Overview of the Downgrade#
Kansas City Capital has downgraded MYR Group's stock rating from "Outperform" to "Perform" following the company's first-quarter results for 2026. This change comes despite MYR Group's impressive financial performance during the quarter.
Strong Earnings and Revenue Growth#
MYR Group reported earnings per share (EPS) of $2.99, a significant increase from $1.45 in the same quarter last year. This figure also exceeded Kansas City Capital's estimate of $1.93. The company's revenue reached $1.0 billion, marking a 20% increase year-over-year and surpassing the firm's estimate of $920 million. MYR Group's market capitalization now stands at $6.98 billion, with its shares having surged 180% over the past year, nearing a 52-week high of $433.61.
Margins and Financial Health#
The company's gross margins improved to 13.4%, up from 11.6% in the previous year and above the estimated 11.7%. The transmission and distribution segment saw a revenue growth of 17.1%, while the commercial and industrial segment experienced a 23.6% increase. Consolidated operating margins reached 6.6%, exceeding the estimate of 4.2% and marking the highest quarterly figure since late 2014. MYR Group also boasts a perfect Piotroski Score of 9, indicating strong financial health across various metrics.
Backlog and Future Prospects#
At the end of the quarter, MYR Group's consolidated backlog stood at $2.84 billion, unchanged from the previous quarter but up 7.7% compared to the same period last year. Kansas City Capital attributed the better-than-expected margins to factors such as project productivity and effective execution. These financial results reflect MYR Group's robust performance and are important for stakeholders keeping an eye on the company's financial health and business strategy.