Episode Details

Everus Construction Group, Inc. (ECG) Q2 2026 — Revenue $1,231.5M UP 33.7% (organic UP 30.0%). EBITDA $128.6M UP 52.7%, a 10.4% margin. GAAP diluted EPS $1.64 vs $1.14 consensus - a 44% beat, no adjusted number. Record backlog $4.55B, UP 52.8%. FY26 EBITDA guide RAISED to $410-425M. Stock closed $140.75, up 3.4% - but $6.41 BELOW its own open. Everus beat by 44%, posted a record $4.55B backlog and raised guidance a third time - then opened up 8%, ran to $155.99 and closed at $140.75, near the low. The beat is clean GAAP. But the guide they just raised implies a second half of exactly $200M against a $217.5M first half. THE CALL: HOLD (3/5, AN EXCELLENT BUSINESS AT A PRICE THAT ALREADY KNOWS IT) — base-case value ~$130.0 vs ~$140.75 today. KEY METRICS: - CALL: HOLD 3/5, fair value ~$130 vs the $140.75 close (-8%), against the Street's $169.60 (+20.5%). Base: revenue compounds 15/12/10% off the company guide, margin eases to 10.0%, 2029 EBITDA $652M on a 15.0x exit at 10.5% = $133.58. Bear $66.79 (capex digests, 8.5% margin, 11.0x). Bull $160.63 (today's 18.0x holds). Weighted 30/50/20 = $128.34. Run backwards: the $7,307M enterprise needs $684M of 2029 EBITDA at a 15x exit - 18% a year for three more years. - THE GUIDE THEY JUST RAISED IMPLIES A SMALLER SECOND HALF. FY26 revenue went to $4.5-4.7B (from $4.3-4.4B) and EBITDA to $410-425M (from $345-360M) - $65M at the midpoint, the third raise this year. But 1H EBITDA was $217.5M and the new midpoint is $417.5M, so the implied 2H is exactly $200.0M - BELOW the first half. In 2025 the 2H ($173.8M) was 19% BIGGER than the 1H ($146.0M). Implied 2H growth 15.1% vs 49.0%; implied margin 8.6% vs 10.4% this quarter. - THE RECORD BACKLOG IS NOT A GAAP NUMBER, AND IT IS 12 MONTHS LONG. Backlog $4,551.6M, up 52.8% - but Everus discloses it can include letters of intent, notices to proceed and probable claims. The audited measure is remaining performance obligations: at Dec 31 backlog was $3,228.3M against RPO of $2,800M, 15% higher. Of $3.09B of RPO at Mar 31, only $492.6M (16%) runs beyond 12 months, and most contracts have an original duration under one year. - ONE CUSTOMER IS 19.1% OF REVENUE, AND ALL THE GROWTH IS ONE SEGMENT. In the March quarter a single customer was 19.1% of total revenue (up from 13.3%), 23.6% of E&M revenue, and 19.7% of ALL trade receivables. E&M backlog is $4,163.2M (up 62.1%, 91.5% of the total) while T&D backlog is $388.4M - DOWN from $410.1M a year ago. E&M added $1,595M while T&D lost $22M, so E&M is MORE than 100% of the growth. Beta 2.47. - THE BEAT IS SHRINKING - AND THE BALANCE SHEET IS THE BEST PART. Beats since the spin: +67%, +69%, +79%, +50%, +50%, now +44% - the smallest yet. The stock rose 24.7% into the print (from $109.17 on Jul 29). At $140.75 the $7,307M enterprise is 17.5x the FY26 EBITDA guide and 18.7x trailing, against EMCOR 16.5x, MasTec/MYR 18.5x, IES 26.1x, Comfort Systems 30.4x. 1H free cash flow $167.0M vs $6.5M; net leverage 0.3x; ROIC ~21%. What to watch: UP: Q3 EBITDA above $105M, backlog above $5B, another FY26 raise above $440M. BEAR: backlog DOWN sequentially, the top customer above 25% of revenue, or any hyperscaler trimming capex. We would buy $105-$118. Also on YouTube: @ChargedAlpha DISCLAIMER: For informational and educational purposes only. Not financial advice. Do your own research before any investment decision.