Core Viewpoint - Momentum investing focuses on following a stock's recent price trends, aiming to buy high and sell higher, with the expectation that established trends will continue [1] Company Overview: Dycom Industries (DY) - Dycom Industries currently holds a Momentum Style Score of B, indicating a positive outlook based on its price change and earnings estimate revisions [2] - The company has a Zacks Rank of 2 (Buy), suggesting strong potential for outperformance in the market [3] Price Performance - Over the past week, DY shares have increased by 6.63%, significantly outperforming the Zacks Building Products - Heavy Construction industry, which rose by 0.68% [5] - In a longer timeframe, DY's shares have appreciated by 15.35% over the past month, compared to the industry's 3.35% [5] - Over the last quarter, DY shares have risen by 13.49%, and over the past year, they have gained 50.07%, while the S&P 500 has only increased by 7.36% and 19.22%, respectively [6] Trading Volume - DY's average 20-day trading volume is 396,922 shares, which serves as a baseline for price-to-volume analysis; a rising stock with above-average volume is generally seen as bullish [7] Earnings Outlook - In the past two months, four earnings estimates for DY have been revised upwards, with no downward revisions, leading to an increase in the consensus estimate from $9.52 to $10.01 [9] - For the next fiscal year, four estimates have also moved higher, indicating a positive trend in earnings expectations [9] Conclusion - Considering the positive price momentum and favorable earnings outlook, DY is positioned as a 2 (Buy) stock with a Momentum Score of B, making it a strong candidate for near-term investment [11]

Core Viewpoint - Dycom Industries has shown strong stock performance, with a 13.9% increase over the past month and a 65.1% rise since the beginning of the year, outperforming both the Zacks Construction sector and the Zacks Building Products - Heavy Construction industry [1] Financial Performance - The company has consistently exceeded earnings expectations, reporting an EPS of $3.33 against a consensus estimate of $2.86 in its last earnings report [2] - For the current fiscal year, Dycom Industries is projected to achieve earnings of $10.01 per share on revenues of $5.31 billion, with a year-over-year earnings growth of 10.34% [3] - The next fiscal year is expected to see earnings of $11.05 per share on revenues of $5.69 billion, reflecting a year-over-year change of 7.28% [3] Valuation Metrics - Dycom Industries trades at a valuation of 28.7 times the current fiscal year EPS estimates, which is above the peer industry average of 25.5 times [7] - The trailing cash flow basis shows a trading multiple of 19.1 times compared to the peer group's average of 16.5 times [7] - The stock has a PEG ratio of 1.37, indicating it is not among the top value stocks [7] Zacks Rank and Style Scores - Dycom Industries holds a Zacks Rank of 2 (Buy), supported by favorable earnings estimate revisions from analysts [8] - The company has a Value Score of C, a Growth Score of B, and a Momentum Score of C, resulting in a combined VGM Score of B [6][9]

Core Idea - The article emphasizes the investment philosophy of Thomas W. Phelps, particularly his book "100 to 1 in the Stock Market," which advocates for buying exceptional companies early, holding them with discipline, and allowing compounding to generate wealth [1][4][6]. Phelps's Investment Framework - Phelps's framework focuses on identifying companies with durable advantages, such as network effects, proprietary know-how, and advantageous cost structures [8]. - The importance of verifying a large addressable market that allows for long-term compounding without hitting a wall is highlighted [8]. - Present-tense profitability is essential; Phelps preferred companies that generate cash rather than speculative ventures [8]. - The article suggests buying companies when their narratives are still forming, favoring modest valuations over those priced for perfection [8]. - A strategy of doing less is recommended, as holding onto winning investments can lead to tax deferral and reduced errors [8]. Current Investment Candidates - The article lists 25 companies that fit Phelps's criteria, categorized by how they create competitive advantages rather than by index labels [9]. - Companies in the construction and infrastructure sector, such as EMCOR Group and Quanta Services, are noted for their execution capabilities and ability to convert backlog into cash [10][11]. - Precision manufacturers like Celestica and Fabrinet are recognized for their high returns on capital and asset-light models [12]. - In network infrastructure, Arista Networks and Super Micro Computer are highlighted for their strong positions in high-speed switching and AI hardware, respectively [13]. - Companies in the materials sector, such as Martin Marietta Materials, are noted for their pricing power and local monopolies [14]. - Engineering firms like WSP Global are recognized for their expertise and customer relationships in regulated markets [15]. - Consumer brands like e.l.f. Beauty and Academy Sports are mentioned for their market share growth and operational efficiency [16]. - Specialty finance companies like FirstCash and software firms like Agilysys are noted for their cash generation and growth potential [17]. - Internationally, utilities like Sabesp and fintechs like StoneCo are highlighted for their governance and profitability improvements [18]. - UK companies like Spectris and Halma are recognized for their consistent acquisition strategies and operational excellence [19]. Conclusion - The article concludes that the focus should be on finding real engines of growth and sizing investments appropriately to endure market volatility, allowing time to enhance value [22].

Group 1 - Dycom Industries (DY) is a notable stock within the Construction group, which consists of 88 companies, currently ranked 14 in the Zacks Sector Rank [2][3] - The Zacks Rank system indicates that Dycom Industries has a Zacks Rank of 2 (Buy), with a 4.2% increase in the consensus earnings estimate for the full year over the past quarter, reflecting improved analyst sentiment [3] - Year-to-date, Dycom Industries has achieved a return of approximately 48.1%, significantly outperforming the Construction sector's average return of 7% [4] Group 2 - Dycom Industries is part of the Building Products - Heavy Construction industry, which ranks 4 in the Zacks Industry Rank, with an average gain of 34.5% this year, indicating that DY is performing well compared to its peers [6] - Another outperforming stock in the Construction sector is Sterling Infrastructure (STRL), which has seen a year-to-date increase of 86.1% and has a Zacks Rank of 1 (Strong Buy) [4][5] - The Engineering - R and D Services industry, to which Sterling Infrastructure belongs, is currently ranked 95, with a year-to-date return of 12.3% [7]

Company Overview - The company is a premier digital infrastructure solutions provider operating across all 50 states [1] - It specializes in engineering, construction, service, and maintenance of both wireline and wireless telecommunication services [1] - The company is increasingly focusing on connecting the grid nationwide through long-haul and middle mile networks, particularly for hyperscalers [1] Industry Context - The telecommunications space is currently very busy, indicating a high level of activity and demand within the industry [1]

Company Overview - The company is a premier digital infrastructure solutions provider operating across all 50 states [1] - It specializes in engineering, construction, service, and maintenance of both wireline and wireless telecommunication services [1] - The company is increasingly focusing on connecting the grid nationwide through long-haul and middle mile networks, particularly for hyperscalers [1] Industry Context - The telecommunications space is currently very busy, indicating a high demand for digital infrastructure solutions [1]

Summary of Dycom Industries Conference Call Company Overview - Dycom Industries is a premier digital infrastructure solutions provider operating across all 50 states, focusing on engineering, construction, service, and maintenance of wireline and wireless telecommunication services [9][12][10]. Industry Dynamics - The telecommunications industry is experiencing significant consolidation, with major customers either undergoing or completing acquisitions, which is expected to lead to increased capital investment in new markets [12][13]. - The fiber-to-the-home builds are well underway, with a commitment from customers to cover approximately 80% of addressable homes in the U.S. with fiber [14][15]. Financial Trajectory - Dycom Industries anticipates substantial growth opportunities, projecting a revenue outlook of approximately $5.3 billion for the current year, up from $3.1 billion four years ago [16][19]. - The company sees a $20 billion opportunity in the next five years related to AI-driven data center connectivity and infrastructure [32][34]. Labor Strategy - The company emphasizes the importance of a skilled labor force to support growth, focusing on attracting and training talent from entry-level to management positions [16][19][18]. Services and Maintenance - Over 50% of Dycom's business comes from services and maintenance, which is a highly capital-intensive and complex area, providing a recurring revenue stream [20][22]. - The company aims to leverage its service capabilities as it expands its fiber-to-the-home and data center services [24][25]. AI and Data Center Connectivity - Dycom is actively engaged in discussions with hyperscalers regarding the need for enhanced fiber connectivity to data centers, driven by aging infrastructure and increasing demand for capacity [30][31]. - The company is positioned to capitalize on the growing need for data center connectivity, with significant opportunities in both inside-the-fence and long-haul connections [37][39]. BEAD Program - Dycom anticipates revenue opportunities from the Broadband Equity, Access, and Deployment (BEAD) program, with expectations of significant fiber deployment in the coming years [49][52]. - The company has been in discussions with state broadband agencies and existing customers to quickly leverage contracts for new market opportunities [50][51]. Financial Performance and Outlook - Dycom has shown strong financial performance, with a revenue growth of over 14.5% and margin improvements [58][59]. - The company is focused on capital allocation strategies, including potential M&A opportunities to enhance growth and operational efficiency [62][63]. Key Takeaways - Dycom Industries is well-positioned for growth in the telecommunications sector, with a unique solution set and a strong presence across the U.S. [70][71]. - The company is gearing up for significant future demand driven by fiber-to-the-home initiatives, AI data center needs, and ongoing service and maintenance contracts [72].

Core Insights - Great Lakes Dredge & Dock (GLDD) is currently rated as a Strong Buy (1) by Zacks, while Dycom Industries (DY) holds a Hold (3) rating, indicating a more favorable earnings estimate revision for GLDD [3] - Value investors typically assess various traditional metrics to identify undervalued stocks, including P/E ratio, P/S ratio, earnings yield, and cash flow per share [4] Valuation Metrics - GLDD has a forward P/E ratio of 11.62, significantly lower than DY's forward P/E of 25.53, suggesting GLDD may be undervalued [5] - The PEG ratio for GLDD is 0.97, while DY's PEG ratio is 1.22, indicating that GLDD's expected earnings growth is more favorable relative to its price [5] - GLDD's P/B ratio stands at 1.66, compared to DY's P/B of 5.33, further supporting the notion that GLDD is a more attractive investment option [6] - Overall, GLDD has a Value grade of A, while DY has a Value grade of C, reinforcing the conclusion that GLDD is the better choice for value investors at this time [6]

Company Overview - Dycom is a premier digital infrastructure services provider operating in all 50 states across the U.S. [1] - The company specializes in wireline and wireless telecommunications construction, serving large carriers such as AT&T, Lumen, and Verizon, as well as cable customers [1] - Dycom is also involved in hyperscaler and long-haul builds, which are increasingly relevant due to the AI evolution [1] Service and Maintenance - A significant portion of Dycom's work involves service and maintenance, which is a continuous effort that occurs year-over-year [2]

Summary of Dycom Industries (DY) 2025 Conference Call Company Overview - Dycom Industries is a premier digital infrastructure services provider operating in all 50 states in the US, focusing on wireline and wireless telecommunications construction. The company serves large carriers such as AT&T, Lumen, and Verizon, as well as cable customers and hyperscaler long-haul builds related to AI evolution [5][6] Key Points and Arguments Fiber to the Home Builds - Dycom has seen significant growth in fiber to the home builds, with customers collectively adding 50 million incremental passings over the last 16 months, bringing the total to approximately 125 million homes expected to be passed [7][8][9] - Industry estimates suggest that about 10 million homes were passed last year, indicating substantial growth potential over the next five years [11][12] - The complexity of these projects means that many builds will extend beyond 2030, with various customers at different paces [13][14][15] Maintenance and Service Business - Service and maintenance work is a priority for Dycom, constituting over 50% of the business, which helps build long-term relationships with customers [19][20] - The locating business, part of the maintenance segment, typically accounts for 6% to 7% of revenue and has shown growth due to customer demand for certainty and long-term relationships [21][22] Data Center Opportunities - Dycom has identified a $20 billion Total Addressable Market (TAM) for data center work over the next five years, driven by AI and hyperscaler demands [25][26] - The complexity of long-haul and middle-mile networks is significantly higher than fiber to the home, requiring extensive project management and coordination [30][31] - The company expects significant revenue opportunities to ramp up in 2027, with ongoing projects already in progress [35] BEAD Program - Dycom is optimistic about the BEAD program, which is expected to favor larger carrier customers, providing opportunities for revenue as early as Q2 next year [51][52] - The company has been in discussions with states and customers regarding prospective builds, indicating a positive outlook for fiber deployment [53][54] Labor and Workforce - Dycom emphasizes its ability to attract, train, and retain a dispersed workforce, which is crucial for meeting the demands of upcoming projects [60][61] - The company has shown organic growth of over 20% in workforce size, indicating strong operational capabilities [62] Equipment and Supply Chain - Dycom maintains strong relationships with equipment suppliers, ensuring that labor and equipment do not hinder project timelines [67][68] - The company has been proactive in managing its supply chain to meet growth demands [69] Margin Improvement and Cost Management - Dycom has focused on improving margins and cash flow, with operating leverage contributing to recent margin increases [70][71] - The company is leveraging data analytics and AI to enhance efficiency and quality, which is expected to further improve margins [76][78] Competitive Landscape - Dycom differentiates itself through its commitment to raising customer expectations and delivering certainty, which has resulted in continued growth and new market awards [79][81] Future Outlook - The company is optimistic about the upcoming year, with significant growth opportunities in fiber to the home, data centers, and BEAD projects [84][90] - Dycom plans to provide a revenue outlook for the upcoming year as it approaches [85] Additional Important Points - Dycom's strategy includes a focus on long-term relationships with customers and a commitment to safety and quality in operations [72][73] - The company is actively working on integrating AI into its operations to enhance project management and efficiency [76][78]