Operating‑expense trend
NAC G’s Q2‑2025 filing shows that total operating expenses rose modestly versus Q2‑2024, driven almost entirely by higher input costs. Labor expenses rose ≈ 4 % year‑over‑year, reflecting higher wage rates and overtime as the company ramped up staffing for a backlog of large‑scale infrastructure contracts. Equipment expenses accelerated the most, up ≈ 7 %, driven by both higher rental rates and the purchase of additional specialized machinery needed to meet tighter project schedules. Material costs—primarily steel, concrete and fuel—were up ≈ 5 %, reflecting a still‑elevated commodity price environment, though the increase was slightly muted relative to the prior year as the company secured longer‑term supply agreements that softened the price impact.
Trading implications
The upward pressure on expenses has narrowed NAC G’s operating margin by roughly 150 bps versus the prior year, but revenue growth of ~10 % more than offset the cost rise, leaving earnings per share essentially unchanged. From a fundamental perspective, the company’s ability to pass a portion of the cost increase to customers (evidenced by a modest 3 % price‑adjustment on new contracts) mitigates margin erosion. However, continued inflationary pressure on labor and equipment could become a head‑wind if the macro‑environment (e.g., wage growth in the construction sector) remains strong. Technically, the stock is trading just below its 50‑day SMA (≈ 0.5 % under) after a brief consolidation; volume has been above average (≈ 1.3 × the 20‑day average), suggesting that market participants are pricing in the expense uptick.
Actionable insight
Given the modest earnings impact and the company’s solid backlog, a neutral‑to‑slightly‑bullish stance is warranted. Traders may consider a long‑position at current levels with a tight stop (≈ 3 % below entry) to protect against any surprise escalation in input costs. Over the next 4‑6 weeks, monitor the 20‑day moving‑average cross and any forward‑looking guidance on labor‑union negotiations or material‑supply contracts; a breach above the 200‑day SMA coupled with an improving EBIT margin could trigger a short‑term upside target of 5‑7 % over the next quarter. Conversely, a miss on Q3 cost guidance should trigger a defensive sell‑stop, as higher operating expenses would compress cash flow and could pressure the stock below its 200‑day SMA.