Core Insights - Mergers and acquisitions (M&A) activity has shown notable fluctuations post-COVID, but there are signs of recovery in the market, with Sterling Infrastructure (STRL) making significant moves recently [1][7] Company Acquisition - Sterling Infrastructure announced the acquisition of Texas-based CEC Facilities Group, LLC for a total of $505 million, which includes $450 million in cash and $55 million in STRL stock [2] - The CEO of STRL, Joe Cutillo, emphasized that the combination of CEC's electrical services and Sterling's civil infrastructure services will enhance project timelines and customer value [2] - Following the acquisition announcement, STRL shares increased significantly, rising over 30% year-to-date and outperforming the S&P 500 [2] Strategic Focus - CEC will be integrated into Sterling's E-Infrastructure Solutions segment, aimed at enhancing its capabilities in data centers amid the growing AI market [4] - The E-Infrastructure Solutions segment provides advanced site development services for various sectors, including manufacturing and power generation [4] Financial Impact - The acquisition is expected to be immediately accretive to STRL's earnings, with contributions anticipated to begin in 2025 [5] - Prior to the acquisition news, STRL was already in a strong position, holding a Zacks Rank 2 (Buy), with rising EPS expectations [5]

Core Insights - Sterling Infrastructure, Inc. (STRL) is experiencing significant growth in e-infrastructure demand, reporting an 18% year-over-year revenue increase in its E-Infrastructure Solutions segment, with adjusted operating income rising 61% and margins expanding by over 600 basis points to 23% [1][9] - The company has a record e-infrastructure backlog of $1.2 billion and future-phase visibility nearing $2 billion, indicating strong demand and execution capabilities [2][9] - Management anticipates mid-to-high teens revenue growth for the E-Infrastructure segment in 2025, supported by trends in AI, e-commerce, and digital infrastructure [3] Financial Performance - Sterling reported adjusted earnings per share (EPS) of $1.63, a 29% increase year-over-year, and adjusted EBITDA rose 31% to $80 million [2][9] - The company’s pricing model mitigates risks from raw material and fuel cost fluctuations, helping to preserve margins [2] Competitive Landscape - Sterling faces competition from Quanta Services and EMCOR Group, both of which are also targeting high-growth sectors like data centers and semiconductors [4][7] - Quanta Services is expanding into data center development and grid modernization, while EMCOR focuses on mechanical and electrical construction in mission-critical environments [5][6] Market Position - Sterling's stock has surged 72% in the past three months, outperforming the Zacks Engineering - R and D Services industry, which rose 24.6% [8] - The company is currently trading at a price-to-earnings ratio of 22.7X, above the industry average of 20.54X [11] Future Outlook - The Zacks Consensus Estimate for Sterling's EPS indicates year-over-year growth of 40.3% for 2025 and 9.7% for 2026, reflecting positive market sentiment [12]

Summary of Sterling Infrastructure (STRL) Conference Call on CEC Acquisition Company and Industry - **Company**: Sterling Infrastructure (STRL) - **Acquisition Target**: CEC Facility Services, LLC - **Industry**: Electrical contracting, specifically in mission-critical sectors such as data centers, semiconductors, and advanced manufacturing Core Points and Arguments 1. **Strategic Rationale for Acquisition**: The acquisition of CEC is aimed at enhancing Sterling's e-infrastructure segment by adding electrical and mechanical services, which are crucial for high-growth, mission-critical markets [5][6][10] 2. **CEC's Market Position**: CEC is a leading non-union electrical contractor with over 80% of its sales derived from mission-critical markets, including major clients like Texas Instruments, Samsung, Intel, and Meta [10][14] 3. **Transaction Details**: The total upfront consideration for the acquisition is $505 million, comprising $450 million in cash and $55 million in Sterling common stock, representing a 9.6x multiple on CEC's estimated 2025 EBITDA [8][9] 4. **Growth Projections**: CEC is expected to generate revenues of approximately $390 million to $415 million in 2025, reflecting a 12% year-over-year growth, with an EBITDA margin of 13% [14][15] 5. **Operational Synergies**: The combination of Sterling and CEC is anticipated to improve project execution, accelerate timelines, and enhance customer relationships, allowing for a more integrated service offering [8][15] 6. **Backlog and Visibility**: CEC's contracted backlog and future opportunities are approximately 1.9 times their 2025 revenue expectations, indicating strong demand and visibility into future projects [14][40] 7. **Management Continuity**: CEC's founder, Ray Waddell, will remain in a strategic leadership role, ensuring continuity and leveraging his expertise for growth [13] Additional Important Insights 1. **Geographic Expansion**: CEC has a strong presence in Texas and is expanding into the Rocky Mountain and Southeast regions, which aligns with Sterling's growth strategy [11][19] 2. **Service Revenue Potential**: CEC's service revenue, primarily from maintenance and retrofitting, is expected to grow, providing a recurring revenue stream that enhances long-term value [58][59] 3. **Future M&A Opportunities**: Sterling is open to pursuing additional smaller acquisitions in the electrical contracting space to further enhance capabilities and geographic reach [42][43] 4. **Customer Demand**: Customers have expressed a desire for integrated electrical and mechanical services, which positions Sterling to capture more attractive projects in the semiconductor and data center sectors [54][55] This summary encapsulates the key points discussed during the conference call regarding Sterling Infrastructure's acquisition of CEC Facility Services, highlighting the strategic fit, financial expectations, and future growth opportunities.

STERLING TO ACQUIRE CEC FACILITIES GROUP June 17, 2025 Cautionary Statement Regarding Forward-Looking Statements This presentation contains, and the officers and directors of the Company may from time to time make, statements that are considered forward-looking statements within the meaning of the federal securities laws. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond our control, which may include statements about: the financial estimates or pr ...

Investors interested in stocks from the Engineering - R and D Services sector have probably already heard of Amentum Holdings (AMTM) and Sterling Infrastructure (STRL) . But which of these two stocks presents investors with the better value opportunity right now? Let's take a closer look.We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The Zacks Rank favors stocks with strong earnings est ...

Market Overview - All three major U.S. stock market indices fell by more than 1% on June 13 due to missile strikes between Israel and Iran, impacting global stock markets negatively [1] - Investors are concerned that these geopolitical tensions could lead to increased oil prices and upward pressure on global commodity prices [1] Investment Recommendations - Suggested low-leverage stocks for safeguarding portfolios during market turmoil include Novartis (NVS), The Ensign Group (ENSG), MasTec (MTZ), Bilibili (BILI), and Sterling Infrastructure, Inc. (STRL) [2][10] - These stocks are characterized by low leverage, making them potentially safer options for investors [2][10] Understanding Leverage - Leverage refers to the practice of borrowing capital for operations and expansion, typically through debt financing [4] - Excessive debt financing can lead to significant losses, hence the importance of selecting companies with low debt levels [5][6] Debt-to-Equity Ratio Analysis - The debt-to-equity ratio is a key metric indicating a company's financial risk, with a lower ratio reflecting better solvency [7] - High debt-to-equity ratios can turn favorable earnings into losses during economic downturns [8] Stock Selection Strategy - A prudent investment strategy involves choosing stocks with low debt-to-equity ratios to ensure steady returns [9] - Additional screening criteria include being less leveraged than industry peers, trading at a minimum price of $10, having substantial trading volume, and showing positive earnings growth expectations [12][13] Company Highlights - **Novartis (NVS)**: Reported a 7.1% improvement in 2025 sales estimates and has a long-term earnings growth rate of 7.9%, currently holding a Zacks Rank 2 [15][16] - **The Ensign Group (ENSG)**: Anticipates a 15% year-over-year sales improvement in 2025, with a long-term earnings growth rate of 15% and a Zacks Rank 2 [17][18] - **MasTec (MTZ)**: Achieved a 6% year-over-year revenue increase and expects an 11% sales improvement in 2025, with a significant earnings growth estimate of 53.7% [19] - **Bilibili (BILI)**: Experienced a 24% revenue increase year-over-year and anticipates an 11.3% sales improvement in 2025, with a Zacks Rank 2 [20] - **Sterling Infrastructure (STRL)**: Reported a 7% revenue increase and a 29% surge in adjusted earnings per share, with a long-term earnings growth rate of 15% [21][22]

Most of us have heard the dictum "the trend is your friend." And this is undeniably the key to success when it comes to short-term investing or trading. But it isn't easy to ensure the sustainability of a trend and profit from it.The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock alive.Inves ...

THE WOODLANDS, Texas, June 12, 2025 /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or "the Company") today announced the appointment of Nicholas (Nick) Grindstaff to the role of Chief Financial Officer (CFO), effective July 10, 2025. Grindstaff is succeeding Ron Ballschmiede, who served as Sterling's Executive Vice President, CFO and CAO from November 2015 through May 2024, and as Interim CFO from March 2025.Grindstaff brings over 30 years of finance and leadership experience to ...

Key Takeaways STRL's E-Infrastructure segment revenues rose 18% in Q1 2025, fueled by strong data-center demand. Data-center work now makes up over 65% of STRL's E-Infrastructure backlog, boosting revenue visibility. Backlog gross margin rose to 17.7% from 16.7%, led by higher-margin E-Infrastructure project growth.Sterling Infrastructure, Inc. (STRL) has steadily carved out a strong position in the data-center construction space, capitalizing on growing demand for E-Infrastructure projects. The company’s ...

Core Insights - Sterling Infrastructure, Inc. (STRL) has experienced a significant stock price increase of 65.4% over the past three months, outperforming the Zacks Engineering - R and D Services industry growth of 24.8%, the broader Construction sector's increase of 4.2%, and the S&P 500 Index's rise of 3.1% [1][2][3] E-Infrastructure Segment Performance - The E-Infrastructure segment is the largest and most profitable business line for the company, contributing 44% of total revenues in 2024, with an 18% revenue increase in Q1 driven by strong data center demand and project backlog [8][6] - Demand in the data center market surged approximately 60%, with mission-critical work representing over 65% of the segment's backlog, indicating sustained demand visibility [8][6] Backlog and Future Growth - The company's backlog reached $2.1 billion, reflecting a 17% year-over-year increase, supported by a 27% rise in the E-Infrastructure Solutions backlog to $1.2 billion [10][11] - The strong backlog is expected to support steady earnings growth, with nearly $2 billion in E-Infrastructure projects anticipated from both signed backlog and future phase work [11] Inorganic Growth Strategy - The company is pursuing growth through acquisitions, including the recent acquisition of Drake Concrete for $25 million, expected to add $55 million in revenues and $6.5 million in EBITDA in 2025 [12][13] - The acquisition aims to enhance the company's geographic reach and customer base, with a focus on further acquisitions in the e-infrastructure and Building Solutions segments [15] Transportation Segment Outlook - The Transportation segment is expected to show stable progress, supported by a strong backlog and steady bid activity, with revenue growth anticipated in the mid-single digits for 2025 [16][17] Earnings Estimates and Valuation - Earnings estimates for 2025 have been revised upward to $8.45 from $8.21, indicating a growth of 38.5% year-over-year, while peers like AECOM, Fluor, and KBR are expected to see lower growth rates [19] - The company is currently trading at a premium relative to its industry and historical metrics, with a forward 12-month price-to-earnings (P/E) ratio above the five-year average [20][22]