Core Viewpoint - Investors are increasingly seeking growth stocks that demonstrate above-average growth potential, with Sterling Infrastructure (STRL) identified as a strong candidate due to its favorable growth metrics and Zacks Rank [1][2]. Earnings Growth - Sterling Infrastructure has a historical EPS growth rate of 43%, with projected EPS growth of 26.5% for the current year, significantly outperforming the industry average of 15.1% [4]. Cash Flow Growth - The company exhibits a year-over-year cash flow growth of 31.6%, surpassing the industry average of 11.7%. Its annualized cash flow growth rate over the past 3-5 years stands at 34.5%, compared to the industry average of 3.4% [5][6]. Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Sterling Infrastructure, with the Zacks Consensus Estimate for the current year increasing by 7.8% over the past month, indicating strong future performance potential [7][8]. Investment Positioning - The combination of a Growth Score of A and a Zacks Rank of 2 positions Sterling Infrastructure favorably for outperformance, making it an attractive option for growth investors [8][9].

Core Insights - Sterling Infrastructure (STRL) is currently rated higher than Aecom Technology (ACM) based on Zacks Rank, with STRL at 2 (Buy) and ACM at 4 (Sell) [3] - STRL shows a more favorable earnings estimate revision trend compared to ACM, indicating a better analyst outlook for STRL [3] Valuation Metrics - STRL has a forward P/E ratio of 20.10, while ACM has a forward P/E of 21.62, suggesting STRL may be undervalued relative to ACM [5] - The PEG ratio for STRL is 1.34, compared to ACM's PEG ratio of 1.61, indicating STRL's expected earnings growth is more favorable [5] - STRL's P/B ratio is 5.15, slightly lower than ACM's P/B of 5.25, which may suggest a better valuation for STRL [6] - STRL holds a Value grade of B, while ACM has a Value grade of C, further supporting STRL as the superior value option [6]

Core Viewpoint - Sterling Infrastructure (STRL) has gained attention as one of the most searched stocks, indicating potential interest from investors and analysts regarding its future performance [1]. Earnings Estimate Revisions - The current quarter's earnings estimate for Sterling Infrastructure is projected at $1.68 per share, reflecting a year-over-year increase of +33.3% and a +9.5% change in the Zacks Consensus Estimate over the last 30 days [5]. - For the current fiscal year, the consensus earnings estimate stands at $5.66, indicating a +26.6% year-over-year change, with a +7.8% adjustment in the last month [5]. - The next fiscal year's consensus earnings estimate is $6.02, showing a +6.5% change from the previous year, with a +4.9% revision in the past month [6]. Revenue Growth Forecast - The consensus sales estimate for the current quarter is $599.9 million, representing a +7.1% year-over-year change [9]. - For the current fiscal year, the revenue estimate is $2.16 billion, indicating a +9.7% change, while the next fiscal year's estimate is $2.33 billion, reflecting a +7.7% change [9]. Last Reported Results and Surprise History - In the last reported quarter, Sterling Infrastructure achieved revenues of $582.82 million, a +11.6% year-over-year increase, and an EPS of $1.67 compared to $1.27 a year ago [9]. - The reported revenues exceeded the Zacks Consensus Estimate of $553.7 million by +5.26%, and the EPS surprise was +16.78% [10]. - The company has consistently beaten consensus EPS estimates in the last four quarters, while it has topped revenue estimates only once during this period [10]. Valuation - Sterling Infrastructure is graded B in the Zacks Value Style Score, indicating it is trading at a discount compared to its peers [14]. - Valuation multiples such as price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF) are essential for assessing whether the stock is fairly valued, overvalued, or undervalued [12][13]. Conclusion - The Zacks Rank 2 suggests that Sterling Infrastructure may outperform the broader market in the near term, supported by positive earnings estimate revisions and revenue growth [15].

Investment Thesis - Sterling Infrastructure (NASDAQ:STRL) has experienced a 47% stock rally since October 2023, outperforming the broader U.S. market, and maintains a high Seeking Alpha Quant rating [4] - The company is expected to benefit from recent developments and secular trends, with an attractive valuation and significant upside potential, leading to a "Strong Buy" rating [4] Recent Developments - In Q2 2024, Sterling Infrastructure reported an 11.6% year-over-year revenue growth, surpassing consensus estimates, with adjusted EPS increasing from $1.27 to $1.67 [5] - The operating margin improved by 95 basis points year-over-year, indicating strong operating leverage [5] - The company generated $70 million in free cash flow during Q2, enhancing its balance sheet and liquidity, with total cash exceeding total debt [6] Balance Sheet Overview - Total cash stands at $539.99 million, with total debt at $387.90 million, resulting in a net debt of -$152.09 million [7] - The current ratio is 1.24, and the quick ratio is 1.21, indicating solid liquidity [7] - The debt/free cash flow ratio is 3.65, and long-term debt constitutes 31.96% of total capital [7] Guidance and Future Outlook - Management raised guidance for FY 2024 revenue to approximately $2.19 billion, a 12% increase compared to FY 2022 [8] - Expected EBITDA growth from $264 million in 2023 to around $305 million in 2024 [8] Segment Performance - E-Infrastructure Solutions revenue was $241.3 million in Q2 2024, with an operating margin of 21.4% [10] - Transportation Solutions revenue increased to $232.8 million, maintaining an operating margin of 6.6% [10] - Building Solutions revenue was $108.7 million, with an operating margin of 12.7% [10] Market Position and Trends - The backlog in E-Infrastructure is growing, up 7% at the end of Q2 compared to the beginning of the year, indicating strong demand [11] - The company is positioned to benefit from increased data center investments driven by technological advancements and a housing shortage in the Building Solutions segment [12] Valuation Analysis - The stock has outperformed the broader U.S. market with a 35.5% rally since last August, and current multiples suggest undervaluation compared to sector medians [14] - A discounted cash flow (DCF) simulation indicates a fair value above $7 billion, suggesting a 120% upside potential [18] Conservative Scenario - Even under conservative revenue growth and free cash flow margin assumptions, the stock remains approximately 61% undervalued, indicating a significant margin of safety [81]

THE WOODLANDS, Texas, Aug. 8, 2024 /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or "the Company") today announced the appointment of Dan Govin as Chief Operating Officer ("COO"). In this role, Dan will be responsible for leading the execution of Sterling's strategic and operational activities. Dan brings 30 years of experience in operations and leadership to Sterling. Since 1994, Dan has held multiple commercial and operations management roles within the energy infrastructure i ...

Core Insights - Sterling Infrastructure reported second-quarter earnings that significantly exceeded expectations, leading to a rise in share price and an increase in full-year guidance [2][3][5] Financial Performance - In Q1, Sterling achieved 11.6% revenue growth to $582.8 million and a 31% increase in earnings per share (EPS) to $1.67, both surpassing analyst estimates [3] - Full-year revenue guidance was raised to a range of $2.15 billion to $2.225 billion, and diluted EPS guidance was increased to $5.60 to $5.75, up from previous estimates [3] Market Segments - Sterling operates in three main segments: E-infrastructure solutions, Transportation solutions, and Building solutions [4] - E-infrastructure revenue declined by 7%, but operating income grew by 20%, driven by 100% growth in the higher-margin data center segment [4] - The Transportation segment surged by 54%, with operating profits increasing by 57%, attributed to strong public-private infrastructure investments from the Bipartisan Infrastructure Act of 2021 [4] Investment Outlook - Sterling Infrastructure is viewed as a solid growth opportunity, trading at 18.8 times the recently raised EPS guidance, with a strong net cash position [5]

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Company Overview - Sterling Infrastructure, Inc. operates through subsidiaries in three segments: E-Infrastructure, Transportation, and Building Solutions, primarily in the Southern, Northeastern, Mid-Atlantic, Rocky Mountain regions, and the Pacific Islands [3] - E-Infrastructure Solutions focuses on large-scale site development for manufacturing, data centers, e-commerce distribution centers, warehousing, and power generation [3] - Transportation Solutions encompasses infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems [3] - Building Solutions includes concrete foundations for residential and commercial properties, parking structures, and plumbing services for new residential builds [3] - The company emphasizes sustainability and responsible operations to enhance societal quality of life, reflecting its commitment to its people, communities, customers, and investors [3] Upcoming Events - Sterling plans to release its financial results for the second quarter of 2024 on August 5, 2024, after market close [4] - A conference call to discuss the second quarter results and 2024 outlook is scheduled for August 6, 2024, at 9:00 am ET [1] - Interested parties can participate in the call by dialing (800) 836-8184 and are encouraged to call in ten minutes early [1] Additional Information - A simultaneous webcast of the conference call will be available on the company's website, with an archive accessible for thirty days post-event [2] - The company is led by CEO Joe Cutillo, who emphasizes the role of infrastructure in supporting economic growth and mobility [6]

Shares of Sterling Infrastructure, Inc. (STRL) have soared 47.2% year to date (YTD), significantly outpacing the 21% gain in the Zacks Engineering - R and D Services industry. Additionally, STRL's sector has increased 9.9%, while the S&P 500 has risen 16.9% in the same period. Over the past three years, Sterling's shares have delivered an astonishing total return of 520.9% compared with the S&P 500's modest return of 30.2%. STRL Trades Above 200-Day SMA Additionally, STRL pursues growth through acquisitions ...

Company Overview - Sterling Infrastructure (NASDAQ:STRL) is a specialized construction and engineering company operating in three verticals: e-infrastructure, transportation, and building solutions [2] - The e-infrastructure segment is the largest and fastest growing, generating 48% of total sales, while the transportation segment accounts for 32% of sales with lower operating margins of 6.6% [16] - The building solutions segment, although the smallest at 20% of revenues, is growing with good operating margins of 11.4% [3] Financial Performance - Over the last twenty years, the company has achieved compound annual growth rates (CAGRs) in revenue and EBITDA of 13.8% and 15.4%, respectively [6] - In the last five years, revenue and EBITDA have compounded at rates of 13.7% and 33.9%, respectively [6] - The company's operating cash flow has nearly doubled every two years, providing flexibility for growth investments [7] Growth Opportunities - The global smart infrastructure market is projected to grow at a 23.1% CAGR, reaching nearly $1 trillion by 2032, driven by increased demand for e-infrastructure [21] - The company's backlog of projects totaled $961 million, a 32% increase compared to Q1'23, with data centers contributing significantly to this growth [21] - Management is guiding for FY'24 revenue of $2.125 to $2.215 billion and EBITDA of $285 to $300 million, indicating expectations for continued margin expansion [22] Capital Allocation - Sterling Infrastructure focuses on organic growth initiatives, M&A, and share buybacks, with a preference for margin-accretive deals [23] - The company has a strong balance sheet with cash exceeding total debt, allowing for potential leverage up to 2.5x if opportunities arise [23] Valuation - The company's shares have more than doubled over the past year, with a current EV/EBITDA multiple of 11.2x, which is significantly higher than the 6.0x multiple before 2023 [24][25] - Despite the recent rise in share price, the company is seen as having a favorable valuation given its growth prospects and business mix shift towards higher-margin e-infrastructure [13][25]