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1. Company Snapshot

1.a. Company Description

Construction Partners, Inc., a civil infrastructure company, engages in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, and South Carolina.The company, through its subsidiaries, provides various products and services to public and private infrastructure projects, with a focus on highways, roads, bridges, airports, and commercial and residential developments.It also engages in manufacturing and distributing hot mix asphalt (HMA) for internal use and sales to third parties in connection with construction projects; paving activities, including the construction of roadway base layers and application of asphalt pavement; site development, including the installation of utility and drainage systems; mining aggregates, such as sand and gravel that are used as raw materials in the production of HMA; and distributing liquid asphalt cement for internal use and sales to third parties in connection with HMA production.


The company was formerly known as SunTx CPI Growth Company, Inc.and changed its name to Construction Partners, Inc.in September 2017.


Construction Partners, Inc.was incorporated in 1999 and is headquartered in Dothan, Alabama.

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1.b. Last Insights on ROAD

Construction Partners, Inc.'s recent performance has been driven by strong Q1 earnings, with revenue up 44% and adjusted net income up 99% compared to Q1 FY25. The company's record backlog of $3.09 billion and raised FY26 outlook have also contributed to positive sentiment. Additionally, institutional investors have shown confidence, with Arkadios Wealth Advisors purchasing a new position and Asset Management One Co. Ltd. increasing its holdings. Analysts have a "Moderate Buy" consensus rating, with two strong buy ratings and two buy ratings.

1.c. Company Highlights

2. Construction Partners' Q1 FY2026 Earnings: A Strong Start to the Year

Construction Partners reported a robust first quarter, with revenue increasing 44% to $809.5 million, driven by a combination of 3.5% organic growth and 40.6% acquisitive growth. Adjusted EBITDA was $112.2 million, up 63% compared to the prior year, with an adjusted EBITDA margin of 13.9%, the highest first quarter margin in the company's history. Earnings per diluted share for adjusted net income was $0.47, beating analyst estimates of $0.31. The company's net income was $17.2 million, and adjusted net income was $26.4 million.

Publication Date: Feb -08

📋 Highlights
  • Revenue Surge: Q1 revenue hit $809.5M, +44% YoY, with 3.5% organic and 40.6% acquisitive growth.
  • Adjusted EBITDA Record: Adjusted EBITDA rose 63% to $112.2M, achieving a 13.9% margin (highest Q1 margin ever).
  • Backlog Strength: Project backlog reached $3.09B, signaling sustained demand across markets.
  • Updated Fiscal 2026 Outlook: Revenue projected at $3.48B–$3.56B; adjusted EBITDA at $534M–$550M.
  • Cash Position & Leverage: $104M cash and $163M credit facility; debt-to-EBITDA to drop to 2.5x by late 2026.

Financial Performance Highlights

The company's gross profit increased 58%, and general and administrative expenses as a percentage of total revenue decreased to 7.7%. The project backlog was $3.09 billion, reflecting robust demand across markets. As Jule Smith, CEO, noted, the company has "raised its outlook for fiscal 2026, with revenue expected to be in the range of $3.48 billion to $3.56 billion, and adjusted EBITDA in the range of $534 million to $550 million."

Growth Strategy and Acquisitions

The company has been actively pursuing its growth strategy, completing three platform acquisitions last year and another in Houston earlier that week. The acquisition pipeline is described as robust, with a mix of platform deals and tuck-ins. The company expects to continue making strategic acquisitions that fit its culture and growth strategy.

Valuation and Outlook

With a P/E Ratio of 58.1 and an EV/EBITDA of 16.9, the market appears to be pricing in significant growth expectations. Analysts estimate next year's revenue growth at 10.0%. The company's ROIC is 6.95%, and ROE is 13.78%, indicating a relatively efficient use of capital. The Net Debt / EBITDA ratio is 0.07, suggesting a healthy balance sheet. As the company continues to execute on its growth strategy, investors will be watching to see if it can meet or exceed expectations.

Market Presence and Opportunities

The company has a strong presence in metropolitan areas like Houston and expects to continue investing in growth areas. The commercial market is described as steady, with potential for a stronger spring and summer. Public sector bidding is expected to increase by 10% to 15%. The company's backlog is steady, with a slight increase in public sector projects.

3. NewsRoom

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Two AI Stocks, Ralph Lauren Lead Five Stocks To Watch Near Buy Points

Feb -21

Source:

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Analyzing Obayashi (OTCMKTS:OBYCF) & Construction Partners (NASDAQ:ROAD)

Feb -20

Source: defenseworld.net

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HDLMY vs. ROAD: Which Stock Should Value Investors Buy Now?

Feb -18

Source: zacks.com

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On The Road To Riches: This Growth Stock With A Difference Tests Entry Amid 25% Rally

Feb -13

Source: investors.com

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Construction Partners, Inc. to Participate in Two Upcoming Investor Conferences

Feb -12

Source: prnewswire.com

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Construction Partners, Inc. (NASDAQ:ROAD) Receives Average Rating of “Moderate Buy” from Analysts

Feb -10

Source: defenseworld.net

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Construction Partners, Inc. (ROAD) Q1 2026 Earnings Call Transcript

Feb -05

Source: seekingalpha.com

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Construction Partners (ROAD) Q1 Earnings and Revenues Top Estimates

Feb -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (14.00%)

6. Segments

Infrastructure and Road Construction

Expected Growth: 14%

Strong demand for infrastructure development, increasing government investments in road construction, and strategic partnerships with local authorities drive the 14% growth of Infrastructure and Road Construction from Construction Partners, Inc. Additionally, the company's focus on sustainable and environmentally-friendly projects, as well as its ability to navigate complex regulatory environments, contribute to its success.

7. Detailed Products

Asphalt Paving

Construction Partners, Inc. provides high-quality asphalt paving services for roads, highways, and commercial properties.

Site Preparation

The company offers site preparation services, including land clearing, excavation, and grading, to prepare sites for construction projects.

Concrete Services

Construction Partners, Inc. provides concrete services, including concrete paving, curbs, and sidewalks, for various construction projects.

Bridge Construction

The company specializes in bridge construction, rehabilitation, and repair services for highways, roads, and local governments.

Utility Installation

Construction Partners, Inc. provides utility installation services, including water, sewer, and storm drain systems, for various construction projects.

Earthwork and Grading

The company offers earthwork and grading services, including excavation, filling, and grading, for construction projects.

8. Construction Partners, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes is low for Construction Partners, Inc. because the company's specialized services and strong relationships with clients create a high barrier to entry for potential substitutes.

Bargaining Power Of Customers

The bargaining power of customers is medium for Construction Partners, Inc. because while clients have some negotiating power, the company's reputation and expertise in the industry limit their ability to dictate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is low for Construction Partners, Inc. because the company's large scale of operations and strong relationships with suppliers give it significant negotiating power.

Threat Of New Entrants

The threat of new entrants is high for Construction Partners, Inc. because the industry is attractive and there are low barriers to entry, making it easy for new companies to enter the market.

Intensity Of Rivalry

The intensity of rivalry is medium for Construction Partners, Inc. because while there is some competition in the industry, the company's strong reputation and differentiated services help to mitigate the impact of rivalry.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 43.06%
Debt Cost 5.93%
Equity Weight 56.94%
Equity Cost 7.33%
WACC 6.73%
Leverage 75.64%

11. Quality Control: Construction Partners, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Construction Partners

A-Score: 4.4/10

Value: 1.8

Growth: 9.1

Quality: 3.9

Yield: 0.0

Momentum: 7.0

Volatility: 4.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

131.9$

Current Price

131.9$

Potential

-0.00%

Expected Cash-Flows