Key Takeaways Sterling is benefiting from strong mission-critical data center and manufacturing demand.STRL reported a $2.6B signed backlog in Q3 2025, with total potential work above $4B.Primoris raised its 2025 adjusted EPS outlook but continues to face margin pressure.The U.S. infrastructure construction landscape continues to benefit from sustained public and private investment as demand remains strong across transportation, utilities, energy infrastructure and mission-critical development. Within this ...

Group 1: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, focusing on maintaining and deepening shipping channels, land reclamation, and storm-damaged coastline restoration [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a Zacks Consensus Estimate for its current year earnings increase by 8.1% over the last 60 days [1] - Great Lakes Dredge & Dock has a PEG ratio of 1.9, which is lower than the industry average of 3.1, and possesses a Growth Score of A [2] Group 2: Primoris Services (PRIM) - Primoris Services is one of the largest specialty contractors and infrastructure companies in the United States [2] - The company also carries a Zacks Rank of 1 and has experienced a Zacks Consensus Estimate for its current year earnings increase of 9.1% over the last 60 days [2] - Primoris Services has a PEG ratio of 1.11 compared to the industry average of 3.35, and it holds a Growth Score of A [3] Group 3: Commercial Metals (CMC) - Commercial Metals manufactures, recycles, and markets steel and metal products, along with related materials and services [3] - The company has a Zacks Rank of 1 and has seen a significant increase in the Zacks Consensus Estimate for its current year earnings by 24.4% over the last 60 days [3] - Commercial Metals has a PEG ratio of 0.44, which is considerably lower than the industry average of 1.31, and it possesses a Growth Score of B [4]

Voya Investment Management, an investment management company, released its third-quarter 2025 investor letter for its “Voya MI Dynamic Small Cap Fund.” A copy of the letter can be downloaded here. It is an actively managed US Small Cap core equity strategy. Equity markets showed a strong recovery during the quarter, bouncing back from the volatility caused by tariffs in April and finishing significantly higher than mid-year levels. Growth outperformed value in the quarter, with strong results from technolog ...

Group 1 - U.S. stocks experienced a decline, with the Dow Jones falling over 200 points on Monday [1] - Paramount Skydance Corporation launched an all-cash tender offer to acquire Warner Bros. Discovery, Inc. for $30 per share, valuing the company at $108.4 billion [1] - Paramount aims to create a scaled Hollywood leader by merging with Warner Bros. [1] Group 2 - Paramount Skydance shares increased by 9.8% to $14.68 on Monday [2] - Other notable stocks that gained include Wave Life Sciences Ltd., which rose 129.1% to $17.16 after positive interim Phase 1 data for its obesity drug [4] - Structure Therapeutics Inc. saw a gain of 100.5% to $69.30 following the announcement of topline data from its clinical program for obesity treatment [4] Group 3 - Fulcrum Therapeutics, Inc. shares rose 62.3% to $14.44 after reporting initial results from its Phase 1b trial for sickle cell disease [4] - Kymera Therapeutics, Inc. gained 51.2% to $100.75 after reporting successful trial results for its KT-621 drug [4] - Confluent, Inc. shares increased by 29.2% to $29.89 after IBM agreed to acquire the company for $31 per share [4]

Core Insights - Growth investors seek stocks with above-average financial growth, but identifying such stocks can be challenging due to associated risks and volatility [1] - The Zacks Growth Style Score system simplifies the identification of promising growth stocks, with Primoris Services (PRIM) currently recommended due to its favorable Growth Score and top Zacks Rank [2] Earnings Growth - Earnings growth is crucial for investors, with double-digit growth being particularly desirable; Primoris Services has a historical EPS growth rate of 17.2% and a projected EPS growth of 41.7% this year, surpassing the industry average of 29.5% [4][5] Asset Utilization - The asset utilization ratio, or sales-to-total-assets (S/TA) ratio, is an important metric for growth stocks; Primoris Services has an S/TA ratio of 1.7, indicating it generates $1.7 in sales for every dollar in assets, compared to the industry average of 1.57 [6] Sales Growth - Sales growth is another critical factor; Primoris Services is expected to achieve a sales growth of 16.4% this year, exceeding the industry average of 12.7% [7] Earnings Estimate Revisions - Positive trends in earnings estimate revisions correlate strongly with stock price movements; Primoris Services has seen an 8.1% increase in current-year earnings estimates over the past month [8][9] Conclusion - Primoris Services has achieved a Zacks Rank 1 and a Growth Score of A, positioning it well for potential outperformance, making it an attractive option for growth investors [11]

Core Insights - Primoris Services Corporation (PRIM) is currently facing challenges in its Renewables business due to shifting project timelines, customer-driven delays, and evolving supply-chain decisions, which are affecting the pace of award activity [1] - Despite these challenges, long-term demand for utility-scale solar and battery storage remains strong, and the company's ability to maintain momentum in Renewables will depend on balancing accelerated execution with slower bookings [1] Financial Performance - In Q3 2025, the Energy segment grew by $475 million, or 47% year-over-year, primarily driven by increased activity in renewables and industrial sectors [2] - Revenues from Renewables exceeded internal expectations by over $400 million for the quarter and more than $900 million year-to-date, leading to an upward revision of the full-year revenue expectation to approximately $3 billion from a prior estimate of $2.6 billion [2] Backlog and Future Outlook - The exceptional performance in revenue has resulted in a reduction of backlog, attributed to faster-than-expected revenue burn and project signings being delayed by one or two quarters [3] - The company is optimistic about securing several high-value awards in the upcoming quarters, which could support strong performance in 2026 [3] Growth Projections - The company cautioned that Renewables revenue growth heading into 2026 is expected to be more modest, potentially lower by a couple of hundred million as project timing normalizes [4] - Sustaining momentum will depend on the speed of new bookings replenishing the backlog while project execution continues to exceed expectations [4] Stock Performance - Primoris shares have increased by 75.5% over the past six months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector, and the S&P 500 index [5] - Competitors such as MasTec, Inc. and Jacobs Solutions Inc. have seen their shares rise by 34.9% and 7.8%, respectively, in the same period [8] Valuation and Earnings Estimates - PRIM stock is currently trading at a premium compared to industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 22.9 [9] - Earnings estimates for 2025 and 2026 remain unchanged at $5.08 and $5.55 per share, indicating year-over-year growth of 31.3% and 9.3%, respectively [11]

Core Insights - The infrastructure and specialty-construction markets are experiencing growth due to robust public infrastructure spending, benefiting companies like Primoris Services Corporation (PRIM) and MasTec, Inc. (MTZ) [2] - Recent Federal Reserve rate cuts are further enhancing growth prospects for these companies, with expectations of additional cuts in the near future [3] Company Analysis: Primoris Services Corporation (PRIM) - Primoris Services is focused on cost control and disciplined capital management, capitalizing on strong demand across various sectors including power delivery and renewable energy [5][7] - The One Big Beautiful Bill Act, which includes tax incentives and significant defense spending, is expected to provide a substantial volume of projects for Primoris in the coming years [6] - For the first nine months of 2025, Primoris reported a 65.7% year-over-year increase in adjusted EPS to $4.54, with an optimistic outlook for 2025 adjusted EPS raised to $5.35-$5.55 [7] - Despite strong demand, Primoris faces margin pressures, with third-quarter 2025 margins contracting by 120 basis points to 10.8% due to various operational challenges [8] Company Analysis: MasTec, Inc. (MTZ) - MasTec is benefiting from strong activity in communications and clean energy markets, with a record backlog of $16.78 billion as of September 30, 2025, reflecting a 21.1% year-over-year increase [11] - The Pipeline Infrastructure segment has shown a revenue growth of 20% year-over-year, driven by increased spending on grid reliability and energy transition infrastructure [12] - However, MasTec is facing challenges such as project delays and fluctuations in capital spending, which have impacted revenue visibility [13][14] Stock Performance & Valuation - Over the past three months, MasTec's stock performance has outpaced that of Primoris and the broader construction sector [15] - Historically, MasTec has traded at a premium valuation compared to Primoris, with current estimates indicating a stronger growth trajectory for MasTec [16][18] - The Zacks Consensus Estimate for PRIM's 2025 EPS indicates a 31.3% year-over-year growth, while MTZ's estimate suggests a 60.8% increase [19][20][21] Investment Recommendation - While Primoris Services shows steady growth and strong demand, it is hindered by margin pressures and operational challenges [22] - MasTec, despite facing some project delays, has a stronger growth outlook and backlog strength, making it a more favorable investment option at this time [24]

Core Insights - Primoris Services Corporation (PRIM) is a specialty infrastructure contractor that is strategically positioning itself to leverage several significant market themes [1] Group 1: Market Themes - The company is expected to benefit from key market themes including Artificial Intelligence/Semiconductors, Infrastructure/Logistics/Energy Transition, Financial/Fintech, Healthcare/Biotech, and Weapons & Space [1] Group 2: Investment Strategy - The investment approach combines deep value investing principles with complex growth projections supported by quantitative research and machine learning skills [1]

Core Insights - Primoris Services Corporation (PRIM) reported a decline of 9.9% in stock price following its third-quarter 2025 financial results, underperforming compared to the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector, and the S&P 500 index [2][5] - The company's third-quarter 2025 adjusted earnings were $1.88 per share, with total revenues of $2.18 billion, exceeding the Zacks Consensus Estimate by 42.4% and 20.3% respectively, and showing year-over-year growth of 54.1% and 32.1% [3][9] - Despite revenue growth, Primoris is facing margin pressures due to challenges in renewables projects, project delays, and weather-related risks, which have affected investor sentiment regarding its near and long-term prospects [3][21] Financial Performance - Adjusted EPS for Q3 2025 increased by 54% year-over-year to $1.88, while revenues rose by 32% to $2.18 billion, driven by solid execution and demand [7][9] - Gross margin contracted by 120 basis points to 10.8%, influenced by delays in renewables projects and adverse weather conditions [7][18] - The company reduced its debt by 36% year-over-year, with operating cash flow of $327.5 million, reflecting disciplined capital management [11][12] Market Catalysts - Increased public infrastructure spending and recent Federal Reserve rate cuts are expected to enhance growth prospects for Primoris, with robust demand across various sectors including power delivery, gas operations, and renewable energy [6][20] - The passing of the One Big Beautiful Bill Act, which includes tax incentives and significant defense spending, is anticipated to benefit Primoris and its customers by increasing project volumes [7][8] Outlook - Primoris has raised its 2025 adjusted EPS outlook to a range of $5.35-$5.55, up from a previous estimate of $4.90-$5.10, indicating confidence in its growth trajectory [10] - The Zacks Consensus Estimate for 2025 and 2026 earnings suggests year-over-year growth of 31.3% and 9.3% respectively, reflecting favorable market fundamentals [13] Challenges - Margin pressures remain a significant concern, with reduced high-margin storm work and cost overruns on renewables projects impacting profitability [21] - The company's stock is trading at a premium valuation with a forward P/E ratio of 22.85, suggesting limited near-term upside potential [19][21]

Core Insights - Primoris Services Corporation (PRIM) is experiencing strong demand across various sectors, including power delivery, gas operations, communications, renewable energy, and industrial markets, driven by increased public infrastructure spending [2][3] - The company reported adjusted earnings per share (EPS) of $1.88 for Q3 2025, a 54.1% increase from $1.22 in the same quarter last year, supported by revenue growth and reduced expenses [3][8] - The One Big Beautiful Bill Act is positively impacting market trends by providing tax incentives and allocating $150 billion for defense spending, which is expected to enhance project backlogs for PRIM [3][4] Financial Performance - PRIM's consolidated revenues grew by 32.1% year over year in Q3 2025, while interest expenses decreased by 61.1% and SG&A expenses fell by 0.4% due to effective cost control measures [3][4] - The adjusted EPS outlook for 2025 has been raised to a range of $5.35-$5.55, up from the previous estimate of $4.90-$5.10, indicating confidence in sustained growth [4][8] - The Zacks Consensus Estimate indicates year-over-year earnings growth of 31.3% for 2025 and 9.3% for 2026, reflecting the company's strong market position [5][6] Market Position - PRIM's stock has increased by 12.6% over the past three months, outperforming competitors in the heavy construction industry and the broader S&P 500 index [7][8] - Competitors such as MasTec, Inc. (MTZ) and Jacobs Solutions Inc. (J) have also seen stock gains of 9.1% and 3%, respectively, indicating a competitive landscape in the public infrastructure sector [10] - PRIM is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 23.51, which is a premium compared to its peers [11][12]