MasTec Inc (MTZ, Financial), a prominent player in the North American infrastructure construction sector, has recently seen a significant uptick in its stock price. Over the past week, the stock has gained 5.59%, and over the last three months, it has surged by an impressive 28.69%. Currently, the stock is trading at $104.67, with a market capitalization of $8.32 billion. According to GuruFocus's valuation, the GF Value of MasTec is estimated at $119.68, suggesting that the stock is modestly undervalued. This is a shift from three months ago when the stock was considered a possible value trap.
Overview of MasTec Inc
MasTec Inc operates across various sectors, including communications, oil and gas, utility, renewable energy, and other infrastructure projects. The company is structured into five reportable segments: communications; clean energy and infrastructure; oil and gas; power delivery; and others. This diversification allows MasTec to leverage opportunities across multiple booming industries, particularly in renewable energy and communications infrastructure, aligning well with current economic trends and government policies favoring infrastructure development.
Assessing MasTec's Profitability
MasTec's Profitability Rank stands at 7 out of 10, which is commendable and indicates robust prospects for maintaining its profitability. The company's Operating Margin is currently at 0.67%, which is better than 24.68% of its peers in the industry. However, its Return on Equity (ROE) and Return on Assets (ROA) are at -1.85% and -0.54% respectively, which, despite being low, still ranks better than over 20% of its competitors. The Return on Invested Capital (ROIC) is at 0.62%, also ranking better than 26.85% of its peers. These figures suggest that while MasTec is profitable, there is room for improvement in capital efficiency and asset utilization.
Growth Trajectory of MasTec
The company's Growth Rank is also 7 out of 10, reflecting strong revenue growth metrics. MasTec's 3-year revenue growth rate per share stands at 21.70%, significantly higher than 85.15% of its peers. Its 5-year figure is also robust at 12.20%. However, the EPS figures tell a different story, with a 3-year EPS without NRI growth rate at -26.70% and a 5-year rate at -13.70%, indicating challenges in maintaining net income growth. Despite these figures, the estimated future EPS growth rate over the next 3 to 5 years is an impressive 39.30%, suggesting optimism about the company's future profitability.
Investor Confidence and Market Position
Notable investors in MasTec include Steven Cohen (Trades, Portfolio), holding 1,022,700 shares, and Richard Pzena (Trades, Portfolio) with 201,777 shares, demonstrating significant guru confidence in the stock. In comparison to its competitors like Fluor Corp (FLR, Financial) with a market cap of $6.5 billion, and KBR Inc (KBR, Financial) at $8.91 billion, MasTec holds a competitive position within the industry, underscored by its diverse operations and strategic focus on high-growth sectors.
Conclusion
In conclusion, MasTec's recent stock performance can be attributed to its strategic market positioning and diversified operations across high-demand sectors. While there are areas for improvement in profitability and EPS growth, the company's strong revenue growth and future growth projections provide a positive outlook. Investors should consider the competitive landscape and the company's robust growth metrics when evaluating its stock for potential investment.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
