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1. Company Snapshot

1.a. Company Description

Southland Holdings, Inc.engages in specialty infrastructure construction business in North America and internationally.The company operates through two segments, Civil and Transportation.


The Civil segment designs and constructs water pipelines, pump stations, lift stations, water and wastewater treatment plants, concrete and structural steel, outfall, and tunneling.The Transportation segment designs and constructs bridges, roadways, marine, dredging, ship terminals and piers, and specialty structures and facilities.Southland Holdings, Inc.


was founded in 1900 and is headquartered in Grapevine, Texas.

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1.b. Last Insights on SLND

Southland Holdings, Inc.'s recent performance was negatively driven by lower-than-expected Q3 2024 revenue and earnings. During the earnings call, CEO Frank Renda attributed the decline to a decrease in sales of its core products, particularly in the industrial and commercial segments. Additionally, the company's operating expenses increased, partly due to higher labor costs and investments in research and development. The company's guidance for Q4 2024 was also below expectations, further contributing to the negative sentiment.

1.c. Company Highlights

2. Earnings Report Analysis: Mixed Performance and Future Outlook

The company's third-quarter revenue reached $213 million, with a gross profit of $3.3 million, reflecting a gross profit margin of 1.5%, a significant improvement from the negative 29.5% in the prior year period. Earnings per share (EPS) came in at -$0.33, missing estimates of -$0.21. Revenue was lower than anticipated due to the timing of new project starts, impacts from dispute resolutions, and project delays. The improvement in gross margin was driven by strong performance in new core work and fewer impacts from legacy projects.

Publication Date: Nov -20

📋 Highlights
  • Revenue & Gross Profit Turnaround:: Q3 revenue reached $213 million (↑ $40M YoY), gross profit surged to $3.3 million (↑ $54.4M YoY) with margin of 1.5% (vs. -29.5% in 2024).
  • Civil Segment Performance:: Civil business achieved 10.5% margin, despite $8 million noncash adjustments from dispute resolutions, with year-to-date gross margins at ~17%.
  • New Contract Wins:: Added $151 million in new awards, including a $77 million bridge rehab and $53 million water resource project, boosting backlog to $2.26 billion.
  • Cash Flow Outlook:: Expect $3 million cash collections from legacy disputes in Q4; 2026 cash flow remains positive despite potential Q4/Q1 2026 dips due to dispute resolution impacts.
  • Tunneling Competitive Edge:: Largest tunnel boring machine fleet in the US positions the company to bid on high-margin civil projects, including $50–75 million quick-turn contracts.

Segment Performance

The Civil business segment continued to perform well, achieving a gross margin of 10.5% in the quarter, despite an $8 million unfavorable non-cash adjustment from dispute resolutions. The company's new core work continues to perform at double-digit gross margins, indicating a positive trend. The Transportation segment saw significant new awards, including a $77 million bridge rehab contract, contributing to a total backlog of approximately $2.26 billion.

Cash Flow and Contract Assets

The company generated positive cash flow from operations in the quarter and year-to-date. The contract assets balance is expected to continue decreasing, with $3 million in cash collections anticipated in the fourth quarter. However, the increase in receivables may impact free cash flow in Q4 and Q1 2026. As Keith Bassano mentioned, "We did generate positive cash flow from ops in the quarter, and we're there year-to-date."

Valuation and Outlook

Analysts estimate revenue growth of 1.0% for next year. The current valuation metrics indicate a 'P/S Ratio' of 0.17 and an 'EV/EBITDA' of 71.87, suggesting that the market is pricing in limited growth. The 'ROE (%)' is -68.71, and 'ROIC (%)' is -5.19, indicating poor profitability. With a 'Net Debt / EBITDA' ratio of 43.77, the company's debt burden is significant. As Frankie S. Renda stated, "We're excited about the success we're seeing in the civil market, and we really like those $50 million to $150 million quick turn in cash projects on the civil side."

Future Prospects

The company is optimistic about its core work in 2027, following a reset year in 2025 where it cleaned up legacy projects. The data center market presents a significant opportunity, with potential project sizes ranging from $15 million to $75 million. The company's competitive edge in tunnel boring machines and fleet is expected to drive growth in the civil segment.

3. NewsRoom

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Southland Holdings, Inc. (SLND) Q3 2025 Earnings Call Transcript

Nov -13

Source: seekingalpha.com

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Southland Holdings (SLND) Reports Q3 Loss, Misses Revenue Estimates

Nov -12

Source: zacks.com

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Southland Awarded Projects Totaling $130 Million

Sep -30

Source: businesswire.com

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Southland Holdings, Inc. (SLND) Q2 2025 Earnings Call Transcript

Aug -13

Source: seekingalpha.com

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Southland Holdings (SLND) Reports Q2 Loss, Lags Revenue Estimates

Aug -12

Source: zacks.com

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Southland Holdings, Inc. (SLND) Q1 2025 Earnings Call Transcript

May -14

Source: seekingalpha.com

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Southland Appoints Donald Graul as Chief Strategy Officer

May -14

Source: businesswire.com

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Southland Holdings (SLND) Reports Q1 Loss, Tops Revenue Estimates

May -13

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (3.79%)

6. Segments

Transportation

Expected Growth: 3.5%

Southland Holdings, Inc.'s 3.5% growth in Transportation is driven by increasing demand for infrastructure development, government investments in highway construction, and rising adoption of sustainable transportation solutions. Additionally, the company's strategic expansion into emerging markets and focus on operational efficiency have contributed to its growth momentum.

Civil

Expected Growth: 4.5%

Civil segment of Southland Holdings, Inc. exhibits 4.5% growth driven by increasing infrastructure spending, government-backed projects, and rising demand for sustainable construction practices. Additionally, strategic acquisitions and partnerships have expanded the company's service offerings, further fueling growth.

7. Detailed Products

Heavy Civil Construction

Southland Holdings provides heavy civil construction services, including highway construction, bridge building, and infrastructure development.

Industrial Construction

Southland Holdings offers industrial construction services, including plant construction, equipment installation, and process piping.

Commercial Construction

Southland Holdings provides commercial construction services, including office building construction, retail development, and hospitality construction.

Disaster Response and Recovery

Southland Holdings offers disaster response and recovery services, including debris removal, infrastructure repair, and temporary housing.

Environmental Remediation

Southland Holdings provides environmental remediation services, including hazardous waste removal, soil remediation, and groundwater treatment.

Design-Build Services

Southland Holdings offers design-build services, including project planning, design, and construction.

8. Southland Holdings, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Southland Holdings, Inc. is medium due to the availability of alternative construction services and products.

Bargaining Power Of Customers

The bargaining power of customers for Southland Holdings, Inc. is low due to the company's strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Southland Holdings, Inc. is medium due to the moderate level of supplier concentration and the availability of alternative suppliers.

Threat Of New Entrants

The threat of new entrants for Southland Holdings, Inc. is high due to the relatively low barriers to entry in the construction industry and the attractiveness of the market.

Intensity Of Rivalry

The intensity of rivalry for Southland Holdings, Inc. is high due to the high level of competition in the construction industry and the presence of several established players.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 56.15%
Debt Cost 4.03%
Equity Weight 43.85%
Equity Cost 4.03%
WACC 4.03%
Leverage 128.07%

11. Quality Control: Southland Holdings, Inc. passed 4 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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Bowman Consulting Group

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Value: 2.6

Growth: 7.0

Quality: 4.9

Yield: 0.0

Momentum: 9.5

Volatility: 5.0

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Great Lakes Dredge & Dock

A-Score: 4.5/10

Value: 6.8

Growth: 4.1

Quality: 4.5

Yield: 0.0

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Volatility: 5.3

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Southland Holdings

A-Score: 4.2/10

Value: 8.0

Growth: 2.8

Quality: 3.5

Yield: 0.0

Momentum: 7.5

Volatility: 3.3

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A-Score: 3.9/10

Value: 5.0

Growth: 7.2

Quality: 3.9

Yield: 0.0

Momentum: 6.0

Volatility: 1.0

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Blink Charging

A-Score: 3.6/10

Value: 7.6

Growth: 5.0

Quality: 3.7

Yield: 0.0

Momentum: 4.0

Volatility: 1.0

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INNOVATE

A-Score: 2.8/10

Value: 7.0

Growth: 2.3

Quality: 3.6

Yield: 0.0

Momentum: 3.5

Volatility: 0.3

1-Year Total Return ->

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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

3.32$

Current Price

3.32$

Potential

-0.00%

Expected Cash-Flows