Key Takeaways Four stocks with recent price strength were screened using strong performance and valuation metrics.FLUX Power soared 92.1% in four weeks, with earnings estimates rising 40% over the past 60 days. AUGO, ARCT and STRL also posted gains and earnings growth. U.S. stock markets have continued their northward journey in 2025 following an impressive rally over the past two years. A weak labor market has raised expectations that the Fed will continue to reduce the benchmark lending rate during the re ...

Core Insights - The U.S. infrastructure market is experiencing growth due to federal and state funding initiatives aimed at enhancing public infrastructure and sustainability, benefiting companies like Sterling Infrastructure, Inc. and Granite Construction Incorporated [1][2] - A recent Federal Reserve rate cut is expected to further stimulate investments in large-scale projects, enhancing the market environment for these companies [2] Company Analysis: Sterling Infrastructure, Inc. (STRL) - Sterling has a market capitalization of approximately $11 billion and is shifting focus towards large mission-critical projects, such as data centers and manufacturing, due to weakness in the housing market [4] - The E-Infrastructure Solutions segment, which contributes 51% to total revenues, saw a year-over-year revenue growth of 24.2% in the first half of 2025, with a backlog increase of 44% to $1.2 billion [5] - The company expects E-Infrastructure Solutions revenue growth of 18% to 20% year-over-year in 2025, with adjusted operating profit margins projected in the mid-to-high 20% range [5] - Recent acquisition of CEC Facilities Group is expected to enhance Sterling's capabilities in mission-critical electrical and mechanical services [6] Company Analysis: Granite Construction Incorporated (GVA) - Granite has a market capitalization of approximately $4.7 billion and is executing a strategic plan aimed at driving construction margins and enhancing organic growth [7] - Revenues in Granite's Construction and Materials segments grew by 2.6% and 13.2% year-over-year, respectively, with Committed and Awarded Projects reaching a record $6.1 billion [9] - Recent acquisitions, including Warren Paving and Papich Construction, are expected to contribute approximately $425 million in annual revenues with an adjusted EBITDA margin of about 18% [10] - Granite's financial performance is supported by a solid project backlog and recent acquisitions, although earnings estimates have remained flat [22] Stock Performance & Valuation - Sterling's stock has outperformed Granite's and the broader construction sector over the past three months, trading at a premium valuation compared to Granite [12][14] - The Zacks Consensus Estimate for STRL's 2025 EPS indicates a year-over-year growth of 56.9%, while GVA's estimates imply improvements of 26.6% [18][20] - Sterling's trailing 12-month ROE of 29.1% exceeds Granite's average, indicating higher efficiency in generating shareholder returns [20] Investment Recommendation - Sterling is positioned as a stronger investment choice due to its accelerating growth, operational leverage, and upward earnings estimate momentum [23] - Granite, while stable, shows slower growth and limited near-term catalysts, reflected in its Zacks Rank of 3 (Hold) [22]

Group 1 - Sterling Infrastructure, Inc. (NASDAQ:STRL) has experienced a significant stock price increase, with a 335% gain over the past two years and a 262% rise from its post-Liberation Day lows [1] - The company's E-infrastructure division, which was virtually non-existent six or seven years ago, now accounts for half of Sterling's revenue [1][2] - Sterling Infrastructure provides a range of services including e-infrastructure, transportation, and building solutions, as well as concrete, plumbing, and surveying services for both residential and commercial construction [2]

Core Insights - Sterling Infrastructure, Inc. (STRL) reported strong second-quarter 2025 results, showcasing significant top-line growth and robust cash flow generation [1][10] - The company is well-positioned for future growth with a net cash position exceeding $400 million, allowing for both organic and inorganic investments [2][10] - STRL has demonstrated a commitment to returning capital to shareholders through share repurchases and has extended its credit facility to enhance liquidity [3] Financial Performance - STRL achieved an operating cash flow of $85 million for Q2 2025 and $170.3 million for the first half of the year, nearly matching last year's performance despite increased capital expenditures [1][10] - The company holds $699 million in cash against $298 million in debt, resulting in a net cash position of over $400 million [2][10] - Earnings estimates for 2025 and 2026 have increased to $9.57 and $10.98 per share, reflecting year-over-year growth of 56.9% and 14.7% respectively [12] Strategic Initiatives - STRL is pursuing a $450 million acquisition of CEC Facilities Group, which will enhance its electrical and mechanical service offerings [2][10] - The company is focusing on expanding its E-Infrastructure capabilities to meet strong demand from data centers and e-commerce facilities [4] - Management's cash flow discipline will be crucial for sustaining growth and effectively deploying cash for acquisitions and operational improvements [4] Competitive Landscape - Competitors like Jacobs Solutions and Quanta Services illustrate the importance of cash generation and disciplined capital allocation in the infrastructure sector [5][7] - Jacobs has successfully expanded into high-growth areas while maintaining a strong balance sheet, similar to STRL's strategy [6] - Quanta Services emphasizes disciplined capital allocation to support large-scale projects, highlighting the competitive necessity for sustainable cash generation [7] Market Performance - STRL's stock has increased by 49.4% over the past three months, outperforming the Zacks Engineering - R and D Services industry's decline of 2.5% [8] - The company currently trades at a forward 12-month price-to-earnings (P/E) ratio of 34.46, indicating a premium valuation compared to industry peers [14]

Core Insights - Sterling Infrastructure, Inc. (STRL) has experienced a significant stock surge of 159.1% over the past six months, outperforming the Zacks Engineering - R and D Services industry, the broader Zacks Construction sector, and the S&P 500 index [1][8] Company Performance - The company has gained momentum since the beginning of 2025, driven by increased infrastructure spending in the U.S. and a recent Federal Reserve rate cut [2] - STRL's E-Infrastructure Solutions segment, which contributes 51% to total revenues, reported a year-over-year revenue growth of 24.2% in the first half of 2025, with expectations of 18-20% growth for the year [5][20] Market Trends - The demand for data center projects is rising due to factors such as AI-based solutions, cloud migration, and sustainability initiatives, supported by federal and state infrastructure spending [4] - The Federal Reserve's interest rate cut on September 17, 2025, is expected to further stimulate infrastructure investments [6][9] Strategic Acquisitions - STRL's acquisition of CEC Facilities Group, completed on September 2, 2025, is anticipated to enhance its electrical and mechanical service capabilities across new markets [11][20] Earnings Estimates - Earnings estimates for STRL have increased to $8.90 and $9.74 per share for 2025 and 2026, reflecting year-over-year growth of 56.9% and 14.7%, respectively [12][21] Competitive Position - STRL is positioning itself competitively in mission-critical infrastructure, focusing on alternative delivery and e-infrastructure, although it faces competition from larger firms like MasTec, Primoris, and EMCOR [14][17] Valuation - The stock is currently trading at a premium with a forward 12-month price-to-earnings (P/E) ratio of 32.73, indicating strong market potential [18][19] Investment Outlook - Analysts have a "Strong Buy" recommendation for STRL, reflecting optimism about its growth trajectory and favorable market conditions [21][24]

Core Insights - U.S. stock markets are experiencing significant gains in 2025, with major indexes like the Dow, S&P 500, and Nasdaq Composite up 10.3%, 14.4%, and 18.2% year-to-date, respectively, nearing all-time highs [1][8] Stock Performance - A weak labor market has led to expectations that the Federal Reserve will continue to lower the benchmark lending rate throughout 2025, although the recent U.S. government shutdown may dampen investor enthusiasm [2] - Five stocks identified as having strong price momentum are Century Aluminum Co. (CENX), DRDGOLD Ltd. (DRD), Globalstar Inc. (GSAT), TAT Technologies Ltd. (TATT), and Sterling Infrastructure Inc. (STRL) [3][8] Stock Screening Criteria - Stocks must show a percentage change in price greater than zero over the last four weeks and greater than 10% over the last twelve weeks to indicate sustained momentum [5] - Stocks should have a Zacks Rank of 1 (Strong Buy) and an average broker rating of 1, indicating strong future performance expectations [6] - Stocks must be trading at a minimum price of $5 and be within 85% of their 52-week high to ensure they are strong performers [7] Individual Stock Highlights - **Century Aluminum Co. (CENX)**: Stock price increased by 35.2% in the last four weeks, with an expected earnings growth rate of 77.4% for the next year [10] - **DRDGOLD Ltd. (DRD)**: Stock price rose by 34.9% in the last four weeks, with an expected earnings growth rate of -0.7% for the current year [11] - **Globalstar Inc. (GSAT)**: Stock price climbed 34.9% in the last four weeks, with an expected earnings growth rate of 66.7% for the current year [14] - **TAT Technologies Ltd. (TATT)**: Stock price surged 24.9% in the last four weeks, with an expected earnings growth rate of 45% for the current year [16] - **Sterling Infrastructure Inc. (STRL)**: Stock price advanced 22.2% in the last four weeks, with an expected earnings growth rate of 56.9% for the current year [19]

Core Viewpoint - Sterling Infrastructure (STRL) is positioned well to potentially beat earnings estimates in its upcoming quarterly report, supported by a strong history of exceeding expectations [1]. Group 1: Earnings Performance - Sterling Infrastructure has a solid track record of surpassing earnings estimates, particularly in the last two quarters, with an average surprise of 11.10% [2]. - In the most recent quarter, the company was expected to report earnings of $2.69 per share but instead reported $2.26 per share, resulting in a surprise of 19.03%. In the previous quarter, the consensus estimate was $1.58 per share, while the actual earnings were $1.63 per share, leading to a surprise of 3.16% [3]. Group 2: Earnings Estimates and Predictions - Estimates for Sterling Infrastructure have been trending upward, aided by its history of earnings surprises. The stock currently has a positive Zacks Earnings ESP (Expected Surprise Prediction), indicating a strong likelihood of a future earnings beat, especially given its solid Zacks Rank [6]. - Stocks with a positive Earnings ESP and a Zacks Rank of 3 (Hold) or better have a nearly 70% chance of producing a positive surprise, suggesting that out of 10 such stocks, approximately seven could beat consensus estimates [7]. Group 3: Earnings ESP and Analyst Sentiment - Sterling Infrastructure has an Earnings ESP of +1.26%, indicating that analysts have recently become more optimistic about the company's earnings prospects. This positive Earnings ESP, combined with a Zacks Rank of 1 (Strong Buy), suggests that another earnings beat may be imminent [9]. - The Zacks Earnings ESP compares the Most Accurate Estimate to the Zacks Consensus Estimate, with the Most Accurate Estimate reflecting the latest analyst revisions, which may provide a more accurate prediction of earnings [8].

Group 1 - Sterling Infrastructure, Inc. (NASDAQ: STRL) has been under observation for potential investment opportunities, indicating a focus on companies with aggressive growth prospects [1] - The investment philosophy highlighted emphasizes long-term discipline and consistent alpha generation, suggesting a strategic approach to investing in high-growth companies [1] - The article reflects a personal conviction towards the stock, indicating a beneficial long position in STRL, which may suggest confidence in the company's future performance [1]

Key Takeaways Sterling's Building Solutions revenues fell 7.6% in H1 2025 to $199.3M amid housing market weakness.E-Infrastructure backlog rose 44% year over year to $1.2B, led by data centers and manufacturing projects.Service diversification and CEC Facilities acquisition are expected to bolster STRL's long-term prospects.Sterling Infrastructure, Inc. (STRL) operates as a diversified construction solutions provider, with strong positions in civil, specialty services and building segments. Its Building Sol ...

Core Insights - The bullish factors of rising earnings growth and anticipated interest rate cuts are expected to support stock purchases in October and throughout Q4 [1][2] - Investors are encouraged to utilize a Zacks screen to identify top Zacks Rank 1 (Strong Buy) stocks, which historically outperform the market [2][3] Zacks Rank 1 Stock Screening - The Zacks Rank 1 stocks have shown an average annual return of approximately 24.4% since 1988, making them a strong starting point for investment [5] - Key screening parameters include: - Zacks Rank equal to 1 - Positive percentage change in current quarter estimates over the last four weeks [6] - Top 5 stocks with the best average broker rating changes over the last four weeks [7] Featured Stock: Sterling Infrastructure, Inc. (STRL) - Sterling Infrastructure operates in the U.S. infrastructure sector, focusing on E-Infrastructure, Transportation, and Building Solutions [8] - The company is benefiting from trends such as the AI data center boom and energy industry expansion, with a backlog growth of 24% year-over-year, reaching $2 billion [10] - STRL's revenue is projected to grow by 7% in 2025 and 13% in 2026, with adjusted earnings expected to increase by 57% this year and 15% in FY26, reaching $10.98 per share [11] - The stock has experienced a significant increase of 2,300% over the past five years, although it has recently pulled back after reaching all-time highs [14]