Core Insights - Investors are evaluating the value opportunities between Quanex Building Products (NX) and Construction Partners (ROAD) in the Building Products - Miscellaneous sector [1] Valuation Metrics - NX has a forward P/E ratio of 7.78, significantly lower than ROAD's forward P/E of 37.71 [5] - NX's PEG ratio is 0.56, while ROAD's PEG ratio is 0.95, indicating NX's better valuation relative to its expected earnings growth [5] - NX's P/B ratio stands at 0.96, compared to ROAD's P/B of 5.08, suggesting NX is more undervalued based on market value versus book value [6] Zacks Rank and Value Grades - NX holds a Zacks Rank of 1 (Strong Buy), indicating a positive earnings outlook, while ROAD has a Zacks Rank of 3 (Hold) [3] - NX has a Value grade of B, whereas ROAD has a Value grade of C, further supporting NX as the more attractive option for value investors [6]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates involves navigating inherent risks and volatility [1] Group 1: Company Overview - Construction Partners (ROAD) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2] - The company has a historical EPS growth rate of 14.2%, with projected EPS growth of 50.1% this year, significantly surpassing the industry average of 8.3% [5] Group 2: Financial Metrics - Cash flow growth for Construction Partners stands at 27.2% year-over-year, well above the industry average of 1.9% [6] - The company's annualized cash flow growth rate over the past 3-5 years is 17%, compared to the industry average of 5.5% [7] Group 3: Earnings Estimates - There has been a positive trend in earnings estimate revisions for Construction Partners, with the Zacks Consensus Estimate for the current year increasing by 1.9% over the past month [9] - The combination of a Zacks Rank 2 and a Growth Score of A positions Construction Partners as a potential outperformer for growth investors [11]

Core Viewpoint - Construction Partners (ROAD) has been upgraded to a Zacks Rank 2 (Buy), indicating a positive outlook based on rising earnings estimates, which significantly influence stock prices [1][3]. Earnings Estimates and Stock Price Impact - The Zacks rating system emphasizes the importance of earnings estimate revisions, which are strongly correlated with near-term stock price movements [4][6]. - An increase in earnings estimates typically leads to higher fair value calculations by institutional investors, resulting in stock price movements [4]. Company Performance and Outlook - Construction Partners is projected to earn $2 per share for the fiscal year ending September 2025, reflecting a year-over-year increase of 50.4% [8]. - Over the past three months, the Zacks Consensus Estimate for Construction Partners has risen by 6.6%, indicating a positive trend in earnings expectations [8]. Zacks Rating System - The Zacks Rank system classifies stocks into five groups based on earnings estimates, with a strong historical performance, particularly for Zacks Rank 1 stocks, which have averaged a +25% annual return since 1988 [7]. - The upgrade of Construction Partners to a Zacks Rank 2 places it in the top 20% of Zacks-covered stocks, suggesting potential for market-beating returns in the near term [10].

Financial Performance - For the three months ended December 31, 2024, the company reported revenues of $561.58 million, an increase from $396.51 million in the same period of 2023, representing a growth of 41.5%[149]. - Adjusted EBITDA for the same period was $68.80 million, up from $40.87 million in 2023, resulting in an Adjusted EBITDA margin of 12.3%, compared to 10.3% in the prior year[149]. - The net income for the three months ended December 31, 2024, was a loss of $3.05 million, compared to a net income of $9.84 million in the same period of 2023[149]. - Adjusted net income for the same period was $13.27 million, compared to $9.84 million in 2023[150]. - Revenues for the three months ended December 31, 2024 increased by $165.1 million, or 41.6%, to $561.6 million from $396.5 million for the same period in 2023[151]. - Gross profit for the three months ended December 31, 2024 increased by $24.7 million, or 47.6%, to $76.6 million from $51.9 million for the same period in 2023[152]. - General and administrative expenses increased by $8.8 million, or 24.9%, to $44.3 million for the three months ended December 31, 2024, primarily due to expenses from acquired businesses[154]. - Acquisition-related expenses rose to $19.6 million for the three months ended December 31, 2024, compared to $0.5 million for the same period in 2023, mainly due to the Lone Star Acquisition[155]. - Net income (loss) decreased by $12.9 million, or 131.0%, resulting in a net loss of $3.1 million for the three months ended December 31, 2024, compared to net income of $9.8 million for the same period in 2023[159]. - Adjusted EBITDA for the three months ended December 31, 2024 was $68.8 million, representing a 68.3% increase from $40.9 million for the same period in 2023[160]. Acquisitions - The company acquired Lone Star Paving, adding 10 HMA plants, four aggregate facilities, and one liquid asphalt terminal during the three months ended December 31, 2024[137]. - On January 2, 2025, the company acquired Overland Corporation, adding eight HMA plants in Oklahoma and expanding its paving services in northern Texas[138]. - The company also acquired Mobile Asphalt Company LLC on February 3, 2025, adding five HMA plants and expanding operations in southwestern Alabama[139]. - The company incurred transformative acquisition expenses of $18.46 million during the three months ended December 31, 2024[149]. Cash Flow and Debt - Cash provided by operating activities, net of acquisitions, was $40.7 million for the three months ended December 31, 2024, down from $60.4 million for the same period in 2023[161]. - Cash used in investing activities increased significantly to $679.0 million for the three months ended December 31, 2024, primarily due to acquisitions[164]. - Cash provided by financing activities was $694.8 million for the three months ended December 31, 2024, mainly from net proceeds of $835.0 million from the Term Loan B[166]. - The company entered into a Term Loan B Credit Agreement for $850 million, fully drawn on November 1, 2024, to finance acquisitions and repay existing debt[140]. - Total debt obligations amount to $1.24 billion, with significant payments due in 2025 and 2026[175]. - The company has a purchase agreement obligation of $116 million due to sellers of Lone Star, payable in 2025[175]. - The company has sufficient operating cash flow and available borrowings to fund operations and capital expenditures for at least the next 12 months[172]. - A hypothetical 1% change in borrowing rates would result in a $12.4 million change in annual interest expense based on variable rate debt[178]. - Projected interest payments for fiscal year 2025 are estimated at $71.5 million based on a weighted average SOFR-based floating rate of 7.03%[180]. - Total contractual obligations amount to $1.41 billion, with significant payments due in 2025 and 2027[175]. - The company may need to seek additional capital if acquisitions require more funds than available cash[173]. Future Outlook - The company expects total capital expenditures for fiscal 2025 to be approximately $130.0 million to $140.0 million[169]. - Future cash flows are subject to inflation and supply chain constraints, which may impact capital expenditures[173]. - The company has $6.6 million in aggregate letters of credit and future purchase commitments of $3.3 million for diesel fuel and $0.4 million for natural gas[176]. - The fair value of the outstanding interest rate swap contract is $15.6 million as of December 31, 2024[178].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 was $561.6 million, an increase of 41.6% year-over-year, with 11.2% organic growth and 30.4% from acquisitions [25][28] - Adjusted net income was $13.3 million, representing a 35% increase compared to the same quarter last year, with diluted earnings per share of $0.25 [27][28] - Adjusted EBITDA was $68.8 million, up 68% year-over-year, with an adjusted EBITDA margin of 12.3%, compared to 10.3% in the prior year [28] Business Line Data and Key Metrics Changes - The company reported a record project backlog of $2.66 billion as of December 31, 2024, indicating strong demand for infrastructure services [15][29] - General and administrative expenses as a percentage of total revenue decreased to 7.9% from 8.9% in the previous year [26] Market Data and Key Metrics Changes - Public infrastructure markets saw total lettings for roads and bridges increase by approximately 16% year-over-year across the company's eight-state footprint [16] - Florida's infrastructure funding grew by over 50% in the first half of the current state fiscal year due to the Moving Florida Forward program [17] Company Strategy and Development Direction - The company continues to focus on strategic acquisitions and organic growth, with a strong acquisition pipeline and a commitment to integrating new companies effectively [19][20] - The long-term strategy emphasizes investment in human capital to build a competitive advantage and ensure sustainable growth [22] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the ongoing demand for infrastructure services, supported by healthy funding mechanisms across states [66][72] - The company anticipates continued growth in funding, projecting mid to high single-digit increases due to the IIJA and state funding programs [105][106] Other Important Information - The company plans to maintain a strong balance sheet while pursuing acquisitions, aiming to reduce leverage to approximately 2.0 times within the next four to five quarters [32][50] - Capital expenditures for Q1 were $26.8 million, with expectations for total capital expenditures in the range of $130 million to $140 million for fiscal 2025 [35][36] Q&A Session Summary Question: Contribution of recent acquisitions to guidance - The combined revenue contribution from the two recent acquisitions is expected to be in the $120 million to $130 million range, with backlog contributions of $90 million to $100 million [42] Question: Comments on purchase price of acquisitions - The purchase prices for the acquisitions were in line with historical multiples, consistent with the company's acquisition strategy [45] Question: Impact of recent acquisitions on gross margins and SG&A - The new acquisitions are expected to have typical margins, and the company aims to improve margins through strategic bidding and integration [58] Question: Cost inflation outlook - The company expects construction inflation to be around 4% to 5%, with stable costs for materials and labor [61] Question: Updates on state DOT funding - All states have healthy funding mechanisms, with Texas and Florida leading in infrastructure funding [66] Question: Concerns about funding delays - Management has not heard of any pauses in funding for projects, with a focus on hard infrastructure [117] Question: Bidding environment and backlog management - The company is able to bid patiently due to a strong backlog, and there has been no significant change in the competitive landscape [122] Question: Breakdown of backlog between public and private activity - The current backlog consists of 58% public and 42% private projects, with expectations for a similar trend as seen in fiscal 2024 [133]

Financial Data and Key Metrics Changes - The company reported record revenue of $561.6 million for the first quarter of fiscal 2025, representing a year-over-year increase of 41.6% [14] - Adjusted net income was $13.3 million, with diluted earnings per share of $0.25, reflecting a 35% increase compared to the same quarter last year [16] - Adjusted EBITDA increased by 68% to $68.8 million, with an adjusted EBITDA margin of 12.3%, up from 10.3% in the prior year [17] - The company experienced a net loss of $3.1 million due to non-recurring expenses related to a transformative acquisition [16] Business Line Data and Key Metrics Changes - The revenue mix for the year included 11.2% organic growth and 30.4% from recent acquisitions [14] - The company achieved a record project backlog of $2.66 billion, indicating strong demand for infrastructure services [17] Market Data and Key Metrics Changes - Local markets in the Sunbelt are growing, with states focused on improving road quality and increasing capacity due to significant migration [9] - Public infrastructure market lettings for roads and bridges increased by approximately 16% year-over-year across the company's eight-state footprint [10] - Florida's infrastructure funding saw contract awards grow by over 50% in the first half of the current state fiscal year due to the Moving Florida Forward program [10] Company Strategy and Development Direction - The company is focused on a strategic growth model that includes both acquisitions and organic growth, with a strong 11% organic growth reported this quarter [11] - The acquisition pipeline remains active, with ongoing conversations in current and potential new states [10] - The company aims to maintain a strong balance sheet while integrating new acquisitions and reducing leverage to approximately 2.5 times in the next four to five quarters [18][34] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the continued strong demand for infrastructure services and the ability to bid patiently due to a robust backlog [90] - The company anticipates a typical year for construction inflation, estimating inflation could be around 4% to 5% across the total cost structure [44] - Management expects funding for infrastructure projects to grow in the mid to high single digits, supported by both state funding mechanisms and the IIJA [77] Other Important Information - The company has cash and cash equivalents of $132.5 million and $393.4 million available under its credit facility [17] - Capital expenditures for the first quarter were $26.8 million, with total expected capital expenditures for fiscal 2025 in the range of $130 million to $140 million [20] Q&A Session Summary Question: Contribution of recent acquisitions to guidance - Management indicated that the combined revenue contribution from the two recent acquisitions is expected to be in the range of $120 million to $130 million for the remainder of the year, with a backlog contribution of $90 million to $100 million [27] Question: Need to digest recent acquisitions - Management acknowledged the need to maintain a strong balance sheet while integrating new acquisitions, emphasizing a commitment to organizational integration [32] Question: Cost inflation outlook - Management expects a typical year for construction inflation, with costs being passed through in bids, and noted stable energy costs [44] Question: Updates on state DOT funding - Management reported that all states have healthy funding mechanisms, with Texas and Florida leading in infrastructure funding [47] Question: Concerns about funding delays - Management has not heard of any pauses in funding for projects and noted that the new administration is looking to prioritize hard infrastructure [87] Question: Backlog and bidding environment - Management indicated that while the backlog may plateau, they continue to see plenty of bidding opportunities and are able to bid at good margins [91]

Core Viewpoint - Construction Partners reported quarterly earnings of $0.25 per share, exceeding the Zacks Consensus Estimate of $0.14 per share, and showing an increase from $0.19 per share a year ago, representing an earnings surprise of 78.57% [1][2] Financial Performance - The company achieved revenues of $561.58 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 9.11%, compared to $396.51 million in the same quarter last year [2] - Over the last four quarters, Construction Partners has consistently exceeded consensus EPS estimates [2] Stock Performance - Since the beginning of the year, Construction Partners shares have declined by approximately 4.5%, while the S&P 500 has gained 3.4% [3] - The current Zacks Rank for Construction Partners is 3 (Hold), indicating expected performance in line with the market in the near future [6] Earnings Outlook - The consensus EPS estimate for the upcoming quarter is -$0.01 on revenues of $515.9 million, and for the current fiscal year, it is $1.95 on revenues of $2.56 billion [7] - The trend of estimate revisions for Construction Partners is currently mixed, which may change following the recent earnings report [6] Industry Context - The Building Products - Miscellaneous industry, to which Construction Partners belongs, is currently in the top 35% of over 250 Zacks industries, suggesting a favorable outlook compared to lower-ranked industries [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which can be tracked by investors [5]

Financial Performance - Revenue for Q1 FY25 was $561.6 million, a 41.6% increase from $396.5 million in Q1 FY24[2] - Adjusted EBITDA for Q1 FY25 was $68.8 million, up 68% from $40.9 million in the same quarter last year, resulting in an Adjusted EBITDA margin of 12.25%[2][6] - Adjusted net income for Q1 FY25 was $13.3 million, translating to diluted earnings per share of $0.25[5] - Net income for Q1 FY25 was a loss of $3.1 million, compared to a net income of $9.8 million in Q1 FY24[4] - Adjusted EBITDA for the three months ended December 31, 2024, was $68,797 thousand, an increase from $40,874 thousand in 2023, resulting in an Adjusted EBITDA margin of 12.3%[22] - Revenues for the three months ended December 31, 2024, reached $561,580 thousand, compared to $396,505 thousand in 2023, marking a year-over-year increase of 41.5%[22] - Adjusted net income for the three months ended December 31, 2024, was $13,270 thousand, compared to $9,843 thousand in 2023[24] Project Backlog and Outlook - Record project backlog reached $2.66 billion as of December 31, 2024, compared to $1.62 billion a year earlier[6] - The company raised its fiscal 2025 outlook, projecting revenue between $2.66 billion and $2.74 billion[11] - The company anticipates continued growth driven by strong demand for infrastructure projects in the Sunbelt region[7] - Adjusted EBITDA for fiscal 2025 is projected to be between $375.0 million and $400.0 million, with an Adjusted EBITDA margin of 14.1% to 14.6%[11] - The company projects fiscal year 2025 revenues to be between $2,660,000 thousand and $2,740,000 thousand, with an Adjusted EBITDA forecast of $375,000 thousand to $400,000 thousand[26] Acquisitions and Expenses - The company completed the acquisition of Lone Star Paving and two additional acquisitions in early 2025, expanding its market presence[2] - Business acquisitions in the current quarter amounted to $654,200 thousand, significantly higher than $81,351 thousand in the same quarter of the previous year[19] - General and administrative expenses were $44.3 million, decreasing as a percentage of total revenues to 7.9% from 8.9% in the same quarter last year[3] - Share-based compensation expense increased to $14,403 thousand for the three months ended December 31, 2024, compared to $2,889 thousand in 2023[19] Cash and Assets - Total assets increased to $2,567,916 thousand as of December 31, 2024, up from $1,542,135 thousand on September 30, 2024, representing a growth of 67%[17] - Cash, cash equivalents, and restricted cash at the end of the period were $133,068 thousand, up from $69,711 thousand in the previous year[19] - The company reported cash paid for interest of $15,051 thousand for the quarter, up from $4,692 thousand in the previous year[19]

Core Viewpoint - Nevada King Gold Corp. has received a Finding of No Significant Impact (FONSI) from the Bureau of Land Management (BLM) and approval from the State of Nevada for a minor modification to its existing Plan of Operations at the Atlanta Gold Mine Project, allowing for additional drilling and road construction [1][4]. Summary by Relevant Sections Company Operations - The approved modification allows for 47 additional drill sites and 1.9 km of new drill road construction throughout the Atlanta District [6]. - As of February 3, 2025, 650 meters of new roads along the South Quartzite Ridge Target (SQRT) have been completed [6]. - The current drilling program, initiated on October 16, 2024, has completed 11,870 meters covering 49 holes out of a planned 20,000 meters of reverse circulation drilling [6]. Exploration and Resource Potential - The new modification enhances access to the southern half of the SQRT and the Silver Park region, enabling closer spacing of existing holes and following structural trends identified in CSAMT data [4]. - The drilling aims to expand mineralization southward from the resource zone and identify new satellite deposits within the Atlanta District [6]. - The Atlanta Gold Mine project hosts an NI 43-101 compliant pit-constrained oxide resource of 460,000 ounces of gold in the measured and indicated category, along with an inferred resource of 142,000 ounces [9][10]. Technical Details - The QA/QC protocols for the Atlanta Project involve splitting RC samples at the drill site and maintaining full custody during transport to American Assay Lab in Reno, Nevada [5]. - The laboratory processes include a four acid + boric acid digestion and conventional multi-element ICP-OES analysis, with gold assays conducted using a lead fire assay method [7].

The market expects Construction Partners (ROAD) to deliver a year-over-year decline in earnings on higher revenues when it reports results for the quarter ended December 2024. This widely-known consensus outlook is important in assessing the company's earnings picture, but a powerful factor that might influence its near-term stock price is how the actual results compare to these estimates.The earnings report, which is expected to be released on February 7, 2025, might help the stock move higher if these key ...