EMCOR's Expanding RPOs Enhance Revenue Visibility in 2025-2026

December 26, 2025 December 26, 2025

Editorial Staff

The Facts -

U.S. construction is bolstered by federal infrastructure initiatives.

EMCOR's RPOs ensure revenue stability, reaching $12.61 billion in 2025.

EMCOR stock has gained 18%, underperforming the industry but beating the sector.

In a notable upswing, U.S. construction activity is being propelled by federal infrastructure initiatives and burgeoning data center projects. Operating within this thriving environment is EMCOR Group, Inc. (EME), which is benefiting from sustained demand fueled by the Infrastructure Investment and Jobs Act and complementary state and municipal programs. These factors are driving needs for engineering, construction, and specialty services across infrastructure, healthcare, manufacturing, and mission-critical facilities.

EMCOR's Remaining Performance Obligations (RPO) are pivotal in maintaining revenue consistency as we move towards 2026. The diverse RPO portfolio showcases contracted efforts across various markets, offering a glimpse into future endeavors and enabling efficient labor and resource allocation towards more lucrative ventures.

In the third quarter of 2025, EMCOR achieved unprecedented RPO figures, mirroring widespread gains in sectors such as Network & Communications, healthcare, manufacturing, and water and wastewater. As of September 30, 2025, RPOs surged to $12.61 billion from $9.79 billion the previous year, with Network & Communications seeing the most significant increase—nearly doubling from the past year. Growth was also noted in healthcare and manufacturing segments, bolstered by acquisitions and onshoring trends, while substantial project awards in Florida supported the water and wastewater sectors.

The varied array of multi-year projects is extending revenue foresight beyond the immediate future. Supported by favorable financial conditions like the recent Federal Reserve interest rate reductions and the possibility of further easing in 2026, project financing remains robust. These elements collectively position EMCOR’s RPO structure to ensure stable revenue generation and enhanced clarity as 2026 approaches.

Peer Backlogs Reinforce Revenue Visibility

Similar trends in infrastructure and data center investments are boosting revenue clarity for EMCOR’s peers, notably Quanta Services, Inc. (PWR) and Sterling Infrastructure, Inc. (STRL). These companies are experiencing growth in their project pipelines, driven by power, grid modernization, and essential development initiatives.

Quanta is witnessing growing demand as it enhances power, transmission, and grid infrastructure across the country. The company reported a record backlog of $39.2 billion in the third quarter of 2025, an increase from $33.96 billion the previous year. This diverse mix of utility services and large-scale projects provides substantial execution momentum heading into 2026.

Sterling is similarly boosting forward outlook through involvement in large, multi-phase projects. In the third quarter of 2025, Sterling announced a signed backlog of approximately $2.6 billion, marking a 64% year-over-year rise, with total potential work surpassing $4 billion when considering future phases. Its focus on E-Infrastructure is sustaining ongoing, long-term activity.

EMCOR Stock’s Price Performance vs. Other Market Players

Over the past six months, shares of this Connecticut-based infrastructure service provider have risen by 18%, underperforming the Zacks Building Products - Heavy Construction industry, but outperforming the broader Construction sector and the S&P 500 Index.

In comparison, Quanta and Sterling shares have gained 35.6% and 13.7%, respectively, during the same period.

EME’s Valuation Trend

Currently, EME stock trades at a premium relative to its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 22.86, as illustrated by the accompanying chart.