EMCOR Group (EME) has drawn fresh attention after recent trading, with the stock last closing at $727.35. For investors, that price sits against a backdrop of steady returns over the past year.

The recent move to a share price of $727.35 follows a 16.70% 1 month share price return and a 13.89% year to date share price return. The 1 year total shareholder return of 65.87% and very large 5 year total shareholder return indicate that momentum has been present over a longer period.

If EMCOR Group has put this stock on your radar, it could be a suitable moment to look at what else is gaining traction, including aerospace and defense stocks.

With EMCOR Group trading at $727.35, an intrinsic discount of about 20% and only a small gap to the average analyst target of $772, the key question is whether there is still a buying opportunity here or the market is already pricing in future growth.

Most Popular Narrative: 4.1% Undervalued

Compared with EMCOR Group's last close at $727.35, the most followed narrative points to a fair value of $758.50, leaving a small valuation gap that hinges on a detailed earnings and margin roadmap.

Increasing demand for large-scale construction and retrofitting projects in sectors such as data centers, healthcare, and manufacturing (including onshoring and reshoring initiatives) is resulting in a record-high and diversified backlog (RPOs up 32% YoY, $11.9B), which is expected to support revenue growth over the next several years.

Want to see how that backlog, margin assumptions and a premium future earnings multiple all feed into a higher fair value than today's price? The narrative leans on steady growth in both revenue and profits, plus a specific view on how many shares will be retired and what P/E the market could be willing to pay. Curious which of those inputs does the heavy lifting in the $758.50 figure, and how sensitive that value is to even small changes in growth or margins? The full narrative breaks down the exact path.

Result: Fair Value of $758.50 (UNDERVALUED)

However, that story can change quickly if labor shortages continue to push up costs or if large, complex projects encounter execution issues that affect margins and earnings.

Build Your Own EMCOR Group Narrative

If you look at the numbers and come to a different conclusion, or simply want to test your own assumptions from scratch, you can build a complete EMCOR view in just a few minutes, starting with Do it your way.

A good starting point is our analysis highlighting 4 key rewards investors are optimistic about regarding EMCOR Group.

Looking for more investment ideas?

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.