Everus Construction Group: A High-Growth Infrastructure Play in a Diversified Market

In an era of accelerating digital transformation and infrastructure modernization, Everus Construction Group (ECG) has emerged as a compelling investment opportunity. The company's strategic focus on high-growth sectors—particularly its Electrical and Mechanical (E&M) segment dominance, Transmission and Distribution (T&D) backlog momentum, and margin expansion—positions it to capitalize on a $1.2 trillion U.S. infrastructure spending environment. As governments and private entities prioritize data centers, utility upgrades, and renewable energy projects, Everus's diversified capabilities and operational discipline make it a standout player in a fragmented market.

E&M Segment: A Catalyst for Sustained Growth

Everus's E&M segment has been a cornerstone of its success, with revenues surging 41.6% year-over-year to $713.6 million in Q2 2025. This growth was driven by a 24.4% increase in backlog to $2.6 billion, reflecting robust demand in commercial and data center construction. The segment's net income margin expanded to 6.6%, up from 5.8% in 2024, while EBITDA margins rose to 8.9% from 8.2%. These metrics underscore Everus's ability to execute complex projects efficiently, even amid a challenging project mix and rising SG&A expenses.

The E&M segment's outperformance relative to peers is equally compelling. While competitors like TopBuild (BLD) and IES (IESC) report higher revenue and earnings, Everus's return on equity (33.27%) and media sentiment score (1.11) outpace TopBuild's 28.32% ROE and 0.62 score. Analysts project a 4.70% upside for Everus, compared to a 4.69% downside for TopBuild, highlighting growing confidence in its long-term trajectory.

T&D Backlog: A Hidden Engine of Momentum

While the E&M segment commands attention, Everus's T&D segment is quietly gaining traction. As of June 30, 2025, the T&D backlog surged 49.9% to $410.1 million, driven by demand for utility infrastructure and undergrounding projects. This growth is critical in a market where T&D spending is projected to grow at a 6.5% CAGR through 2030.

The T&D segment's EBITDA margin also expanded to 14.3% in Q2 2025, up from 12.3% in 2024, despite a 2% revenue decline in Q1 2025. This resilience stems from disciplined cost management and a favorable project mix, with transportation and traffic signalization work offsetting utility sector headwinds. Everus's CEO emphasized the segment's alignment with long-term trends, including grid modernization and high-tech reshoring, which are expected to drive sustained demand.

Margin Expansion: A Path to Re-Rating

Everus's margin expansion across both segments is a key driver of its re-rating potential. The E&M segment's EBITDA margin improvement (8.9% in Q2 2025) and T&D's 14.3% margin highlight the company's operational efficiency. These figures outperform industry averages for construction services, which typically hover between 5% and 12%.

The company's ability to maintain margins despite rising costs and project complexity is a testament to its strategic focus on high-margin work and its 4EVER strategy—prioritizing long-term customer relationships, project execution, and capital efficiency. With a combined EBITDA margin of 9.1% for Q2 2025, Everus is well-positioned to benefit from infrastructure spending tailwinds while maintaining profitability.

Investment Thesis: A Re-Rating in the Making

Everus's competitive advantages are clear:
1. Diversified End Markets: Exposure to data centers, utilities, and renewables insulates it from sector-specific downturns.
2. Robust Backlog: $3.0 billion in combined E&M and T&D backlog ensures steady revenue visibility.
3. Margin Resilience: Operational discipline and project execution capabilities support margin expansion.

The company's valuation also appears attractive. At a forward P/E of 12.5x, Everus trades at a discount to peers like TopBuild (18.5x) and IES (15.2x), despite superior ROE and growth metrics. Analysts project a 2025 EBITDA range of $210–$225 million, with T&D contributing a growing share of this growth.

Conclusion: A Strategic Bet on Infrastructure's Future

Everus Construction Group is not just a construction company—it is a strategic partner in the infrastructure revolution. Its E&M segment dominance, T&D backlog momentum, and margin expansion create a compelling case for a re-rating in a rising infrastructure environment. For investors seeking exposure to long-term secular trends, Everus offers a rare combination of growth, profitability, and operational excellence.

Investment Recommendation: Buy. Everus's strong backlog, margin expansion, and alignment with infrastructure megatrends justify a re-rating. Target price: $73.67 (4.70% upside).