Download PDF

1. Company Snapshot

1.a. Company Description

Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States.It operates through two segments, Construction and Materials segments.The Construction segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public.


It also focuses on water-related construction for municipal agencies, commercial water suppliers, industrial facilities, and energy companies.The company also constructs various complex projects, including infrastructure/site development, mining, public safety, tunnel, solar, and power projects.The Materials segment is involved in the production of aggregates and asphalt for internal use, as well as for sale to third parties.


In addition, it offers site preparation, mining, and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services.The company serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites.Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California.

Show Full description

1.b. Last Insights on GVA

Granite Construction Incorporated's recent performance was driven by strong Q2 2025 earnings, with net income attributable to Granite totaling $72 million, or $1.42 per diluted share. The company's adjusted net income attributable to Granite was $86 million, or $1.93 per diluted share. Recent acquisitions, including Warren Paving and Papich Construction, are expected to contribute approximately $425 million in revenue annually. Additionally, the company secured several projects, including the Garnet Valley Wastewater System project and a $158 million Guam Defense System project. Zacks upgraded the stock to a Buy rating, citing growing optimism about earnings prospects.

1.c. Company Highlights

2. Granite Construction Beats Expectations with Strong Q3 Results

Granite Construction reported a robust third quarter with revenues and margins exceeding expectations. The company's Materials segment delivered an exceptional quarter with impressive growth on both the top and bottom line, while the Construction segment also had a strong quarter with gains in revenue, gross profit, and CAP. Earnings per share (EPS) came in at $2.7, beating estimates of $2.56. The company's adjusted EBITDA margin guidance was increased to a range of 11.5% to 12.5%, indicating a positive outlook for future profitability.

Publication Date: Nov -09

📋 Highlights
  • Acquisition Expansion:: Completed 5 acquisitions (Cinderlite, Waymon Roberts, Memphis, Warren, Papich) to strengthen Northern Nevada and expand Southeast footprint, boosting Contract Awarded Portfolio (CAP) to $6.3B.
  • Financial Performance:: Generated $290M operating cash flow YTD, revised annual revenue guidance to $4.35B–$4.45B, and raised adjusted EBITDA margin target to 11.5%–12.5%.
  • Margin Expansion:: Construction segment on track for 1.5% margin growth (13.5% by 2027), while Materials segment achieved 4% product margin, with potential for 3%+ further expansion via pricing and automation.
  • CapEx Efficiency:: Reduced annual CapEx guidance to $130M, reflecting integration of Warren/Papich acquisitions, and expects 8% organic revenue growth by 2026 from preconstruction contract conversions.
  • Materials Growth:: Mid-single-digit volume and mid-upper single-digit price increases in 2025, with sustained demand from data center infrastructure and Southeast market leverage from acquired operations.

Segment Performance

The Materials segment saw mid-single-digit volume increases and mid-upper single-digit price increases, driving strong performance in the quarter and full year. The Construction segment is trending ahead of expectations, with a 1.5% margin expansion to reach the midpoint of 13.5% in 2027. According to Kyle Larkin, "they see margin expansion in both Construction and Materials segments," with the Materials segment expected to see another 3% or better margin expansion through pricing, automation, and leveraging their Materials playbook.

Cash Flow and Guidance

Granite Construction generated $290 million of operating cash flow through the first 9 months of the year, with expectations to surpass the operating cash flow target of 9% of revenue for the year. The company is revising its annual revenue target to a range of $4.35 billion to $4.45 billion and expects CapEx to be approximately $130 million. Analysts estimate revenue growth at 9.9% for next year, indicating a positive outlook for the company's future performance.

Valuation Metrics

Granite Construction's current valuation metrics indicate a moderate premium, with a P/E Ratio of 23.57 and an EV/EBITDA of 15.41. The company's ROE stands at 17.26%, indicating a strong return on equity. With a Net Debt / EBITDA ratio of 2.96, the company's leverage is manageable, and its financial capacity to act on M&A opportunities is expected to continue driving cash flows and building its footprint.

3. NewsRoom

Card image cap

Stock Of The Day Nears Buy Point As This Rising Business Leads Growth

Dec -03

Source: investors.com

Card image cap

Advisors Asset Management Inc. Has $8.79 Million Stake in Granite Construction Incorporated $GVA

Nov -26

Source: defenseworld.net

Card image cap

Campbell & CO Investment Adviser LLC Decreases Stake in Granite Construction Incorporated $GVA

Nov -17

Source: defenseworld.net

Card image cap

Granite Construction Incorporated (GVA) Q3 2025 Earnings Call Transcript

Nov -06

Source: seekingalpha.com

Card image cap

Granite Reports Third Quarter 2025 Results

Nov -06

Source: businesswire.com

Card image cap

Granite Selected for I-290 Drainage Improvements Under IDOT's First CM/GC Contract

Nov -04

Source: businesswire.com

Card image cap

Granite Launches GMP 4 at Tucson International Airport, Expanding Airfield Safety Enhancement Program

Nov -03

Source: businesswire.com

Card image cap

Ethic Inc. Has $208,000 Position in Granite Construction Incorporated $GVA

Nov -01

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.81%)

6. Segments

Construction

Expected Growth: 5.8%

Granite Construction's 5.8% growth is driven by increasing infrastructure spending, rising demand for transportation and water infrastructure projects, and a strong backlog of large-scale projects. Additionally, the company's focus on sustainable construction practices and its ability to navigate supply chain disruptions have contributed to its growth momentum.

Construction Materials

Expected Growth: 5.9%

Granite Construction Incorporated's 5.9% growth in Construction Materials is driven by increasing infrastructure spending, rising demand for aggregates in road construction, and growing adoption of sustainable building materials. Additionally, strategic acquisitions and expansion into new markets have contributed to the segment's growth.

7. Detailed Products

Transportation Infrastructure

Granite Construction Incorporated provides infrastructure solutions for transportation systems, including highways, roads, bridges, and airports.

Water and Wastewater Treatment

Granite Construction Incorporated offers water and wastewater treatment solutions, including design, construction, and operation of treatment plants and distribution systems.

Mining and Industrial Services

Granite Construction Incorporated provides mining and industrial services, including mine development, infrastructure construction, and maintenance services.

Federal and Heavy Civil Construction

Granite Construction Incorporated offers federal and heavy civil construction services, including construction of military bases, dams, and other large-scale infrastructure projects.

Rail and Transit

Granite Construction Incorporated provides rail and transit solutions, including design, construction, and maintenance of rail lines, stations, and facilities.

Site Development and Management

Granite Construction Incorporated offers site development and management services, including land acquisition, entitlements, and project management.

8. Granite Construction Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Granite Construction Incorporated operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand reputation and high-quality services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Granite Construction Incorporated has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with customers and its ability to provide customized solutions help to reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Granite Construction Incorporated relies on a network of suppliers to provide materials and equipment. While the company has some bargaining power due to its size and scale, suppliers also have some bargaining power due to the specialized nature of the materials and equipment required.

Threat Of New Entrants

The construction industry has high barriers to entry, including significant capital requirements and regulatory hurdles. Additionally, Granite Construction Incorporated's strong brand reputation and established relationships with customers make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The construction industry is highly competitive, with many established players competing for market share. Granite Construction Incorporated faces intense competition from other construction companies, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.73%
Debt Cost 5.08%
Equity Weight 59.27%
Equity Cost 11.24%
WACC 8.73%
Leverage 68.71%

11. Quality Control: Granite Construction Incorporated passed 3 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

Stock-Card
Granite Construction

A-Score: 5.8/10

Value: 4.5

Growth: 7.9

Quality: 4.8

Yield: 1.0

Momentum: 8.0

Volatility: 8.7

1-Year Total Return ->

View Full Report
Stock-Card
Primoris Services

A-Score: 5.2/10

Value: 3.4

Growth: 8.6

Quality: 4.7

Yield: 0.0

Momentum: 10.0

Volatility: 4.7

1-Year Total Return ->

View Full Report
Stock-Card
Sterling Infrastructure

A-Score: 5.1/10

Value: 1.5

Growth: 8.7

Quality: 7.3

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

View Full Report
Stock-Card
Dycom Industries

A-Score: 5.0/10

Value: 2.4

Growth: 8.0

Quality: 4.9

Yield: 0.0

Momentum: 9.0

Volatility: 5.7

1-Year Total Return ->

View Full Report
Stock-Card
TopBuild

A-Score: 4.8/10

Value: 3.5

Growth: 9.0

Quality: 6.4

Yield: 0.0

Momentum: 5.0

Volatility: 5.0

1-Year Total Return ->

View Full Report
Stock-Card
Tetra Tech

A-Score: 4.3/10

Value: 3.0

Growth: 7.3

Quality: 5.5

Yield: 1.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

View Full Report

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

108.1$

Current Price

108.1$

Potential

-0.00%

Expected Cash-Flows