EMCOR GROUP, INC.

Red flags

• Fixed-price, guaranteed-maximum-price, and similar contracts expose EMCOR to losses when labor, materials, productivity, or supply-chain costs exceed estimates; the company states that it has experienced these pressures.
• Surety-bond exposure was approximately $3.03 billion at December 31, 2025, equal to 23% of total remaining performance obligations, assuming defaults on all existing covered obligations.
• Labor concentration is significant: approximately 44,000 employees, with 62% represented by unions under approximately 450 collective bargaining agreements.
• Accounts receivable rose to $4.24 billion from $3.58 billion; the allowance for credit losses was $22.8 million, leaving collection performance important in a weaker economy.
• Miller Electric represented 6.4% of 2025 revenue and 4.4% of total assets, but its controls were excluded from management’s year-end internal-control assessment.
• Goodwill increased to $1.41 billion from $1.02 billion; impairment testing depends on forecasts, with construction-segment discount rates of 10.4% and a 2.5% perpetual growth assumption.