MasTec Stock Up 26% YTD: Is the Rally Still Worth Chasing?

MasTec, Inc. MTZ has delivered a strong run in 2026, with shares gaining 25.9% year to date. The stock has outperformed the Zacks Building Products - Heavy Construction industry’s 21.8% rise, the Zacks Construction sector’s 11.9% gain and the S&P 500 Index’s 13.1% advance.

MTZ Price Performance (YTD)

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The rally has been supported by improving earnings, record backlog and strong infrastructure spending across power, clean energy, pipelines and mission-critical projects. However, with the stock already reflecting part of this growth and Communications facing near-term weakness, investors need to assess whether the current level still offers enough upside.

Record Q2 Results Strengthen MTZ’s Growth Case

MasTec’s second-quarter performance provides solid support for the stock’s YTD advance. Revenues increased 23.4% year over year to a quarterly record of $4.37 billion. Adjusted EBITDA climbed 39.8% to $384 million, while adjusted EBITDA margin expanded 100 basis points (bps) to 8.8%. Adjusted earnings per share (EPS) rose 48.8% to a second-quarter record of $2.22.

Importantly, growth was broad outside Communications. Clean Energy and Infrastructure revenues surged 43.4%, with EBITDA rising 53.9%. Power Delivery revenues advanced 19.2% and EBITDA increased 23.7%. Pipeline Infrastructure was another standout, with revenues rising 19.1% and EBITDA jumping 91%, lifting its EBITDA margin 690 bps to 18.4%.

This mix shows that MasTec is becoming less dependent on any single infrastructure market, which could make earnings growth more consistent.

MTZ’s Record Backlog Provides Strong Revenue Visibility

MasTec ended the quarter with a record 18-month backlog of $21.4 billion, up 30% year over year and about 5% sequentially. The company also reported a roughly 1.2X book-to-bill ratio.

Clean Energy and Infrastructure has been a major contributor. The earnings presentation shows that its backlog reached $7.8 billion, rising about $2.9 billion year over year. Power Delivery backlog also reached a record level of about $6.3 billion.

This backlog matters because the demand drivers extend beyond 2026. MasTec is seeing spending tied to grid modernization, power generation, data centers, industrial infrastructure and natural gas infrastructure. Management also noted that the pace of project bids, negotiations and longer-term development remains very strong, with large project pursuits increasing during the second quarter.

AI, Power Demand and Superior Expand MasTec’s Opportunity

The acquisition of The Superior Group adds another growth engine. Superior brings roughly 3,000 employees and strong capabilities in electrical construction for data centers, while also serving healthcare, entertainment and industrial markets. The combination should allow MasTec to offer customers a broader range of integrated infrastructure services.

The deal fits directly into MasTec’s mission-critical strategy. AI and data-center expansion require power generation, grid connections, substations, electrical infrastructure, pipelines, fiber and other construction services — areas where MasTec has meaningful capabilities.

Power Delivery is already benefiting from grid modernization, electrification, system reliability spending and rising electricity needs from data centers. Meanwhile, Clean Energy and Infrastructure is seeing strong renewable demand, greater power-generation opportunities and progress on a turnkey data-center project.

Management believes its mission-critical exposure is still at an early stage, suggesting that this growth theme could extend well beyond the current year.

Raised 2026 Outlook & Estimate Revisions Support Momentum

Strong execution and the addition of Superior prompted MasTec to increase its 2026 outlook. Management now expects revenues of $18.2 billion, adjusted EBITDA of $1.6 billion and adjusted EPS of $9.30, representing growth of 27%, 39% and 42%, respectively. The earnings presentation also calls for third-quarter revenues of $4.93 billion, adjusted EBITDA of $482 million and adjusted EPS of $2.98.

The estimate trend is equally encouraging. Over the past 30 days, the Zacks Consensus Estimate for 2026 EPS has increased to $9.31 from $9.05, implying 42.1% growth. The 2027 estimate has risen to $12.67 from $12.43, suggesting another 36.1% increase. Revenues are expected to grow 27% in 2026 and 17.2% in 2027.

MTZ EPS Estimate Revision Trend

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MTZ EPS Estimate Revision Trend

Communications Weakness Remains a Key Concern The outlook is not strong across every business. Communications is the clearest weak spot. Second-quarter Communications revenues increased 6.2% to $888.9 million, but EBITDA declined 11.6% to $73.1 million and margin contracted 170 basis points to 8.2%.

MasTec has reduced its Communications expectations for the remainder of 2026. Management expects lower wireless revenues during the second half as the industry waits for equipment needed for the next spectrum deployment cycle. Wireline is also being affected by RDOF work rolling off and delayed starts for replacement projects.

Execution issues on certain projects and higher indirect fuel and equipment expenses have added pressure. MasTec now expects full-year Communications revenues of about $3.25 billion and EBITDA margins in the high single digits, roughly 100 basis points below the prior year.

Cash Flow and Acquisition-Related Leverage Need Watching

MasTec’s rapid expansion also comes with balance-sheet considerations. Long-term debt, including finance leases, stood at $2.57 billion as of June 30, 2026, up from $2.18 billion at 2025-end. Cash and cash equivalents declined to $315.6 million from $396 million over the same period. First-half operating cash flow improved to $120.3 million from $84 million a year earlier.
Yet second-quarter free cash flow remained negative at $59 million compared with negative $45 million a year earlier.

There is reason for improvement: MasTec expects 2026 operating cash flow to exceed $1 billion and year-end leverage to remain below 2X. Still, execution on cash conversion and leverage following the Superior acquisition warrants attention.

Valuation Suggests Investors Should Not Ignore the Price

MasTec currently trades at 24X forward 12-month earnings, above the industry’s 21.62X. However, the valuation is almost in line with MTZ’s five-year median of 23.91X.

MTZ Valuation (P/E F12M)

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That makes the stock neither clearly cheap nor excessively expensive relative to its own history. The premium to the industry appears partly justified by strong EPS growth, record backlog and rising exposure to AI-related infrastructure. Still, after a 25.9% YTD gain, further multiple expansion may be harder to achieve unless MasTec continues raising earnings expectations.

Analyst sentiment remains very positive. All 20 recommendations contributing to MTZ’s Average Brokerage Recommendation rate the stock a Strong Buy, resulting in an ABR of 1.00. The average Wall Street price target of $444 implies substantial upside from the latest closing price.

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MasTec Versus Key Infrastructure Peers

MasTec operates across several infrastructure markets, making Quanta Services, Inc. PWR, EMCOR Group, Inc. EME and MYR Group Inc. MYRG relevant peers. Quanta Services shares have surged 59.2% YTD, MYR Group has gained 54.4% and EMCOR has rallied 33.5%, meaning all three have outpaced MasTec’s 25.9% gain.

Valuation provides a more mixed picture. Quanta Services trades at 38.06X forward 12-month earnings, well above MasTec’s 24X multiple. MYR Group trades at 26.43X, while EMCOR trades at 24.11X. 

Thus, MasTec is substantially cheaper than Quanta Services and modestly cheaper than MYR Group, while trading almost in line with EMCOR. Quanta Services benefits from strong electric-power and grid investment, EMCOR has major exposure to data centers and high-tech facilities, and MYR Group is closely tied to transmission and distribution spending. MasTec’s broader exposure to clean energy, pipelines, communications and mission-critical construction offers diversification against these peers.

Is MasTec’s Rally Still Worth Chasing?

MasTec entered the second half of 2026 with several strong cards — record backlog, improving margins, rising earnings estimates, strong power and clean-energy markets and greater exposure to data-center and mission-critical investment through Superior. These factors provide a solid base for growth into 2027.

However, the 25.9% YTD rally has already rewarded investors for part of that improvement. Communications weakness, negative second-quarter free cash flow, higher debt following expansion and a valuation premium to the industry argue against aggressively chasing the stock at current levels.

With MasTec carrying a Zacks Rank #3 (Hold), existing investors may have enough fundamental support to stay invested, while new investors could consider waiting for a better entry point. The long-term infrastructure story remains attractive, but the current risk-reward profile supports patience rather than chasing the rally. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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