DCF Studio

    EME · NYQ · Industrials

    EMCOR Group, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 559.82

    Market price

    USD 682.76

    Implied upside

    -18.0%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2025-12-31

    AdjustedReported capital expenditure averages just 0.56% of revenue, which is too low to be the company's real investment - property trusts and similar structures invest through lines that are not reported as capex. Capex has been set to 1.00% of revenue so the forecast is not handed free growth. Override it if the reported figure is right.

    Value Per Share

    Perpetuity growth
    USD 559.82-18.0%
    Exit multiple
    USD 781.49+14.5%
    Market price
    USD 682.76

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35
    Nominal FCFFDiscounted to todayUSD
    LineFY26FY27FY28FY29FY30FY31FY32FY33FY34FY35CAGR
    RevenueUSD 20.7bnUSD 23.6bnUSD 26.6bnUSD 29.6bnUSD 32.4bnUSD 35.1bnUSD 37.5bnUSD 39.6bnUSD 41.1bnUSD 42.1bn+8.2%
    EBITUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.3bnUSD 2.5bnUSD 2.7bnUSD 2.9bnUSD 3.0bnUSD 3.1bnUSD 3.2bn+8.2%
    NOPATUSD 1.2bnUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.1bnUSD 2.3bnUSD 2.4bnUSD 2.5bnUSD 2.5bn+8.2%
    Add depreciation & amortisationUSD 204.0mUSD 232.7mUSD 262.0mUSD 291.3mUSD 319.7mUSD 346.2mUSD 369.8mUSD 389.8mUSD 405.1mUSD 415.3m+8.2%
    Less capital expenditureUSD -207.0mUSD -234.3mUSD -261.9mUSD -288.9mUSD -314.5mUSD -337.9mUSD -358.1mUSD -374.4mUSD -386.0mUSD -392.4m+7.4%
    Capex, % of revenue1.0%1.0%1.0%1.0%1.0%1.0%1.0%0.9%0.9%0.9%-
    Less increase in working capitalUSD -692.5mUSD -542.7mUSD -555.4mUSD -553.8mUSD -536.0mUSD -500.8mUSD -447.6mUSD -377.1mUSD -290.9mUSD -191.6m-13.3%
    Free cashflow to firmUSD 553.4mUSD 880.3mUSD 1.0bnUSD 1.2bnUSD 1.4bnUSD 1.6bnUSD 1.8bnUSD 2.0bnUSD 2.2bnUSD 2.4bn+17.6%
    Discount factor0.95570.87290.79730.72820.66510.60750.55480.50680.46290.4228-
    Present valueUSD 528.8mUSD 768.4mUSD 836.5mUSD 897.4mUSD 948.7mUSD 988.3mUSD 1.0bnUSD 1.0bnUSD 1.0bnUSD 1.0bn-
    Present Value Of The ForecastUSD 9.0bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta1.105Reported 1.157, pulled toward 1.0 (Blume)
    Cost of equity9.57%Risk-free + beta x equity risk premium
    Cost of debt5.29%Risk-free + 40bp, the spread for a AAA rating at 130.5x interest cover. Book interest / average debt was lower, at 3.0%.
    Market capitalisationUSD 29.9bn98.5% of capital
    Total debtUSD 468.2m1.5% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC9.49%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 559.82

    63% of EV

    Forecast FCFF, final year
    USD 2.4bn
    Capex at depreciation, working capital in reinvestment
    USD 2.7bn
    Less reinvestment at g/ROIC (8.1% of NOPAT)
    USD -221.3m
    Capitalised
    USD 2.5bn
    ROIC (reported)
    30.9%
    Terminal value, undiscounted
    USD 36.9bn
    Terminal value, discounted
    USD 15.6bn
    Enterprise value
    USD 24.6bn
    Less net debt
    USD -643.8m
    Equity value
    USD 25.3bn

    Exit at 16.7x EBITDA

    Value per shareUSD 781.49

    74% of EV

    Terminal value, undiscounted
    USD 60.6bn
    Terminal value, discounted
    USD 25.6bn
    Enterprise value
    USD 34.6bn
    Less net debt
    USD -643.8m
    Equity value
    USD 35.3bn

    Spread between methods: 33%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    7.49%733.27768.99812.29865.73933.10
    8.49%615.93638.18664.49695.96734.15
    9.49%528.79543.14559.81579.36602.48
    10.49%461.72471.16482.01494.55509.14
    11.49%408.64414.90422.06430.26439.70

    Outlined: this model. Green text: above today's price of 682.76. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year15.3%9.5%12.4%
    EBIT margin9.2%7.6%9.2%
    Discount rate-9.5%8.3%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.