers.
It ranks No. 1 out of 13 stocks in the building maintenance and services industry group, which holds the 11th spot out of the 197 industry groups that Investor's Business Daily tracks.
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Emcor Stock Readies For Next Move
Emcor has been trading tightly in a second-stage flat base with a 667.64 buy point, according to MarketSurge pattern recognition. The entry is also its all-time high reached on July 31, the day it released its second-quarter results.
It has been trading around its 21-day exponential moving average and finding support at its 10-week moving average.
Its relative strength line has dipped and is flattening out from its late July peak.
Emcor stock's IBD Accumulation/Distribution Rating of B+ indicates fairly heavy institutional buying over the last 13 weeks.
Data Center Vendor's Profit Grows But Slows
Emcor topped second-quarter earnings and sales estimates on July 31. It reported profit of $6.72 per share, or 28% growth, with sales of $4.30 billion.
"We had an outstanding second quarter, maintaining our momentum with quarterly revenue growth of 17.4% and an exceptional 9.6% operating margin," Emcor Chief Executive Tony Guzzi said in the earnings release.
Emcor raised its full-year 2025 earnings per share guidance to a range of $24.50 to $25.75, exceeding estimates. It also hiked its 2025 revenue outlook to $16.4 billion to $16.9 billion, with the midpoint topping views.
Analysts' forecasts call for a 12% boost in third-quarter profit.
Its second-quarter sales growth accelerated to 17% from 10% and 13% in the prior two quarters. But analysts expected the growth rate to slide from 15% in the third quarter to 6% over the three following quarters.
Wall Street projections see Emcor's full-year 2025 earnings rising 17% to $25.23 per share, with another increase of 9% in 2026. This lags 2023 and 2024, when the company saw robust growth of 65% and 61%, respectively.
Emcor holds near top-level IBD Composite and Earnings Per Share Ratings at 98 each.
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