Financial Data and Key Metrics Changes - Construction Partners reported a revenue of $2.812 billion for fiscal 2025, representing a 54% increase compared to the previous year, with 8.4% organic growth and 45.6% acquisitive growth [15][16] - Adjusted EBITDA for fiscal 2025 was $423.7 million, a 92% increase year-over-year, with an adjusted EBITDA margin of 15% compared to 12.1% in fiscal 2024 [16] - Net income reached $101.8 million, up 48% from the previous year, while adjusted net income increased by 73% to $122 million [16] Business Line Data and Key Metrics Changes - The fourth quarter of fiscal 2025 saw revenue of $900 million, a 67% increase year-over-year, with 10.4% of that being organic revenue growth [15] - General and administrative expenses as a percentage of total revenue decreased to 7.1% from 8.1% in the previous year [16] Market Data and Key Metrics Changes - The company ended fiscal 2025 with a record project backlog of $3 billion, covering approximately 80%-85% of the next 12 months' contract revenue [19] - The company expects contract awards in FY2026 to increase approximately 15% over FY2025, driven by strong public contract bidding across its operational states [11][12] Company Strategy and Development Direction - The company has initiated a five-year strategic plan called Road 2030, aiming to double its revenue to over $6 billion by 2030, with a target of expanding EBITDA margins to 17% by the end of the period [9] - The growth strategy focuses on acquisitions in the Sunbelt region, leveraging the ongoing generational transition in the industry to identify potential acquisition targets [12][14] Management's Comments on Operating Environment and Future Outlook - Management highlighted four macro trends driving growth: migration to the Sunbelt, reshoring of manufacturing, increased infrastructure funding, and a fragmented industry ripe for consolidation [10][11] - The company remains focused on attracting and retaining talent, emphasizing the importance of its workforce in driving business growth and shareholder value [14] Other Important Information - The company expects total capital expenditures for fiscal 2026 to be in the range of $165 million-$185 million, with a focus on high-return growth initiatives [18] - Cash flow from operations for fiscal 2025 was $291 million, up from $209 million in fiscal 2024, with expectations to convert 75%-85% of EBITDA to cash flow from operations in fiscal 2026 [17][18] Q&A Session Summary Question: Integration of recent acquisitions and differences from five years ago - Management noted that the integration process has improved significantly, with a focus on cultural fit and involving employees from across the company in the integration teams [24][26] Question: Impact of government shutdown on business - Management confirmed that the government shutdown did not significantly impact revenue or bidding due to the funding structure through the Highway Trust Fund [30] Question: Confidence in reauthorization bill voting timeline - Management expressed optimism about the reauthorization bill, indicating that both chambers are working on it and aiming for a vote by spring [38] Question: Expected rollover M&A revenue and its impact on margins - Management projected that 2025 acquisitions would contribute approximately $240 million-$250 million in revenue, with a neutral impact on margins [40] Question: Pricing and inflation outlook for fiscal 2026 - Management indicated that inflation was benign in 2025, with stable construction material costs, and they expect to pass through any increased costs in their pricing [56][57] Question: Demand for private construction and data center projects - Management reported healthy demand for private construction, particularly in the Sunbelt, and confirmed participation in large data center projects [66][68]

Core Viewpoint - Construction Partners reported quarterly earnings of $1.07 per share, missing the Zacks Consensus Estimate of $1.11 per share, but showing an increase from $0.58 per share a year ago, indicating a year-over-year growth despite the earnings miss [1][2] Financial Performance - The company posted revenues of $899.85 million for the quarter ended September 2025, which was 0.79% below the Zacks Consensus Estimate, but up from $538.16 million in the same quarter last year [2] - Over the last four quarters, Construction Partners has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Stock Performance - Construction Partners shares have increased by approximately 17.8% since the beginning of the year, outperforming the S&P 500's gain of 12.9% [3] Future Outlook - The company's earnings outlook will be crucial for investors, with current consensus EPS estimates at $0.47 for the coming quarter and $2.94 for the current fiscal year, with expected revenues of $715 million and $3.3 billion respectively [7] - The Zacks Rank for Construction Partners is currently 3 (Hold), indicating expected performance in line with the market in the near future [6] Industry Context - The Building Products - Miscellaneous industry, to which Construction Partners belongs, is currently ranked in the bottom 38% of over 250 Zacks industries, suggesting potential challenges ahead [8]

Core Points - The article emphasizes the importance of enabling Javascript and cookies in browsers to prevent access issues [1] - It highlights that users with ad-blockers may face restrictions when trying to access content [1] Summary by Categories Technical Requirements - Users are advised to enable Javascript and cookies in their browsers to ensure proper functionality [1] - The presence of ad-blockers can lead to being blocked from accessing certain content [1]

Core Viewpoint - Generating cash is crucial for businesses, but effective allocation of cash flow is essential for long-term success. Some companies may produce significant cash but fail to utilize it effectively, leading to missed opportunities. StockStory identifies companies that reinvest wisely and highlights one strong investment opportunity alongside two companies facing challenges. Group 1: Companies to Sell - Kraft Heinz (KHC) has a trailing 12-month free cash flow margin of 14.4% and is currently trading at $23.90 per share, with a forward P/E ratio of 9.7x [2][4] - Donaldson (DCI) has a trailing 12-month free cash flow margin of 9.3% and is priced at $85.90, reflecting a forward P/E ratio of 21.5x [5][7] Group 2: Concerns for Kraft Heinz (KHC) - The company has struggled with falling unit sales over the past two years, relying on price increases [9] - Operating expenses have increased relative to revenue, resulting in a 34.6 percentage point decline in operating margin [9] - A return on capital of only 1.2% indicates management's challenges in finding profitable growth opportunities [9] Group 3: Concerns for Donaldson (DCI) - The absence of organic revenue growth over the past two years suggests a reliance on acquisitions for expansion [10] - Estimated sales growth of 3.2% for the next 12 months indicates weaker demand [10] - A decline of 2.8 percentage points in free cash flow margin over the last five years reflects increased investments to maintain market position [10] Group 4: Company to Buy - Construction Partners (ROAD) has a trailing 12-month free cash flow margin of 6.9% and is positioned for growth [8] - Projected revenue growth of 33.2% over the next 12 months suggests an acceleration in demand [11] - The company has demonstrated strong profitability with an annual earnings per share growth of 70.6%, outpacing revenue gains [11] - Free cash flow margin has increased by 5.1 percentage points over the last five years, providing more resources for investment [11]

Core Insights - The focus is on analyzing diverse businesses, particularly in the technology, industrial, and conglomerate sectors, emphasizing the importance of strong foundational companies for long-term success [1] Group 1: Company Analysis - Companies with strong foundations are favored for their potential to perform well over time, indicating a preference for stability and growth in investment choices [1] - The analysis includes a combination of financial examination and narrative writing to provide insights into company performance and market understanding [1] Group 2: Research Approach - The approach involves a dual focus on quantitative financial data and qualitative storytelling to enhance comprehension of the financial landscape [1]

Company Performance - Persimmon Plc (PSMMY) has gained approximately 13.2% year-to-date, outperforming the average gain of 3.8% in the Construction sector [4] - The Zacks Consensus Estimate for PSMMY's full-year earnings has increased by 2.3% over the past quarter, indicating improved analyst sentiment and a more positive earnings outlook [3] Industry Context - Persimmon Plc is part of the Building Products - Home Builders industry, which includes 17 stocks and currently ranks 210 in the Zacks Industry Rank. This industry has experienced an average loss of 2.4% year-to-date, highlighting Persimmon's relative strength [5] - Another notable stock in the Construction sector is Construction Partners (ROAD), which has returned 35.1% year-to-date and belongs to the Building Products - Miscellaneous industry, currently ranked 152 [4][6]

Group 1: Skillsoft Corp. (SKIL) - Skillsoft is an instructor-led training services company with a Zacks Rank 1 [1] - The Zacks Consensus Estimate for its current year earnings has increased by 240.9% over the last 60 days [1] - The company has a PEG ratio of 0.51, compared to 0.96 for the industry, and possesses a Growth Score of B [1] Group 2: Construction Partners, Inc. (ROAD) - Construction Partners is a civil infrastructure company with a Zacks Rank 1 [2] - The Zacks Consensus Estimate for its next year earnings has increased nearly 2% over the last 60 days [2] - The company has a PEG ratio of 1.03, compared to 1.71 for the industry, and possesses a Growth Score of B [2] Group 3: Ultrapar Participaçoes S.A. (UGP) - Ultrapar is a distributor of liquefied petroleum gas, gasoline, ethanol, diesel, fuel oil, and kerosene with a Zacks Rank 1 [3] - The Zacks Consensus Estimate for its current year earnings has increased by 33.3% over the last 60 days [3] - The company has a PEG ratio of 1.97, compared to 2.56 for the industry, and possesses a Growth Score of A [3]

Group 1 - Construction Partners is hosting its second Analyst Day in 2025, indicating the company's commitment to engaging with analysts and stakeholders [1] - The event is taking place in Raleigh, showcasing the company's efforts to connect with both in-person and virtual attendees [2] Group 2 - A live stream of the event is available on the company's website, with plans to archive the webcast for future access [2] - A PDF of the presentation will be posted on the website after the event, ensuring that information is accessible to a wider audience [2]

Group 1 - The article does not provide any specific information or insights regarding a company or industry [1]

Summary of Construction Partners (NasdaqGS:ROAD) 2025 Investor Day Company Overview - **Company**: Construction Partners, Inc. (CPI) - **Industry**: Asphalt and Infrastructure Services - **Event Date**: October 22, 2025 Key Points and Arguments Market Position and Strategy - The asphalt market is large, growing, and highly fragmented, presenting opportunities for consolidation [5][6] - CPI aims to expand its market share through strategic acquisitions and organic growth, particularly in the Sun Belt region, which is growing five times faster than the national average [11][12] - The company has a long-term focus on infrastructure services, with a recurring revenue model based on road maintenance [9][10] Growth Metrics - CPI reported a **54% revenue increase** year-over-year, reaching approximately **$1.6 billion** in revenue for the fiscal year ending October 2023 [21][50] - The company aims for annual growth of **15-20%**, targeting revenues between **$2.7 billion and $3.2 billion** by 2027 [21] - CPI's EBITDA margins are expected to expand from **11%** to between **13% and 14%** by 2027 [22] Road 2030 Plan - The "Road 2030" plan outlines a five-year strategy to achieve over **$6 billion** in revenue and **$1 billion** in EBITDA by 2030 [42][45] - The plan includes a combination of organic growth and acquisitions, with no new state entries planned, focusing on existing operations in eight states [55] - CPI has added **53 new facilities** and **three new platform companies** in Texas, Oklahoma, and Tennessee since 2023 [26] Infrastructure Investment - The company anticipates continued federal and state investment in infrastructure, particularly through the Surface Transportation Program, which is expected to be reauthorized at higher funding levels [30][31] - CPI is positioned as a major consolidator in the asphalt industry, with many private owners nearing retirement, creating acquisition opportunities [29] Financial Performance and Backlog - CPI's backlog has shown **18 consecutive quarters of growth**, indicating strong future revenue confidence [54] - Approximately **80-85%** of the next 12 months' revenue is secured in the backlog, providing a solid foundation for future growth [53] Cash Flow and Leverage - The company generated **$658 million** in cash flow over the past three years, with cash flow from operations constituting **75-85%** of EBITDA [58] - CPI's leverage ratio is expected to stabilize between **1.5x to 2.5x** by 2030, following a temporary increase due to acquisitions [59] Management and Culture - The board of directors has a long-term focus, with five members having been with the company since its inception, fostering a culture of stability and long-term value creation [18] - The management team is described as younger and more dynamic, enhancing the company's ability to execute its growth strategy [14][47] Additional Important Insights - CPI's focus on technology and innovation aims to improve operational efficiency and bidding processes, enhancing overall profitability [34][35] - The company emphasizes maintaining its culture as a competitive advantage, which aids in attracting and retaining talent [16][47] - Recent acquisitions, such as P&S Paving and operations in Houston, are expected to enhance CPI's market presence and operational scale [40][41] This summary encapsulates the key insights and strategic direction of Construction Partners as discussed during the 2025 Investor Day, highlighting the company's growth trajectory, market opportunities, and financial performance.