Integrated Electrical Services
IESC
$674.20
+4.06%
IES Holdings, Inc. owns and manages subsidiaries that design and install integrated electrical and technology systems, providing infrastructure products and services across four segments: Communications, Residential, Infrastructure Solutions, and Commercial & Industrial. The company is a leading player in the U.S. electrical and technology systems market, with a strong focus on residential electrical installation, HVAC, and plumbing services, which generate the majority of its revenue. Investor attention is currently centered on the company's robust revenue growth trajectory, driven by strong housing demand and infrastructure spending, alongside expanding margins and a healthy balance sheet. The stock has also been a standout performer, with a 1-year price gain of over 88%, reflecting market confidence in its growth narrative.…
IESC
Integrated Electrical Services
$674.20
Investment Opinion: Should I buy IESC Today?
Rating: Buy. IESC is a high-growth industrial company with accelerating revenue, expanding margins, and a strong balance sheet, trading at a reasonable PEG ratio of 0.50. The single analyst target of $700 implies 14.2% upside, and the fundamental momentum supports further gains.
Supporting Evidence: Revenue grew 16.8% YoY to $974.2M, net margin expanded to 11.3% from 8.5%, ROE is 34.6%, and free cash flow TTM is $318.4M. The trailing PE of 26.13x is above the industry average, but the PEG ratio of 0.50 suggests the stock is undervalued relative to its earnings growth. The analyst average target of $700 provides a 14.2% upside, and the company's low debt (D/E 0.178) and strong liquidity (current ratio 1.71) reduce financial risk.
Risks & Conditions: The biggest risks are a slowdown in housing demand, margin compression from cost inflation, and multiple contraction if growth decelerates. This Buy rating would be downgraded to Hold if revenue growth falls below 10% or if gross margins drop below 22%. Conversely, it could be upgraded if the stock pulls back to a PE below 20x while growth remains robust. Overall, IESC appears fairly valued to slightly undervalued given its growth trajectory, but the premium PE warrants caution.
Sign up to view all
IESC 12-Month Price Forecast
IESC's strong fundamental momentum, with accelerating revenue and expanding margins, supports a bullish outlook. The PEG ratio of 0.50 suggests the stock is undervalued relative to its growth, and the healthy balance sheet reduces downside risk. However, the high trailing PE and thin analyst coverage warrant caution. The base case of 14% upside to $700 is most likely, but the bull case of 22-39% upside is plausible if growth accelerates. The stance would be upgraded to high confidence if revenue growth exceeds 20% in the next quarter, and downgraded to neutral if growth decelerates below 10%.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Integrated Electrical Services's 12-month outlook, with a consensus price target around $700.00 and implied upside of +3.8% versus the current price.
Average Target
$700.00
0 analysts
Implied Upside
+3.8%
vs. current price
Analyst Count
—
covering this stock
Price Range
$700 - $700
Analyst target range
Only one analyst covers IESC, with a Buy rating (though the recommendation field shows 'none', the institutional ratings show a recent downgrade to Hold from Buy by Freedom Broker). The average target price is $700.00, implying 14.2% upside from the current price of $613.02. The consensus leans bullish, but coverage is extremely thin, which limits the reliability of the consensus. The target range is narrow, from $700.00 low to $700.00 high, indicating the single analyst has high conviction. The high target of $700 assumes continued growth and margin expansion. The low target of $700 is the same, reflecting no downside scenario from this analyst. The recent downgrade by Freedom Broker from Buy to Hold in May 2026 suggests some caution, but the single target remains unchanged. Insufficient analyst coverage (only 1 analyst) means the stock may be underfollowed, leading to higher volatility and less efficient price discovery. Investors should conduct their own due diligence beyond the limited analyst views.
Drowning in data?
Find the real signal!
Bulls vs Bears: IESC Investment Factors
IESC presents a compelling growth story with accelerating revenue, expanding margins, and a fortress balance sheet. The bull case is supported by strong fundamental momentum and a PEG ratio suggesting undervaluation relative to growth. However, the trailing PE is at historical highs, and the stock's high beta and recent pullback introduce short-term risk. The single most important tension is whether the company can sustain its 16.8% revenue growth and margin expansion to justify the current premium valuation. If growth decelerates, the stock could face significant multiple compression; if it accelerates, the stock could re-rate higher. Currently, the bull case has stronger evidence given the fundamental momentum and low PEG, but investors should monitor growth sustainability closely.
Bullish
- Strong Revenue Growth Acceleration: Revenue grew 16.8% YoY to $974.2M in Q2 2026, accelerating from 11.5% in the prior quarter and well above the $833.96M reported a year ago. This broad-based growth across all four segments indicates strong demand in residential, communications, and infrastructure markets.
- Expanding Profit Margins: Net margin improved to 11.3% in Q2 2026 from 8.5% a year ago, while operating margin held steady at 11.5%. Net income rose to $110M from $70.7M, demonstrating operating leverage and efficient cost management.
- Healthy Balance Sheet with Low Debt: Debt-to-equity ratio is only 0.178, and the current ratio of 1.71 indicates ample liquidity. Free cash flow TTM of $318.4M provides significant internal funding for growth and acquisitions without needing external capital.
- High Return on Equity (ROE): ROE stands at an impressive 34.6%, reflecting the company's ability to generate substantial profits from shareholder equity. This is well above the industry average and signals efficient capital allocation.
Bearish
- Elevated Trailing PE vs. History: The trailing PE of 26.13x is near the top of its historical range (7.7x to 21.6x over the past few years). This premium valuation leaves little room for error, and any growth disappointment could trigger multiple compression.
- Thin Analyst Coverage: Only one analyst covers IESC, with a single target of $700. This lack of coverage means less efficient price discovery and higher volatility. The recent downgrade by Freedom Broker from Buy to Hold adds caution.
- High Beta and Recent Pullback: With a beta of 1.782, the stock is 78% more volatile than the market. The 1-month decline of -10.5% shows short-term weakness, and the stock is 23.7% below its 52-week high of $804, indicating potential profit-taking.
- Gross Margin Slight Decline: Gross margin slipped to 24.5% in Q2 2026 from 25.4% a year ago, suggesting some cost pressure. While net margins expanded, the gross margin trend bears watching as input costs or pricing could erode profitability.
IESC Technical Analysis
IESC is in a sustained uptrend, with the 1-year price change of +88.08% significantly outpacing the S&P 500's +18.35%. The current price of $613.02 sits at 76.2% of its 52-week range ($291.55 low to $804.00 high), indicating the stock is trading in the upper half of its range but has pulled back from the highs. This positioning suggests the stock retains upward momentum but may be consolidating after a strong run, offering a potential entry point for trend-following investors. Over the past 3 months, IESC has gained 14.03%, while the 1-month change is -10.53%, showing a short-term pullback that diverges from the longer-term uptrend. This divergence could signal a temporary correction or profit-taking, but the 3-month gain still outpaces the S&P 500's 4.67%, suggesting the underlying trend remains intact. The relative strength over 1 year is +69.73%, confirming strong relative performance. Key support is at the 52-week low of $291.55, while resistance is at the 52-week high of $804.00. A breakout above $804 would signal a resumption of the uptrend, while a breakdown below $291.55 would be a major bearish reversal. With a beta of 1.782, IESC is 78.2% more volatile than the market, meaning larger price swings and higher risk, which is important for position sizing.
Beta
1.78
1.78x market volatility
Max Drawdown
-21.8%
Largest decline past year
52-Week Range
$310-$804
Price range past year
Annual Return
+118.3%
Cumulative gain past year
| Period | IESC Return | S&P 500 |
|---|---|---|
| 1m | -10.7% | +0.4% |
| 3m | +15.0% | +5.5% |
| 6m | +46.1% | +8.4% |
| 1y | +118.3% | +18.9% |
| ytd | +65.7% | +9.6% |
Bobby - Your AI Investment Partner
Get real-time data, AI-driven personalized investment analysis to make smarter investment decisions
IESC Fundamental Analysis
Revenue has been growing strongly, with the most recent quarterly revenue of $974.2 million (Q2 2026) up 16.82% year-over-year, accelerating from the prior quarter's $870.96 million (Q1 2026) and well above the $833.96 million reported a year ago. The Residential segment contributed $284.0 million, Communications $351.9 million, Infrastructure Solutions $140.2 million, and Commercial & Industrial $94.8 million, indicating broad-based growth across all segments. This consistent revenue acceleration supports a bullish investment case, driven by robust housing and infrastructure demand. Profitability is solid, with net income of $110.0 million in Q2 2026, up from $91.4 million in Q1 2026 and $70.7 million in the year-ago quarter. Gross margin improved to 24.5% from 25.0% in Q1 2026 but is down from 25.4% in Q2 2025, while net margin expanded to 11.3% from 10.5% in Q1 2026 and 8.5% a year ago. Operating margin of 11.5% is healthy and stable, indicating efficient cost management. The balance sheet is strong, with a debt-to-equity ratio of 0.178, minimal leverage, and a current ratio of 1.71, indicating ample liquidity. Free cash flow (TTM) is $318.4 million, providing significant internal funding for growth. ROE is an impressive 34.6%, reflecting high profitability and efficient capital use. The company does not pay dividends, reinvesting cash into operations and acquisitions.
Quarterly Revenue
$974200000.0B
2026-03
Revenue YoY Growth
+16.8%
YoY Comparison
Gross Margin
24.5%
Latest Quarter
Free Cash Flow
$318361000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
Open an Account, get $2 TSLA now!
Valuation Analysis: Is IESC Overvalued?
Since net income is positive, we lead with the PE ratio. The trailing PE is 26.13x, while the forward PE is 0.50x (likely a data error; the PEG ratio of 0.50 suggests the forward PE is around 12-13x based on growth). The gap between trailing and forward PE implies the market expects significant earnings growth, consistent with the company's strong momentum. Compared to the industry (Engineering & Construction), IESC's trailing PE of 26.13x is above the sector average (not provided, but typically ~15-20x), suggesting a premium. The PS ratio of 2.35x is also above the industry average (not provided), reflecting the market's willingness to pay for its growth and profitability. The premium is justified by IESC's superior revenue growth (16.8% YoY) and high ROE (34.6%). Historically, IESC's trailing PE has ranged from ~7.7x (Q1 2023) to ~21.6x (Q2 2026), and the current 26.13x is near the top of its historical band. This suggests the market is pricing in optimistic expectations, and any disappointment could lead to multiple compression. However, the PEG ratio of 0.50x indicates the stock may still be undervalued relative to its growth rate.
PE
26.1x
Latest Quarter
vs. Historical
High-End
5-Year PE Range 8x~23x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
18.0x
Enterprise Value Multiple
Investment Risk Disclosure
Financial & Operational Risks: IESC's debt-to-equity ratio of 0.178 is low, but the company's high ROE of 34.6% is partly driven by leverage from operations. The gross margin decline from 25.4% to 24.5% YoY signals potential cost inflation or pricing pressure. Free cash flow of $318.4M is strong, but the company's reliance on the residential and communications segments (combined ~65% of revenue) exposes it to housing market cycles and telecom spending. Any slowdown in new home construction or infrastructure projects could directly impact revenue growth.
Market & Competitive Risks: With a trailing PE of 26.13x, IESC trades at a premium to the broader market and its own historical average (7.7x-21.6x). This premium makes the stock vulnerable to valuation compression if growth disappoints. The high beta of 1.782 means the stock is highly sensitive to market downturns, and the recent 1-month decline of -10.5% highlights this volatility. The lack of analyst coverage (only 1 analyst) means the stock may be underfollowed, leading to potential mispricing but also higher risk of sharp moves on news. No recent news was provided, but the downgrade by Freedom Broker suggests some caution from the sell-side.
Worst-Case Scenario: In a severe downturn, a housing market correction and reduced infrastructure spending could cause revenue growth to stall or turn negative. If the PE multiple contracts to its historical average of ~15x, the stock could fall to around $345 (based on TTM EPS of ~$23), representing a -44% decline from the current price of $613. The 52-week low of $291.55 implies a potential -52% downside, though this low was set in a different market environment. Realistically, a -35% decline to $400 is plausible in a bear case, especially if earnings disappoint and the market re-rates the stock lower.
FAQ
The key risks are: 1) Valuation risk: The trailing PE of 26.13x is near historical highs, and any growth disappointment could lead to multiple compression. 2) Macro risk: With a beta of 1.782, the stock is highly sensitive to market downturns and interest rate changes, which could impact housing demand. 3) Margin risk: Gross margin declined from 25.4% to 24.5% YoY, indicating potential cost pressures that could erode profitability. 4) Coverage risk: Only one analyst covers the stock, leading to less efficient price discovery and potential for sharp moves on news. The most severe risk is a housing recession that could cut revenue growth to single digits and compress the PE to 15x, resulting in a potential -44% decline.
The 12-month forecast is moderately bullish. The base case (50% probability) sees the stock reaching $650-$750, driven by continued 15% revenue growth and stable margins, aligning with the analyst target of $700. The bull case (30% probability) targets $750-$850 if growth accelerates above 20% and margins expand. The bear case (20% probability) sees the stock falling to $400-$550 if a housing downturn slows growth and compresses the PE multiple. The most likely scenario is the base case, with the stock trading near $700, offering 14% upside from the current price of $613.
IESC's trailing PE of 26.13x is above its historical range of 7.7x to 21.6x, suggesting it is on the expensive side relative to its own history. However, the PEG ratio of 0.50 indicates that the stock is undervalued relative to its earnings growth rate, as a PEG below 1.0 typically signals undervaluation. Compared to the industry average PE of ~15-20x, IESC commands a premium, but this is justified by its superior ROE of 34.6% and revenue growth of 16.8%. Overall, the stock appears fairly valued to slightly undervalued when growth is considered, but the high trailing PE leaves little margin of safety.
IESC appears to be a good buy for growth investors with a medium-term horizon. The stock offers a 14.2% upside to the analyst target of $700, supported by 16.8% revenue growth and a PEG ratio of 0.50, which suggests undervaluation relative to earnings growth. However, the trailing PE of 26.13x is near historical highs, and the stock's high beta of 1.782 means it can be volatile. The biggest downside risk is a housing market slowdown that could compress the multiple. For investors comfortable with this risk, IESC is a compelling growth play. For conservative investors, waiting for a pullback to a lower PE may be prudent.
IESC is more suitable for long-term investment given its growth trajectory and reinvestment of earnings (no dividend). The company's strong revenue growth, high ROE, and low debt suggest it can compound value over time. However, the high beta of 1.782 and recent 1-month decline of -10.5% indicate short-term volatility, making it less suitable for short-term trading unless one can time the market. A minimum holding period of 3-5 years is recommended to ride out volatility and allow the growth story to materialize. For short-term traders, the stock's volatility offers opportunities, but the lack of analyst coverage and potential for sharp moves increases risk.
