Assessing MYR Group (MYRG) Valuation As Backlog Stalls And Costs Pressure Margins
Why MYR Group’s recent contract and cost trends matter for shareholders
MYR Group (MYRG) is contending with a flat project backlog over the past two years and higher production costs that are pressuring gross margins and reducing returns on capital, raising fresh questions about the stock’s risk and reward profile.
See our latest analysis for MYR Group.
Despite the contract and cost headwinds, MYR Group’s share price has climbed to US$273.95, with a 30-day share price return of 9.42% and a 1-year total shareholder return of 104.44%, suggesting strong recent momentum alongside longer term gains.
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With MYR Group trading at US$273.95, above the average analyst price target of US$254.33 and an intrinsic value estimate implying an 8.88% premium, investors may ask whether there is still a buying opportunity or if the market is already pricing in future growth.
Most Popular Narrative: 7.7% Overvalued
At $273.95, MYR Group is trading above the most followed fair value estimate of $254.33, which is built using an 8.53% discount rate and detailed earnings assumptions.
Increased project mix in higher-margin segments (such as battery storage and data centers), combined with operational improvements and careful contract selectivity, are positioned to contribute to steady margin expansion and higher net earnings over time.
Curious what earnings path and margin profile have to line up for that fair value to make sense? The narrative leans heavily on compounding revenue, rising profitability, and a future earnings multiple that has to reset meaningfully from where it is today. The full set of assumptions is where the story really gets interesting.
Result: Fair Value of $254.33 (OVERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, the story can change quickly if labor costs bite harder or if the uneven commercial and industrial backlog leads to weaker revenue visibility.
Find out about the key risks to this MYR Group narrative.
Build Your Own MYR Group Narrative
If you are not fully aligned with this view or prefer to rely on your own work, you can review the data, adjust the assumptions, and Do it your way in just a few minutes.
A good starting point is our analysis highlighting 2 key rewards investors are optimistic about regarding MYR Group.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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