Matrix Service Company (MTRX) in Longcast Advisors 2024 Q2

Potential Revenue Rebound Amidst Backlog Growth

Apr 15, 2025

Summary

Investment rationale: High backlog levels suggest potential revenue growth.
Market positioning: Historically strong in construction services with a focus on energy and industrial sectors.
Risks and challenges: Recent revenue declines and market disinterest.
Recent performance: Backlog at historic highs, but revenue has lagged.
Future outlook: Possible revenue rebound if projects proceed as expected.

In Longcast Advisors' Q2 2024 letter, Matrix Service Company (MTRX, Financial) was highlighted as a significant position due to its potential for revenue growth driven by a historically high backlog. Despite recent declines in revenue and gross profit, the company’s backlog and billings in excess of costs have improved dramatically, suggesting a possible future revenue rebound.

"Investing is a 'what you have done for me lately' business and just about everything MTRX has done 'lately' is unappealing, with five years of declines in revenues and gross profit and until a year ago, a material slide in backlog. It’s easy to understand why the market isn’t interested in this company. Things are changing, however, leading to what I think is a variant view." — Longcast Advisors, Q2 2024 Fund Letter

Read full letter at gurufocus Longcast Advisors 2024 Q2 page.

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