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With it being a slow news day today and with earnings season wrapping up last week, we thought it'd be a good idea to take a closer look at names that might have gotten overlooked with the large amount of earnings recently. Today, we wanted to take a closer look at Everus Construction (ECG), a provider of construction services with two operating segments: Electrical & Mechanical (E&M, 71% of contract revs) and Transmission & Distribution (T&D, 29%).

• On August 12, Everus reported a 31% yr/yr and 11% sequential increase in Q2 revs to $921.5 mln, which blew away analyst expectations for the second consecutive quarter. The EPS upside was also quite significant in Q1 and again in Q2. Top line growth was driven by continued strength in its E&M segment, as well as improved results in its T&D segment. ECG remains very excited by momentum across many of its key end markets.
• Total backlog at the end of Q2 was $3 bln, up 24% yr/yr and up 7% from the end of 2024. ECG was particularly pleased with the balanced backlog growth across both E&M and T&D as both segments posted solid 20+% yr/yr. Backlog at the end of Q2 was down modestly from its record Q1 levels. However, its backlog can be lumpy quarter to quarter. Also, its backlog includes some larger multiyear projects, many of which are just getting started.
• Everus said it was particularly pleased with favorable trends in its T&D business, driven by spending plans from many key customers. It is seeing strength across the utility end market, notably in its underground submarket, as Everus is evaluating several opportunities in its pipeline. Everus noted that the need to upgrade and expand power transmission infrastructure in the US is clear given the projected growth expected in the coming years.
• The company continues to see favorable opportunities in most submarkets, and mentioned data center and hospitality specifically. In particular, Everus is seeing very strong demand trends from data centers. The company is deeply involved in the long-term planning with many key customers, giving it good visibility. Also, ECG is well-positioned in key geographic locations where the data center buildout is ramping up.

We think Everus has been a bit overlooked and is not on a lot of radar screens. It was spun off from MDU Resources (MDU) in October 2024, so it has not even been a year since becoming independent. Also, as a spin-off, it did not get the same level of notoriety that an IPO typically generates. We also think analysts are still finding their footing in terms of that to expect from Everus. Analyst models were caught off guard following a Q4 miss, which we think caused them to be too conservative with their estimates going forward. And that was evident with ECG reporting back-to-back blowout results in Q1-Q2. We think ECG deserves to be on more radar screens as a lesser known electrical distribution and data center play.