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a day ago
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Can Sterling Continue to Maintain Its 29% EPS Growth in 2025?
Sterling Infrastructure, Inc. STRL has shifted its focus toward large-scale mission-critical projects, including data centers, which are proving incremental for its bottom line and revenue visibility. Supporting this strategic decision of the company is the current favorable market backdrop concerning public infrastructure demand, backed by several government initiatives, namely the Infrastructure Investment and Jobs Act (IIJA), CHIPS Act and Inflation Reduction Act (IRA). This shift toward higher-margin service offerings is boding well for STRL's margin and earnings per share (EPS) growth, as evidenced by the 29.4% year-over-year EPS growth in the first quarter of 2025, alongside its adjusted operating margin expanding 618 basis demand for data center-related projects is currently strong in the market thanks to the ongoing surge in Artificial Intelligence applications and the focus on digital transformation initiatives. STRL highlighted that the mission-critical projects hold the majority of its E-Infrastructure segment's (51% of first quarter 2025 revenue) backlog, with data center-related work accounting for more than 65%. Backed by the robust market trends, the E-Infrastructure segment's backlog grew 27% year over year to $1.2 billion as of the first quarter of 2025, with Sterling finishing the quarter with a total backlog of $2.13 Sterling's efficient project management skills and ability to complete projects on or before the deadline are acting as a catalyst toward its growth amid the favorable infrastructure spending market backdrop. Owing to these tailwinds, the company raised its 2025 adjusted EPS guidance to be in the range of $8.40-$8.90 from the previously expected range of $7.90-$8.40. The updated values reflect 18.5-25.5% year-over-year growth. The analysts' sentiments are bullish for Sterling, attributable to increased public infrastructure demand and its ability to capitalize on those opportunities, driving its backlog. For 2025, STRL's earnings estimates have trended upward in the past 60 days to $8.61 per share. The estimated figures reflect 41.2% year-over-year growth. Although the 2026 earnings estimate has been revised downward in the past 60 days to $9.48 per share, the estimated figure indicates 10.1% year-over-year growth. Image Source: Zacks Investment Research Moreover, EPS estimates for the second, third and fourth quarters indicate 35.3%, 32.5% and 43.8% year-over-year growth, respectively. The robust trend indicates that the company will be able to maintain or rather outperform its EPS growth streak for the remainder of 2025. STRL shares space with renowned market players, including EMCOR Group, Inc. EME and Quanta Services, Inc. PWR, which are also benefiting from the market backdrop of strong public infrastructure demand, especially across data centers, energy infrastructure and power grid is a Connecticut-based mechanical and electrical construction, industrial and energy infrastructure, and building services provider, which is gaining from the growing infrastructural demand across the network and communications sector. For 2025 and 2026, EMCOR's EPS estimates trended upward in the past 60 days by 0.9% to $23.59 and 0.3% to $25.47, indicating 9.6% and 8% year-over-year growth, is a Texas-based infrastructure services provider, currently benefiting from its involvement in the advancement and implementation of technology solutions throughout the entire decarbonization spectrum. For 2025 and 2026, Quanta's EPS estimates moved up in the past 60 days by 1% to $10.33 and 0.1% to $11.69, indicating 15.2% and 13.2% year-over-year growth, respectively. Shares of this Texas-based infrastructure services provider have gained 35.7% so far this year, significantly outperforming the Zacks Engineering - R and D Services industry, the broader Zacks Construction sector, and the S&P 500 index. Image Source: Zacks Investment Research STRL stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 25.32X, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, given the favorable trends backing it up. Image Source: Zacks Investment Research The stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quanta Services, Inc. (PWR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
18-06-2025
- Business
- Yahoo
Sterling Rides on E-Infrastructure Boom: What's Driving the Momentum?
Sterling Infrastructure, Inc. STRL is capitalizing on a powerful surge in e-infrastructure demand, delivering a standout first quarter in 2025. The company reported an 18% year-over-year revenue increase in its E-Infrastructure Solutions segment, with adjusted operating income surging 61% and margins expanding by more than 600 basis points to 23%. This growth is largely fueled by rising investments in AI-driven data centers, which now make up more than 65% of Sterling's e-infrastructure backlog. Strong project execution and the ability to finish mission-critical projects ahead of schedule have helped Sterling deepen relationships with large customers, reinforcing its competitive the financial front, Sterling posted adjusted earnings per share (EPS) of $1.63, up 29% year over year, and adjusted EBITDA rose 31% to $80 million. The company ended the quarter with a record $1.2 billion in e-infrastructure backlog and future-phase visibility nearing $2 billion, a milestone reflecting both demand strength and Sterling's execution capabilities. Sterling's exposure to onshoring trends, such as semiconductor and biopharma facility construction, further amplifies its growth runway. The company's phase-by-phase pricing model also minimizes risk from raw material and fuel cost fluctuations, helping preserve margins even amid ahead, management expects mid-to-high teens revenue growth for the E-Infrastructure segment in 2025, with adjusted operating margins continuing in the mid-20% range. Backed by structural trends in AI, e-commerce, and digital infrastructure, Sterling appears well-positioned to sustain its upward trajectory as the e-infrastructure boom gains speed. As Sterling rides the e-infrastructure wave, it faces competition from peers also targeting high-growth sectors like data centers, semiconductors, and transportation buildouts. Two notable players in this space are Quanta Services PWR and EMCOR Group Services, a leader in specialty contracting for power and infrastructure, has aggressively expanded into data center development and grid modernization. With deep expertise in electric power and network systems, Quanta Services is benefiting from rising AI energy needs and utility-scale connectivity, areas that overlap increasingly with Sterling's growth on the other hand, brings strong capabilities in mechanical and electrical construction, particularly in mission-critical environments like health care, semiconductor fabs, and advanced manufacturing. EMCOR's emphasis on integrated infrastructure solutions mirrors Sterling's push into turnkey E-Infrastructure Sterling boasts superior margins and backlog momentum, both Quanta Services and EMCOR offer broader national footprints and diversified customer bases, keeping competitive pressure intense in this expanding market. Sterling stock has surged 72% in the past three months, outpacing the Zacks Engineering - R and D Services industry's rise of 24.6%. Image Source: Zacks Investment Research From a valuation standpoint, Sterling is currently trading at a premium with a price-to-earnings ratio of 22.7X compared with the industry's average of 20.54X. Image Source: Zacks Investment Research The Zacks Consensus Estimate for Sterling's 2025 and 2026 EPS estimates have moved upward over the past seven days. The estimated figure indicates 40.3% and 9.7% year-over-year growth, respectively. Image Source: Zacks Investment Research STRL stock currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quanta Services, Inc. (PWR) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
17-06-2025
- Business
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Sterling Infrastructure, Inc. (STRL) Hits Fresh High: Is There Still Room to Run?
Shares of Sterling Infrastructure (STRL) have been strong performers lately, with the stock up 11.1% over the past month. The stock hit a new 52-week high of $211.99 in the previous session. The stock has an impressive record of positive earnings surprises, having beaten the Zacks Consensus Estimate in each of the last four quarters. In its last earnings report on May 5, 2025, Sterling Infrastructure reported EPS of $1.63 versus consensus estimate of $1.58 while it beat the consensus revenue estimate by 3.69%. For the current fiscal year, Sterling Infrastructure is expected to post earnings of $8.56 per share on $2.08 billion in revenues. This represents a 40.33% change in EPS on a -1.83% change in revenues. For the next fiscal year, the company is expected to earn $9.39 per share on $2.24 billion in revenues. This represents a year-over-year change of 9.66% and 7.84%, respectively. Sterling Infrastructure may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself. On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style. Sterling Infrastructure has a Value Score of C. The stock's Growth and Momentum Scores are A and D, respectively, giving the company a VGM Score of B. In terms of its value breakdown, the stock currently trades at 26.1X current fiscal year EPS estimates, which is a premium to the peer industry average of 20.3X. On a trailing cash flow basis, the stock currently trades at 24X versus its peer group's average of 11.2X. Additionally, the stock has a PEG ratio of 1.74. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective. We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Sterling Infrastructure currently has a Zacks Rank of #2 (Buy) thanks to rising earnings estimates. Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sterling Infrastructure passes the test. Thus, it seems as though Sterling Infrastructure shares could have potential in the weeks and months to come. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Sign in to access your portfolio
Yahoo
16-06-2025
- Business
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AMTM vs. STRL: Which Stock Is the Better Value Option?
Investors interested in stocks from the Engineering - R and D Services sector have probably already heard of Amentum Holdings (AMTM) and Sterling Infrastructure (STRL). But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look. We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings estimate revision trends, and our Style Scores highlight companies with specific traits. Currently, both Amentum Holdings and Sterling Infrastructure are holding a Zacks Rank of #2 (Buy). This system places an emphasis on companies that have seen positive earnings estimate revisions, so investors should feel comfortable knowing that these stocks have improving earnings outlooks. But this is only part of the picture for value investors. Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels. The Value category of the Style Scores system identifies undervalued companies by looking at a number of key metrics. These include the long-favored P/E ratio, P/S ratio, earnings yield, cash flow per share, and a variety of other fundamentals that help us determine a company's fair value. AMTM currently has a forward P/E ratio of 10.60, while STRL has a forward P/E of 23.70. We also note that AMTM has a PEG ratio of 0.82. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. STRL currently has a PEG ratio of 1.58. Another notable valuation metric for AMTM is its P/B ratio of 1.21. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. By comparison, STRL has a P/B of 7.47. These metrics, and several others, help AMTM earn a Value grade of A, while STRL has been given a Value grade of C. Both AMTM and STRL are impressive stocks with solid earnings outlooks, but based on these valuation figures, we feel that AMTM is the superior value option right now. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Amentum Holdings, Inc. (AMTM) : Free Stock Analysis Report OSI Systems, Inc. (OSIS) : Free Stock Analysis Report NVR, Inc. (NVR) : Free Stock Analysis Report DBS Group Holdings Ltd (DBSDY) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report e.l.f. Beauty (ELF) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
16-06-2025
- Business
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Sterling Infrastructure (STRL) Is a Great Choice for 'Trend' Investors, Here's Why
Most of us have heard the dictum "the trend is your friend." And this is undeniably the key to success when it comes to short-term investing or trading. But it isn't easy to ensure the sustainability of a trend and profit from it. The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock alive. Investors looking to make a profit from stocks that are currently on the move may find our "Recent Price Strength" screen pretty useful. This predefined screen comes handy in spotting stocks that are on an uptrend backed by strength in their fundamentals, and trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness. (STRL) is one of the several suitable candidates that passed through the screen. Here are the key reasons why it could be a profitable bet for "trend" investors. A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. STRL is quite a good fit in this regard, gaining 60.3% over this period. However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 7.7% over the past four weeks ensures that the trend is still in place for the stock of this civil construction company. Moreover, STRL is currently trading at 95% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout. Looking at the fundamentals, the stock currently carries a Zacks Rank #2 (Buy), which means it is in the top 20% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements. The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>> Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance. So, the price trend in STRL may not reverse anytime soon. In addition to STRL, there are several other stocks that currently pass through our "Recent Price Strength" screen. You may consider investing in them and start looking for the newest stocks that fit these criteria. This is not the only screen that could help you find your next winning stock pick. Based on your personal investing style, you may choose from over 45 Zacks Premium Screens that are strategically created to beat the market. However, keep in mind that the key to a successful stock-picking strategy is to ensure that it produced profitable results in the past. You could easily do that with the help of the Zacks Research Wizard. In addition to allowing you to backtest the effectiveness of your strategy, the program comes loaded with some of our most successful stock-picking strategies. Click here to sign up for a free trial to the Research Wizard today. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
