Group 1 - Babcock International Group PLC (BCKIY) has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Sterling Infrastructure (STRL) has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank strategy targets companies with positive earnings estimate revision trends, which is a key factor for value investors [2][3] - Value investors utilize various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to assess whether a company is undervalued [4] Group 2 - BCKIY has a forward P/E ratio of 19.07, significantly lower than STRL's forward P/E of 29.13, suggesting BCKIY may be more attractively priced [5] - BCKIY's PEG ratio is 0.68, indicating a favorable growth outlook compared to STRL's PEG ratio of 1.94, which suggests higher valuation relative to growth [5] - BCKIY's P/B ratio is 9.2, while STRL's P/B ratio is 9.22, showing that both companies are similarly valued in terms of book value, but BCKIY has a better overall valuation profile [6] - Based on these metrics, BCKIY holds a Value grade of B, while STRL has a Value grade of D, making BCKIY the more attractive option for value investors [6]

Greetings. Sean Puit here, Zach's equity strategist, and today I'm going to be discussing if it's time to buy, hold, or take profits in Sterling Infrastructure stock at all-time highs. So, if you're not familiar with Sterling Infrastructure stock, ticker symbol ST STRL, it's a stock that gained a lot of notoriety over the last few years, uh, amid Joe Biden's President Joe Biden's historic infrastructure bill, $1.2% trillion infrastructure bill.So it gave a mixed amount of federal spending on roads, bridges, ...

Key Takeaways Mission-critical work, led by data centers, now makes up over 65% of STRL's E-Infrastructure backlog. STRL's residential business fell 19% YoY, but total backlog rose to $2.13B on strong public project wins. STRL raised 2025 EPS guidance to $8.40-$8.90, reflecting 25.5% growth amid favorable infrastructure trends.Sterling Infrastructure, Inc. (STRL) has currently shifted its focus toward large-scale mission-critical projects, including data centers, amid a weak housing market. This strategic ...

Core Viewpoint - Sterling Infrastructure (STRL) stock has reached new all-time highs, raising questions about whether to buy, hold, or take profits at over $240 per share [1] Performance Summary - STRL has increased nearly +100% over the last year, with a more than +40% rise year to date, and has gained nearly +2,400% over the last five years [2] Acquisition and Growth Strategy - Sterling Infrastructure announced the acquisition of CEC Facilities Group for $505 million, pending regulatory approval, which is expected to close in Q3 and add nearly $400 million to revenue this year and over $50 million in EBITDA [5][6] - The company is benefiting from the AI boom, securing several AI-related projects, including a $100 million contract for a data center development in the Southeastern United States [6] Project Focus and Backlog - The company is concentrating on high-margin projects, such as AI initiatives and the Hyundai Engineering America facility in Georgia, aimed at boosting EV and hybrid car production [7] - Sterling Infrastructure's total backlog currently stands at around $2 billion, providing a solid cushion for future revenue [9] Financial Outlook - Total sales are expected to dip 1% in fiscal 2025 to $2.09 billion, but are projected to rebound by 8% in FY26 to $2.26 billion [11] - The bottom line is expected to expand 41% in FY25 to $8.61 per share, with FY26 EPS projected to rise another 10% to $9.48 [13] Earnings Estimates - Current Zacks Consensus Estimates for FY25 EPS is $8.61, with year-over-year growth estimated at 41.15% [14] Valuation Metrics - STRL trades at 28.1X forward earnings, slightly above the S&P 500's 24.2X and the Zacks Engineering-R and D Services Industry Average of 22.7X [15] Strategic Insights - Following a significant rally, STRL holds a Zacks Rank 3 (Hold), indicating it remains a valuable asset in advancing America's infrastructure, though there is temptation to take profits at all-time highs [17] - Analysts have become bullish after the CEC acquisition announcement, suggesting STRL may serve as a prime buy-the-dip target [18]

Key Takeaways STRL grows high-margin E-Infrastructure, with backlog up 27% and margins topping 23%. TPC secured about $2B in new awards in 1Q25, pushing backlog to a record $19.4B. STRL and TPC's earnings estimates indicate strong gains, supported by healthy project pipelines.Sterling Infrastructure, Inc. ((STRL) and Tutor Perini Corporation ((TPC) are tapping into a robust infrastructure cycle with a clear focus on large-scale public and civil projects. From highways and bridges to mission-critical sites ...

THE WOODLANDS, Texas, July 10, 2025 /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or "the Company") today announced the appointment of B. Andrew (Andy) Rose and David (Dave) Schulz to its Board of Directors, effective July 10, 2025. Mr. Rose was appointed to the Compensation and Talent Development Committee, and the Corporate Governance and Nominating Committee, and Mr. Schulz was appointed to the Compensation and Talent Development Committee, and the Audit Committee.Andy Rose i ...

Core Viewpoint - Wall Street analysts' recommendations significantly influence investor decisions, but their reliability is questionable, particularly for Sterling Infrastructure (STRL) [1][5]. Group 1: Brokerage Recommendations - Sterling Infrastructure has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy based on three brokerage firms' recommendations, all of which are Strong Buy [2]. - The ABR suggests a favorable outlook for Sterling Infrastructure, but relying solely on this metric may not be advisable due to the historical ineffectiveness of brokerage recommendations in predicting stock price appreciation [5][10]. Group 2: Analyst Bias and Zacks Rank - Brokerage analysts often exhibit a strong positive bias in their ratings, with a tendency to issue five "Strong Buy" recommendations for every "Strong Sell" [6][10]. - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock performance compared to the ABR [8][11]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the ABR, which may not always be current [13]. Group 3: Current Earnings Estimates and Recommendations - The Zacks Consensus Estimate for Sterling Infrastructure remains unchanged at $8.61, suggesting stable analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate and other factors, Sterling Infrastructure currently holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [15].

Core Insights - Sterling Infrastructure, Inc. is strategically focusing on high-value infrastructure projects, which is enhancing its margin profile and earnings quality [1] - The company reported a gross margin of 22% in Q1 2025, an increase of 400 basis points from the previous year [1][9] - The E-Infrastructure segment's adjusted operating margins expanded nearly 618 basis points year over year to 23.2%, driven by a focus on mission-critical projects like data centers [1][9] Company Strategy - Sterling's disciplined project selection strategy prioritizes large, complex builds, allowing it to avoid lower-margin work [2] - The shift towards aviation and rail projects in Transportation Solutions, along with reduced exposure to low-bid heavy highway work, has contributed to margin expansion [2] Future Outlook - The company expects full-year infrastructure growth supported by a multi-year backlog visibility, with the E-Infrastructure segment holding a backlog of $1.2 billion [3] - The total pipeline is nearing $2 billion when including future phase work, weighted towards higher-margin projects, indicating potential for sustained profitability [3] Industry Context - Competitors like Quanta Services, Inc. and EMCOR Group, Inc. are also focusing on high-return sectors such as data centers and transportation [5] - Quanta Services reported a 12-month backlog of $16.37 billion as of March 31, 2025, reflecting growing demand for electric grid upgrades and AI-driven infrastructure needs [6] - EMCOR Group's U.S. Electrical Construction and Facilities Services segment reported an operating margin of 12.5%, while the U.S. Mechanical Construction and Facilities Services segment posted an operating margin of 11.9% [7] Performance Metrics - Sterling's stock has gained 107.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry's growth of 48% [8] - The company is currently trading at a price-to-earnings ratio of 26.14X, compared to the industry's average of 21.56X [11] - The Zacks Consensus Estimate for Sterling's EPS indicates year-over-year growth of 41.2% and 10.1% for 2025 and 2026, respectively [13]

Core Insights - Sterling Infrastructure, Inc. (STRL) shares are trading at a forward 12-month price-to-earnings (P/E) ratio of 25.29, which is approximately 19.5% higher than the Zacks Engineering - R and D Services industry average of 21.16, indicating a premium valuation compared to its five-year median [1][3]. Financial Performance - STRL stock has gained 35.8% year-to-date, outperforming the industry average increase of 8.1% and the S&P 500's rise of 5.4% [5]. - Data center-related revenues surged nearly 60% in the first quarter of 2025, contributing significantly to the E-Infrastructure performance [7][10]. - The total backlog for STRL increased by 17% year-over-year to $2.1 billion, with $1.2 billion attributed to E-Infrastructure, indicating strong future growth potential [11][12]. Market Position and Demand Drivers - The company is benefiting from stable demand in E-Infrastructure, driven by trends in Artificial Intelligence and digital transformation, which supports its premium valuation [9]. - The Transportation Solutions segment is also positioned for growth, with a backlog of $861 million, up 11% year-over-year, supported by ongoing federal investment under the Infrastructure Investment and Jobs Act (IIJA) [14][15]. Strategic Expansion - Sterling Infrastructure is expanding its E-Infrastructure platform through acquisitions, including a recent agreement to acquire CEC Facilities Group for $505 million, which is expected to enhance its service offerings and market presence [17][18]. - The acquisition is anticipated to create cross-selling opportunities and support the company's long-term growth strategy [18]. Earnings Estimates and Analyst Outlook - Earnings estimates for STRL have been revised upward to $8.61 per share for 2025, reflecting a growth of 41.2% year-over-year, while peer companies are expected to see lower growth rates [21]. - The company's strong fundamentals and strategic focus on high-growth sectors justify investor confidence despite its high valuation [20][21].

Market Overview - Markets ended higher on Wednesday, with the S&P 500 and Nasdaq Composite indices advancing by 0.47% and 0.94%, respectively, while the Dow Jones Industrial Average dropped by 10.52 points [1] - Market sentiment was positively influenced by a trade accord between the United States and Vietnam, easing concerns over prolonged trade tensions [1] Economic Indicators - A recent ADP report indicated an unexpected drop in private payrolls for June, with the private sector losing 33,000 jobs, suggesting potential challenges for the U.S. economy [2] - This decline in job numbers has raised scrutiny from investors, particularly in light of the Federal Reserve's cautious stance on interest rates [2] Investment Strategy - In the current macroeconomic environment, focusing on companies with strong financial fundamentals is crucial [3] - Relying solely on sales and earnings metrics may not yield long-term returns; a deeper analysis of a company's financial health and stability is essential for sustainable investment growth [3] Financial Analysis - A critical analysis of a company's financial background, including coverage ratios, is necessary for informed investment decisions [4] - The Interest Coverage Ratio is a key indicator used to evaluate a company's ability to pay interest on its debt, ensuring it is not over-leveraged [4][6] Interest Coverage Ratio Insights - The Interest Coverage Ratio is calculated as Earnings before Interest & Taxes (EBIT) divided by Interest Expense [5] - A ratio lower than 1.0 indicates a company may struggle to meet its interest obligations, while a higher ratio suggests a stronger financial position [9] Company Performance - Hudbay Minerals Inc. (HBM), Sterling Infrastructure, Inc. (STRL), Molina Healthcare, Inc. (MOH), and Vertiv Holdings Co (VRT) have strong interest coverage ratios, indicating solid financial footing [10] - HBM and STRL posted over 40% EPS growth estimates, while VRT shows a growth potential of 24.9% [10] - MOH projects 8.4% sales growth and 7.9% EPS growth, despite a 19.3% stock decline over the past year [10] Stock Screening Criteria - Stocks should have an Interest Coverage Ratio greater than the industry average, a favorable Zacks Rank, and a VGM Score of A or B for better investment results [11] - Additional criteria include a minimum stock price of $5, strong historical and projected EPS growth, substantial trading volume, and a Zacks Rank of 1 or 2 [12][13] Company Highlights - Hudbay Minerals has a trailing four-quarter earnings surprise of 50% on average, with a Zacks Consensus Estimate suggesting growth of 9.2% in sales and 41.7% in EPS [14] - Sterling Infrastructure has a trailing four-quarter earnings surprise of 11.5% on average, with a projected EPS growth of 41.2% [15] - Molina Healthcare's Zacks Consensus Estimate indicates growth of 8.4% in sales and 7.9% in EPS [16] - Vertiv Holdings has a trailing four-quarter earnings surprise of 10.4% on average, with projected growth of 18.8% in sales and 24.9% in EPS [17]