Breaking Down MYR Group Inc. (MYRG) Financial Health: Key Insights for Investors

You're looking at MYR Group Inc. (MYRG) and wondering if the electric utility infrastructure boom is translating to real shareholder value. The direct takeaway is yes, their financial health is defintely robust, fueled by the accelerating pace of electrification and infrastructure spend. The company just reported a record third quarter for 2025, delivering $950.4 million in revenue and a net income of $32.1 million, which translates to $2.05 per diluted share, a solid beat over analyst consensus. This momentum pushed their first nine months of 2025 net income to a significant $81.9 million. But, to be fair, what this momentum hides is the risk from persistent labor shortages and the volatility in renewables project revenue that we've seen. So, the question isn't just about the beat; it's about how they convert that massive $2.66 billion backlog-the work they have yet to complete-into sustainable, long-term margin growth.

Revenue Analysis

You want to know where MYR Group Inc. (MYRG) is making its money, and the direct takeaway is that their growth engine is firing, posting strong year-over-year (YoY) increases driven by both core segments. For the first nine months of 2025, MYR Group Inc. reported total revenues of $2.68 billion, an increase of $151.8 million compared to the same period in 2024.

The company's primary revenue comes from two distinct but complementary business segments: Transmission and Distribution (T&D) and Commercial and Industrial (C&I). This dual-segment model provides a solid foundation, balancing utility infrastructure work with high-growth commercial projects. Honestly, that diversification is a key risk mitigator.

Segment Contribution and Growth

In the third quarter of 2025, MYR Group Inc. saw total revenues climb to $950.4 million, which is a 7% increase from the third quarter of 2024. The T&D segment, which focuses on electric utility infrastructure like transmission lines, distribution networks, and substations, still accounts for the majority of the business, but C&I is closing the gap fast.

Here's the quick math on the segment split for Q3 2025:

• Transmission and Distribution (T&D): Contributed $503.4 million, representing about 53.0% of total revenue.
• Commercial and Industrial (C&I): Contributed $447.0 million, or about 47.0% of total revenue.

The table below shows how each segment performed in Q3 2025, highlighting the year-over-year revenue growth in absolute dollars. The C&I segment's growth was defintely more pronounced in the quarter.

The T&D segment's Q3 2025 increase was split between a $16.3 million rise in transmission projects and a $5.2 million gain in distribution projects.

Shifts in Revenue Streams and Near-Term Opportunities

What this data hides is a subtle but important shift in the T&D segment. While the segment is growing overall, the first nine months of 2025 showed a dip in revenue from transmission projects specifically related to clean energy, which was offset by a stronger performance in distribution projects. This suggests a strategic selectivity in clean energy work, as management has noted.

The real opportunity is visible in the C&I segment, which saw a massive $110.9 million revenue increase for the first nine months of 2025. This growth is directly tied to the accelerating pace of electrification and infrastructure investment. The C&I segment is capitalizing on high-demand core markets, specifically:

• Building out massive data centers
• Projects in the healthcare sector
• Work on manufacturing facilities

This focus on data centers, driven by the demand for artificial intelligence (AI) infrastructure, is a clear, near-term tailwind for the C&I segment. The total backlog as of September 30, 2025, stood at $2.66 billion, a strong indicator of future revenue stability. For a deeper dive into the company's valuation, you can check out Breaking Down MYR Group Inc. (MYRG) Financial Health: Key Insights for Investors.

Next step: Portfolio Manager, review your current infrastructure exposure and see if MYR Group Inc.'s C&I backlog aligns with your data center investment thesis by next Tuesday.

Profitability Metrics

You want to know if MYR Group Inc. (MYRG) is making money efficiently, and the quick answer is yes, they are improving, but their bottom line still lags the best-in-class specialty contractors. The key is that while their gross margin is tight, the trend is positive, driven by a better mix of higher-value projects.

For the third quarter of 2025, MYR Group Inc. reported revenue of $950.4 million, which translated into a strong gross profit performance but a relatively thin net profit. Here's the quick math on the key margins for Q3 2025, which gives us the clearest picture of the current fiscal year performance:

• Gross Profit Margin: 11.8%. This is the slice of revenue left after paying for direct costs like labor and materials.
• EBITDA Margin: 6.6%. This is a strong proxy for operational profit (Earnings Before Interest, Taxes, Depreciation, and Amortization) and shows what's left after most overhead is covered. (Calculated as $62.7 million EBITDA / $950.4 million Revenue).
• Net Profit Margin: 2.78%. This is the final take-home percentage after all expenses, including taxes. (Q3 Net Income of $32.1 million on $950.4 million in revenue).

Trends in Profitability and Operational Efficiency

The most important story here is the trend, not just the absolute number. MYR Group Inc. is defintely executing better in 2025. The consolidated gross margin for the first nine months of 2025 was 11.6%, a significant jump from the prior year, indicating that the core project execution is improving. This margin expansion is driven by two clear actions: a better project mix and improved productivity.

Specifically, the company is capitalizing on high-demand sectors like battery storage and data center work, which typically command higher contractual margins. Plus, they are seeing favorable change orders and better-than-anticipated productivity on their jobs, which is a sign of effective project management and cost control. The gross margin is moving in the right direction.

Mission Statement, Vision, & Core Values of MYR Group Inc. (MYRG).

Industry Comparison and Near-Term Risks

When you compare MYR Group Inc.'s margins to the broader specialty contracting industry, you see the challenge. Specialty trade contractors-which MYR Group Inc. is-typically see gross margins between 15% and 25%, and net margins for well-managed firms in the 5% to 8% range.

MYR Group Inc.'s Q3 2025 Gross Margin of 11.8% is below that specialty contractor range, putting it closer to a general contractor's typical margin of 12% to 16%. The Net Margin of 2.78% is also significantly below the industry's healthy target. Here's a quick look at how the segments are expected to perform:

What this comparison tells you is that while the company is doing a great job managing costs (SG&A, or Selling, General, and Administrative expenses, is contained), the initial pricing on their contracts, especially in the competitive C&I segment, is the primary constraint on the final net margin. The risk is that rising labor costs could easily compress that thin 2.78% net margin if they can't continue to secure higher-margin work in the T&D segment, like the high-voltage transmission upgrades that are currently a major tailwind.

Debt vs. Equity Structure

You're looking at MYR Group Inc. (MYRG)'s balance sheet to gauge its risk, and the direct takeaway is this: the company is exceptionally conservative, favoring equity over debt to fund its operations. This low-leverage approach provides a substantial buffer against economic downturns and rising interest rates.

MYR Group Inc. operates with a very light debt load, especially for a capital-intensive business. As of the third quarter ending September 30, 2025, the company reported total funded debt of approximately $72 million. This funded debt is primarily composed of long-term obligations, which stood at about $83.25 million as of June 30, 2025. The distinction between short-term and long-term debt is less critical here because the overall quantum is so small.

• Total Funded Debt (Q3 2025): $72 million
• Long-Term Debt (Q2 2025): $83.25 million
• Funded Debt-to-EBITDA: 0.34x (Q3 2025)

The best way to see how conservative this is is through the Debt-to-Equity (D/E) ratio. MYR Group Inc.'s D/E ratio is currently around 0.14, which means for every dollar of shareholder equity, the company carries only about 14 cents of debt. To be fair, this is a very strong position.

Compare that to the industry. The average D/E ratio for the broader Construction & Engineering sector in 2025 is around 0.6549, and a healthy range for construction companies is typically considered to be between 0.5 and 1.5. MYR Group Inc. is operating at a fraction of the industry average, which is a defintely positive sign for solvency.

The low leverage gives MYR Group Inc. significant financial flexibility. The company's primary debt management tool is its revolving credit facility, under which it had a substantial $400 million in borrowing availability as of September 30, 2025. This capacity, combined with a strong funded debt-to-EBITDA leverage ratio of 0.34x, indicates that the company has ample dry powder for organic growth, opportunistic acquisitions, or share repurchases, without needing to issue new equity and dilute shareholders. They are balancing growth needs with a strong preference for equity and retained earnings over external debt, a strategy that minimizes interest expense risk in a high-rate environment.

For a deeper dive into the company's full financial picture, you can read the full post: Breaking Down MYR Group Inc. (MYRG) Financial Health: Key Insights for Investors.

Liquidity and Solvency

You want to know if MYR Group Inc. (MYRG) has the cash to cover its near-term obligations and seize new opportunities. The short answer is yes: the company's liquidity position is strong, anchored by robust working capital and record operating cash flow in the most recent quarter. This financial health gives them serious flexibility to pursue growth, especially in the booming data center market.

Current and Quick Ratios Signal Strength

A look at the balance sheet as of September 30, 2025, shows MYR Group Inc. (MYRG) is in a solid position to handle its immediate debts. The company's Current Ratio, which measures current assets against current liabilities, sits at approximately 1.33. This means for every dollar of short-term debt, they have $1.33 in assets that should convert to cash within a year. That's a comfortable buffer.

The Quick Ratio (or acid-test ratio), which is a stricter measure because it excludes inventory and some other less-liquid assets, is also impressive at approximately 1.31. For a construction and contracting business, this high Quick Ratio is defintely a strength. It tells us that even without relying on selling all of their equipment or prepaid expenses, they can cover their short-term obligations easily. The reason this number is so close to the Current Ratio is that for MYR Group Inc. (MYRG), the Quick Assets calculation includes their Contract Assets (unbilled revenue), which are expected to be billed and collected quickly, a common practice in this industry.

• Current Ratio (Q3 2025): 1.33
• Quick Ratio (TTM Q3 2025): 1.31
• The ratios are high, showing excellent short-term debt coverage.

Working Capital and Cash Flow Trends

Working capital-the capital available for day-to-day operations-is healthy, coming in at approximately $267.4 million as of September 30, 2025. This figure demonstrates a good operational cushion. But the real story is in the cash flow statement, where we see the quality of the company's earnings.

The company reported a record-breaking operating cash flow (OCF) of $96 million for the third quarter of 2025 alone, a significant jump from the prior year. This massive increase is due to better net income and excellent management of working capital, specifically the timing of project billings and payments. Strong OCF is the lifeblood of any growing company; it means the core business is generating more than enough cash to fuel itself.

Here's a quick snapshot of the cash flow picture for the first nine months of 2025 (in thousands):

Liquidity Strengths and Clear Actions

The biggest strength here is the combination of high liquidity ratios and exceptional cash generation. MYR Group Inc. (MYRG) has a substantial borrowing capacity, with approximately $399.8 million available under its $490 million revolving credit facility as of September 30, 2025. This is a huge, untapped safety net and a war chest for acquisitions or major capital expenditures. The company's focus on key growth areas, which you can read more about in their Mission Statement, Vision, & Core Values of MYR Group Inc. (MYRG), is clearly being supported by its financial structure.

What this means for you is that the risk of a near-term liquidity crunch is extremely low. The company is generating cash, investing in its future (CapEx of over $64 million in 9M 2025), and has a significant credit line ready to use. Your action item is simple: Monitor the OCF trend; if it remains this strong, it confirms the high quality of their earnings and their ability to execute on their backlog of $2.66 billion.

Valuation Analysis

You're asking if MYR Group Inc. (MYRG) is overvalued or undervalued right now. Honestly, based on the estimated fiscal year 2025 multiples, the stock looks fairly valued to slightly expensive, but that premium is earned because of their strong position in critical U.S. infrastructure spending-think high-voltage transmission and renewable energy integration. The market is pricing in significant growth, not just current earnings.

To be fair, the stock has been a winner. Over the last 12 months, MYR Group Inc.'s stock price has climbed roughly 45%, moving from around $107.00 to a current price near $155.00. That kind of run-up means investors are betting big on the long-term infrastructure cycle. Here's the quick math on where the valuation sits against estimated 2025 figures:

• Price-to-Earnings (P/E) Ratio: 22.5x
• Price-to-Book (P/B) Ratio: 3.8x
• Enterprise Value-to-EBITDA (EV/EBITDA): 14.0x

A P/E of 22.5x is above the historical average for the construction and engineering sector, which suggests a growth premium is baked in. What this estimate hides is the potential for earnings acceleration if major government infrastructure projects hit their stride in late 2025 and 2026. The EV-to-EBITDA (Enterprise Value-to-Earnings Before Interest, Taxes, Depreciation, and Amortization) at 14.0x confirms the market is paying a high price for the company's operating cash flow generation.

MYR Group Inc. doesn't pay a common dividend, so the dividend yield is 0.0%. They prefer to reinvest all capital back into the business, which is smart for a company in a high-growth, high-capital-expenditure sector. That means you're buying this stock purely for capital appreciation, not income.

The analyst community is defintely bullish. The consensus rating right now is a Strong Buy, with a breakdown of 10 Buy ratings, 2 Hold ratings, and 0 Sell ratings. The average 12-month price target suggests another 10% upside from the current $155.00 level. This is a clear signal that the street believes the company can grow into its current valuation, but you still need to watch those quarterly earnings closely. For a deeper dive into the drivers behind these numbers, check out Breaking Down MYR Group Inc. (MYRG) Financial Health: Key Insights for Investors.

Here is a summary of the key valuation metrics:

Finance: Track Q4 2025 earnings guidance for any shifts in the P/E multiple by December.

Risk Factors

You're looking at MYR Group Inc. (MYRG)'s strong Q3 2025 results-a $950.4 million revenue quarter and a $2.66 billion backlog-and thinking the path is clear. But as a veteran analyst, I see the operational and external headwinds that could slow down this momentum. The key takeaway is this: near-term growth is solid, but persistent cost inflation and project execution risk are the main watch points for the next 12 to 18 months.

The core challenge for MYR Group Inc. (MYRG) is managing the cost side of its booming business, especially as it executes on that massive backlog. We saw a clear signal in the third quarter of 2025: despite record net income of $32.1 million, the company faced increased costs from project inefficiencies, unfavorable change orders, and even inclement weather. That's the reality of large-scale construction-it's not a clean, predictable process.

Another financial pressure point is the Selling, General and Administrative (SG&A) line. SG&A expenses jumped by $8 million in Q3 2025, largely due to higher employee incentive compensation and other employee-related expenses. While rewarding performance is good, this rise reflects the intense competition for skilled labor, which is a major operational risk.

• Labor and material availability remain persistent challenges.
• Project inefficiencies can turn a high-margin job into a loss.
• Volatile backlog trends introduce revenue lumpiness.

The external environment presents a few clear risks you need to map out. First, there's the macro risk of tariffs and inflation, which particularly pressure the fixed-price contracts in the Commercial and Industrial (C&I) segment. Second, the company's Transmission and Distribution (T&D) segment is seeing a decline in solar-related revenue, forcing a strategic pivot. Third, larger, multi-year transmission projects-the kind that drive significant, long-term growth-are currently anticipated to not start until 2027. That leaves a near-term growth gap that must be filled by smaller, faster-turnaround work.

Finally, regulatory risk is a constant factor in utility work. Unfavorable regulatory environments, permitting challenges, and weather-related issues can all impede growth and margin expansion, which is why analysts have been cautious about some of the 2025 margin expectations.

Here's a quick look at the risk-mitigation strategies MYR Group Inc. (MYRG) is employing:

The company's strong liquidity, with $400 million in borrowing availability, gives them the financial flexibility to pursue strategic acquisitions and weather any short-term project volatility. They are defintely in a position of strength, but they still have to execute perfectly to meet the market's high expectations. You can read more about their strategic focus here: Mission Statement, Vision, & Core Values of MYR Group Inc. (MYRG).

Growth Opportunities

You're looking at MYR Group Inc. (MYRG) and trying to map out its runway, which is smart. The short answer is that the secular tailwinds-the long-term, non-cyclical forces-are strong, especially in the US electric infrastructure space. We're seeing a clear path for sustained revenue growth driven by two massive, intertwined trends: the AI-fueled data center boom and the national push for electrification and grid resilience.

The company is defintely well-positioned to capture this demand. Their backlog as of September 30, 2025, stood at a healthy $2.66 billion, signaling a robust pipeline of future work. That's a solid foundation for the near-term.

Here's a look at the key growth drivers and the numbers that back them up:

• AI Data Center Demand: The Commercial and Industrial (C&I) segment is directly benefiting from the AI boom. More than 170 hyperscale and co-location data centers are planned, requiring over 45 gigawatts (GW) of capacity, and MYR Group's C&I expertise is a perfect fit.
• Grid Modernization: The Transmission and Distribution (T&D) segment is capitalizing on the need to upgrade the aging US electric grid and integrate new clean energy sources. This focus on system reliability and hardening is a multi-year investment cycle.
• Strategic Contracts: A concrete example is the five-year Design-Build Electric Distribution Master Service Agreement (MSA) with Xcel Energy Inc., announced in July 2025. This single agreement is valued at over $500 million and provides a stable, long-term revenue stream through 2029. That's a huge vote of confidence from a major utility.

In terms of future revenue growth projections and earnings estimates, the 2025 fiscal year is already showing significant momentum. The trailing twelve months (TTM) revenue as of November 2025 is approximately $3.45 billion. Analysts project the annual non-GAAP Earnings Per Share (EPS) for 2025 to be around $7.26. To be fair, some analyst revenue projections for the full year are slightly lower at $3.28 billion, but the actual Q3 2025 results-revenue of $950.4 million and diluted EPS of $2.05-show the company is executing well and beating expectations.

What this estimate hides is the potential for margin expansion, which we saw in Q3 2025 with a gross margin increase to 11.8% from 8.7% in Q3 2024, driven by better productivity and favorable job closeouts.

Competitive Advantages Driving Market Share

The company's ability to win these large, complex projects isn't just about market demand; it's about their structural competitive advantages. They are one of the largest contractors in the T&D sector in the US and Canada.

Their diversified business model, spanning both the utility-focused T&D segment and the project-based C&I segment, acts as a natural hedge. When you look at their overall financial health, it's clear they are positioned to maximize returns in this environment. You can dive deeper into that analysis here: Breaking Down MYR Group Inc. (MYRG) Financial Health: Key Insights for Investors.

Next Step: Portfolio Manager: Assess current portfolio exposure to the electric infrastructure sector and draft a proposal for adjusting MYR Group Inc. (MYRG) allocation based on the $2.66 billion backlog by end of the week.