Download PDF

1. Company Snapshot

1.a. Company Description

Sterling Infrastructure, Inc.engages in the transportation, e-infrastructure, and building solutions primarily in the Southern United States, the Northeastern and Mid-Atlantic United States, the Rocky Mountain states, California, and Hawaii.It undertakes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, water, wastewater, and storm drainage systems for the departments of transportation in various states, regional transit authorities, airport authorities, port authorities, water authorities and railroads.


The company also provides specialty site infrastructure improvement contracting services for blue-chip end users in the e-commerce, data center, distribution center and warehousing, and energy sectors.In addition, it undertakes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, and other concrete work for national home builders, regional and custom home builders, and developers and general contractors in commercial markets.The company was formerly known as Sterling Construction Company, Inc.


and changed its name to Sterling Infrastructure, Inc.in June 2022.Sterling Infrastructure, Inc.


was founded in 1955 and is headquartered in The Woodlands, Texas.

Show Full description

1.b. Last Insights on STRL

Breaking News: Sterling Infrastructure Inc reported no recent earnings release. Franklin Resources Inc. reduced its stake in Sterling Infrastructure by 6.9% in Q2, selling 1983 shares. The firm now owns 26810 shares, representing 0.09% of the construction company. No analyst recommendations were available. Franklin Resources decision to trim its holdings may indicate a shift in confidence. Other investors may be monitoring the stock. Several brokerage firms have issued ratings on the stock.

1.c. Company Highlights

2. Sterling Infrastructure's Strong Q3 Earnings Beat Expectations

Sterling Infrastructure delivered a robust third quarter, with revenue growing 32% year-over-year, driven by a 58% surge in the E-Infrastructure Solutions segment, including 42% organic growth. Adjusted earnings per share (EPS) came in at $3.48, significantly beating estimates of $2.79, representing a 58% increase. Gross profit margins expanded 280 basis points to 24.7%. The company's adjusted EBITDA reached $156 million, up 47% from the prior year. The strong financial performance was fueled by the E-Infrastructure Solutions segment, with backlog increasing 97% to $1.8 billion, or 45% excluding the CEC acquisition.

Publication Date: Nov -08

📋 Highlights
  • Revenue and EPS Growth:: Q3 revenue grew 32%, with E-Infrastructure Solutions up 58% (42% organic), while adjusted EPS surged 58% to $3.48.
  • Margin Expansion:: Gross profit margins expanded 280 bps to 24.7%, and adjusted EBITDA rose 47% to $156 million.
  • Backlog Surge:: Total backlog reached $2.6 billion (+64% YoY), with $1.8 billion in E-Infrastructure (+97% total, +45% excluding CEC) and $4 billion in combined backlog/pipeline.
  • 2025 Guidance:: Revenue growth of 27% (adjusted), 47% adjusted EPS, 42% adjusted EBITDA, with E-Infrastructure margins targeting 25% (vs. 23.7% in 2024).
  • Data Center Momentum:: Data center growth exceeded 125%, driven by larger projects, representing 75-80% of E-Infrastructure backlog ($3 billion).

Backlog and Pipeline

The company's backlog stood at $2.6 billion, a 64% year-over-year increase, with E-Infrastructure Solutions backlog driving the growth. Excluding CEC, backlog increased 34% year-over-year. The combined backlog and forward pipeline of $4 billion provides strong visibility into future growth, with $3 billion in E-Infrastructure, primarily driven by data centers, which account for 75-80% of the E-Infrastructure backlog.

Segment Performance

The Transportation Solutions segment demonstrated notable margin strength in the third quarter, driven by project selection and a diversifying portfolio. The E-Infrastructure Solutions segment is expected to deliver 30% or higher organic revenue growth in 2025, with adjusted operating profit margins approximating 25%. The Building Solutions segment is expected to remain flat in 2026, with potential improvements in the second half of the year, according to Joe Cutillo.

Valuation and Outlook

With the current price-to-earnings (P/E) ratio of 36.48 and EV/EBITDA of 25.43, the market is pricing in significant growth expectations. Analysts estimate revenue growth of 19.4% for next year. The company's strong backlog, future phase opportunities, and discussions with customers contribute to its confidence in multiyear opportunities across its markets. The return on equity (ROE) of 35.62% and return on invested capital (ROIC) of 18.94% indicate a strong ability to generate returns.

Growth Prospects

The company's focus on data centers, with growth exceeding 125% in the quarter, and its ability to take on larger projects, positions it well for future growth. The electrical distribution jobs are 2-2.5 times larger than historical jobs, with increasing complexity and infrastructure requirements, presenting opportunities for the company. The company's ability to build capacity over a year's time allows it to take on megaprojects, while maintaining its pricing and margin discipline.

3. NewsRoom

Card image cap

Can Sterling's Transportation Benefit From Federal Funding in 2026?

Dec -04

Source: zacks.com

Card image cap

Sterling Stock Surges 90% YTD: Should Investors Ride the Rally?

Dec -02

Source: zacks.com

Card image cap

Must-Buy Non-Tech Stocks for 2026 Amid AI-Driven Data Center Boom

Dec -02

Source: zacks.com

Card image cap

Franklin Resources Inc. Trims Holdings in Sterling Infrastructure, Inc. $STRL

Dec -01

Source: defenseworld.net

Card image cap

Benzinga's 'Stock Whisper' Index: 5 Stocks Investors Secretly Monitor But Don't Talk About Yet

Nov -29

Source: feeds.benzinga.com

Card image cap

Advantage Alpha Capital Partners LP Sells 20,437 Shares of Sterling Infrastructure, Inc. $STRL

Nov -28

Source: defenseworld.net

Card image cap

Advisors Asset Management Inc. Has $7.80 Million Stake in Sterling Infrastructure, Inc. $STRL

Nov -26

Source: defenseworld.net

Card image cap

Rep. Gilbert Ray Cisneros, Jr. Purchases Shares of NVIDIA Corporation (NASDAQ:NVDA)

Nov -24

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.22%)

6. Segments

E-Infrastructure Solutions

Expected Growth: 12%

Sterling Infrastructure's E-Infrastructure Solutions segment growth is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. The 12% growth rate is attributed to the rising need for efficient data management, network infrastructure upgrades, and compliance with regulatory requirements, particularly in the government and healthcare sectors.

Transportation Solutions

Expected Growth: 9%

Sterling Infrastructure's Transportation Solutions segment growth is driven by increasing government investments in infrastructure development, rising demand for road and highway construction, and growing adoption of sustainable transportation solutions. Additionally, the company's strategic acquisitions and partnerships have expanded its service offerings, contributing to the 9% growth rate.

Building Solutions

Expected Growth: 8%

Sterling Infrastructure's Building Solutions segment growth is driven by increasing demand for infrastructure development, government investments in public-private partnerships, and a strong backlog of projects. Additionally, the company's strategic acquisitions, expansion into new markets, and focus on sustainable construction practices contribute to its growth momentum.

7. Detailed Products

Heavy Civil Construction

Sterling Infrastructure provides heavy civil construction services for highways, roads, bridges, and other infrastructure projects.

Specialty Services

Sterling Infrastructure offers specialty services such as paving, concrete, and structural concrete repair.

Residential and Commercial Building

Sterling Infrastructure provides construction services for residential and commercial buildings, including apartments, offices, and retail spaces.

Water and Wastewater

Sterling Infrastructure provides construction and maintenance services for water and wastewater treatment plants, pipelines, and other water infrastructure.

Aviation

Sterling Infrastructure provides construction and maintenance services for airports, including runway construction, taxiway rehabilitation, and airport facility upgrades.

Industrial

Sterling Infrastructure provides construction and maintenance services for industrial facilities, including power plants, refineries, and manufacturing facilities.

8. Sterling Infrastructure, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sterling Infrastructure, Inc. is medium due to the availability of alternative infrastructure development companies.

Bargaining Power Of Customers

The bargaining power of customers for Sterling Infrastructure, 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 Sterling Infrastructure, Inc. is medium due to the presence of multiple suppliers and the company's moderate bargaining power.

Threat Of New Entrants

The threat of new entrants for Sterling Infrastructure, Inc. is high due to the relatively low barriers to entry in the infrastructure development industry.

Intensity Of Rivalry

The intensity of rivalry for Sterling Infrastructure, Inc. is high due to the presence of several established players in the industry and the high competition for projects.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.82%
Debt Cost 9.81%
Equity Weight 63.18%
Equity Cost 9.97%
WACC 9.91%
Leverage 58.27%

11. Quality Control: Sterling Infrastructure, Inc. passed 7 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
IES Holdings

A-Score: 5.2/10

Value: 2.2

Growth: 9.7

Quality: 7.1

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

View Full Report
Stock-Card
Comfort Systems USA

A-Score: 5.2/10

Value: 1.2

Growth: 9.8

Quality: 7.2

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

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
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

325.1$

Current Price

325.1$

Potential

-0.00%

Expected Cash-Flows