Latest news with #SterlingInfrastructure
Yahoo
a day ago
- Business
- Yahoo
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
19-06-2025
- Business
- Yahoo
Sterling Expands E-Infrastructure Platform With CEC Buyout, Stock Up
Sterling Infrastructure, Inc. STRL has signed a definitive agreement to acquire CEC Facilities Group, LLC, a specialty electrical and mechanical contractor based in Irving, TX. The deal is valued at $505 million, including $450 million in cash and $55 million in Sterling Common transaction is expected to close in the third quarter of 2025, after which CEC will join the company's E-Infrastructure Solutions segment. The agreement also includes an earn-out if CEC meets certain operating income targets through Dec. 31, of this Texas-based E-Infrastructure Solutions, Building Solutions and Transportation Solutions provider gained 5.6% during yesterday's trading session and 1.2% in after-hours trading. Sterling is set to expand its E-Infrastructure capabilities through this strategic acquisition. CEC is a non-union electrical contractor with operations focused on fast-growing markets such as data centers, semiconductors and manufacturing. A majority of CEC's revenues and backlog are linked to these mission-critical sectors. The company provides end-to-end services including design, engineering, installation and maintenance for complex electrical acquisition will allow Sterling to strengthen its position across the full project lifecycle, including ongoing maintenance and upgrade work. CEC's services align well with Sterling's existing E-Infrastructure platform. The combined business is expected to benefit from cross-selling opportunities and a broader customer base. Sterling has an established presence in the data center segment, while CEC brings strength in the semiconductor market, along with coverage across Texas and other key addition of CEC also supports Sterling's financial profile. CEC has a strong growth record, with an estimated revenue CAGR of around 20% and an EBITDA margin of approximately 13% in 2025. The deal is expected to be accretive to Sterling's return on invested capital (ROIC). The company also sees scope to expand the electrical services platform further through organic growth and targeted M&A, supported by favorable market trends across CEC's core sectors. In 2025, CEC is projected to generate $390-$415 million in revenues and $51 million to $54 million in EBITDA. Estimated adjusted EPS accretion for Sterling is between 63 cents and 70 cents per diluted share. The proportion of revenue and earnings contribution from CEC to Sterling will depend on the deal's closing date. Based on current expectations, the acquisition is likely to contribute around five months of financial results in 2025. Image Source: Zacks Investment Research Shares of Sterling have gained 87.5% over the past three months, outperforming 25.5% growth in the Zacks Engineering - R and D Services industry. The company is benefiting from the E-Infrastructure segment's stability, strong backlog, inorganic growth efforts and steady bid activity in key transportation markets. Sterling currently carries a Zacks Rank #2 (Buy).Some other top-ranked stocks from the Construction sector are AECOM ACM, EMCOR Group, Inc. EME and Gibraltar Industries, Inc. presently has a Zacks Rank #2. You can see the complete list of today's Zacks #1 (Strong Buy) Rank stocks company delivered a trailing four-quarter earnings surprise of 8.9%, on average. The stock has increased 26.8% in the past year. The Zacks Consensus Estimate for AECOM's fiscal 2025 sales and EPS implies an increase of 13.9% and 5.6%, respectively, from a year currently holds a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 22.8%, on average. The stock has increased 24.8% in the past consensus estimate for EMCOR's 2025 sales and EPS implies an increase of 12.7% and 9.6%, respectively, from a year currently carries a Zacks Rank #2. The company delivered a trailing four-quarter earnings surprise of 3.1%, on average. The stock has lost 18.8% in the past Zacks Consensus Estimate for Gibraltar's 2025 sales and EPS implies an increase of 9.3% and 15.8%, respectively, from a year ago. 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 AECOM (ACM) : Free Stock Analysis Report EMCOR Group, Inc. (EME) : Free Stock Analysis Report Gibraltar Industries, Inc. (ROCK) : 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 Infrastructure to acquire CEC Facilities Group for $505m
E-infrastructure solutions specialist Sterling Infrastructure has agreed to acquire 'substantially all of the assets' of CEC Facilities Group, a US-based speciality electrical and mechanical contractor. The upfront deal consideration is $505m, with $450m payable in cash and $55m in Sterling common stock. The infrastructure services provider also highlighted an earn-out opportunity for CEC, based on the fulfilment of future operating income targets until December 2029. Engaged in non-union electrical services to mission-critical sectors, CEC will become part of Sterling's e-infrastructure solutions segment. The boards of directors of both companies have given unanimous clearance to the deal. The acquisition is slated for completion in the third quarter of 2025, contingent on standard closing conditions. Electrical services, which generated more than 80% of CEC's 2024 revenue, are primarily delivered to high-growth markets such as semiconductors, manufacturing, and data centres. This acquisition will enable Sterling to enhance its e-infrastructure services, offering a broader range of services to cover the entire project lifecycle, along with presenting significant cross-selling opportunities. Sterling aims to leverage its track record in the data centre market alongside CEC's semiconductor market presence. With CEC's operations spanning Texas and extending into other US regions, Sterling sees a 'compelling' financial profile with strong growth, margins, and cash flow. CEC's financial projections for 2025 include revenues between $390m and $415m, EBITDA between $51m and $54m, and an adjusted EPS accretion of $0.63 to $0.70 per fully diluted share. These estimates take into account the share issuance for the acquisition, the cash purchase price, a 26% tax rate, and exclude purchase-accounting adjustments. Post-acquisition, CEC's founder and chairman Ray Waddell will assume a strategic role to drive growth within Sterling's electrical services platform. CEO Daniel Williams will continue heading CEC's operations. The deal is accretive to Sterling's capital investment returns and is stated to offer a platform for organic growth and further mergers and acquisitions. Sterling CEO Joe Cutillo said: "We believe that the combination of CEC's leading mission-critical electrical services and Sterling's best-in-class site civil infrastructure services will allow us to accelerate project timelines and become even more valuable to our customers. We welcome CEC to our team and believe their strong values, commitment to customers, and entrepreneurial spirit align perfectly with Sterling." Waddell commented: "As we celebrate 16 years since founding CEC, I'm incredibly proud of what our team has built—driven by our values, our people, and a relentless pursuit of excellence. "From day one, we've reinvested in our company and in our people - believing that long-term success comes from building talent, trust, and a culture of performance. This combination with Sterling adds a valuable element to their e-Infrastructure strategy - amplifying their momentum with CEC's deep expertise in semiconductors, data centres, and mission-critical environments. The opportunities ahead are extraordinary, and we're just getting started." "Sterling Infrastructure to acquire CEC Facilities Group for $505m" was originally created and published by World Construction Network, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
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
- Yahoo
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
