MasTec Stock Surges 29% in 6 Months: Still a Buy for Investors?

Shares of MasTec, Inc. MTZ have gained 29.4% over the past six months, outperforming the 26.4% growth in the Zacks Building Products - Heavy Construction industry. The stock has also surpassed the broader Construction sector's growth of 7% and the S&P 500 index’s 10.9% rally during the same period.As of Thursday, the stock closed at $138.50, below its 52-week high of $150.12 but well above its 52-week low of $60.96. The MTZ stock has outperformed some other players in the past six months, including AECOM ACM, Fluor Corporation FLR and Stantec Inc. STN. In the said time frame, ACM and FLR have gained 23.4% and 16.4%, respectively, while STN has declined 4.5%.MTZ Stock’s Six-Month Price PerformanceImage Source: Zacks Investment ResearchMTZ Stock Trading Above 50 & 200-Day SMATechnical indicators suggest a continued strong performance for MasTec. From the graphical representation given below, it can be observed that the MTZ stock is trading above both the 50-day simple moving average (SMA) and 200-day SMA, signaling a bullish trend. The technical strength underscores positive market sentiment and confidence in MTZ’s financial health and prospects.Image Source: Zacks Investment ResearchFactors Favoring MTZ Stock’s SurgeThis Coral Gables, FL-based leading infrastructure construction company, is benefiting from strong performance in the Clean Energy & Infrastructure segment (accounted for 35% of total third-quarter 2024 revenues), supported by a diversified business model and strategic acquisitions. MasTec is positioned for growth across key segments, driven by solid market demand and a robust backlog. The company’s ability to deliver comprehensive solutions for increasingly complex projects enhances its role as a reliable partner for customers. Favorable macroeconomic trends and improved project efficiencies are also contributing to end-market expansion.The Communications segment, which accounted for 28.5% of MasTec’s third-quarter revenues, continues to deliver robust growth fueled by expanding market opportunities and rising demand for advanced network infrastructure. The segment achieved double-digit revenue growth both year-over-year and sequentially, reaching its highest revenue levels to date.On the wireless side, MasTec is expanding its market share with AT&T while the Nokia Ericsson swap-out progresses as planned. The wireline segment also sees strong demand, with Broadband Equity, Access and Deployment funding, along with rising fiber needs driven by artificial intelligence and data centers, which are expected to drive growth. Additionally, MasTec secured a major fiber build from Lumen Technologies, covering over 8,000 miles to expand high-capacity network infrastructure.As of Sept. 30, 2024, MasTec reported an 18-month backlog totaling $13.86 billion, marking a 3.9% sequential rise and an 11% increase compared to the prior year. This record-high backlog strengthens the company’s momentum heading into 2025, offering clear visibility into upcoming projects that will drive future performance.MasTec has demonstrated strong financial discipline, prioritizing cash flow generation and efficient capital allocation. The company has made significant progress in deleveraging since its 2022 acquisition, repaying over $900 million of debt through the third quarter of 2024. MasTec’s cash flow conversion has been a key highlight, with approximately 85% of adjusted EBITDA being converted into cash flow.In the first nine months of 2024, the company generated $649.9 million in net cash from operating activities, surpassing last year’s figure of $196.6 million. This performance has exceeded previous full-year expectations, with MasTec targeting year-end leverage in the low 2X range, further strengthening its financial flexibility.MTZ’s Positive Growth Outlook for 2025MasTec expects strong growth in 2025, supported by favorable macroeconomic trends, operational efficiencies and a solid project mix. The company anticipates continued expansion across key segments, including communications, power delivery and clean energy. It forecasts double-digit revenue growth in these areas, along with improved margins compared to 2024. In power delivery, MasTec expects significant revenue growth as large transmission projects ramp up. These positive trends are expected to continue beyond 2025, reinforcing the company’s long-term growth prospects.Infrastructure Growth Fuels MTZ’s Future ProspectMasTec is well-positioned to benefit from the rise in infrastructure spending driven by government initiatives like the Infrastructure Investment and Jobs Act and the Inflation Reduction Act. Increased investments in clean energy, power delivery, and water infrastructure align with the company’s strategic focus on these high-growth sectors. As government spending expands, MasTec’s long-term growth prospects are strengthened, positioning it to capture more opportunities in the market.Estimate Revision of MTZ StockImage Source: Zacks Investment ResearchThe Zacks Consensus Estimate for MTZ’s 2025 earnings has trended upward by 1.5% to $5.38 in the past seven days. The estimated figure indicates growth of 23.3% from a year ago.Conclusion: Why MTZ Stock is a Must-BuyMasTec is well-positioned for growth in 2025, supported by strong performance in key segments like Clean Energy, Communications, and Power Delivery. The company is benefiting from a solid project backlog, favorable macroeconomic trends, and growing market demand, which is driving expansion in these areas. With efficient capital allocation, a strong cash flow, and strategic investments, MasTec is set to capitalize on rising infrastructure spending and government initiatives. As a Zacks Rank #1 (Strong Buy) stock, MasTec remains an attractive investment, offering compelling growth potential in the infrastructure sector. 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