Core Insights - The recommendation to take profits on Sterling Infrastructure (NASDAQ: STRL) was made in January 2025 due to stretched valuations and potential headwinds anticipated in the near future [1] - The latest quarterly results released in March provide insights into the company's performance and market position [1] Company Analysis - Sterling Infrastructure is being monitored for its financial health and market dynamics following the profit-taking recommendation [1] - The focus is on high-quality stocks and businesses that exhibit disciplined capital allocation and exceptional returns on capital [1]

Core Viewpoint - Sterling Infrastructure (STRL) has been under scrutiny due to its recent stock performance, which has declined by -11.8% over the past month, compared to the Zacks S&P 500 composite's -4.1% change, and the Zacks Engineering - R and D Services industry's -13.4% decline [2] Earnings Estimates - Sterling Infrastructure is projected to report earnings of $1.28 per share for the current quarter, reflecting a year-over-year increase of +28%. The Zacks Consensus Estimate has risen by +26.7% over the last 30 days [5] - The consensus earnings estimate for the current fiscal year stands at $7.35, indicating a year-over-year change of +20.5%, with a +13.7% increase in estimates over the past month [5] - For the next fiscal year, the consensus earnings estimate is $8.21, representing an +11.8% change from the previous year, with a +16.1% increase in estimates over the past month [6] Stock Rating - Sterling Infrastructure has received a Zacks Rank 1 (Strong Buy), indicating a strong potential for near-term price performance, driven by significant changes in earnings estimates [7] Revenue Growth - The consensus sales estimate for the current quarter is $415.6 million, which indicates a year-over-year decline of -5.6%. For the current and next fiscal years, sales estimates are $2.03 billion and $2.2 billion, reflecting changes of -4.1% and +8.4%, respectively [9] Recent Performance - In the last reported quarter, Sterling Infrastructure achieved revenues of $498.83 million, a year-over-year increase of +2.6%. The EPS for the same period was $1.46, compared to $1.30 a year ago [10] - The reported revenues were below the Zacks Consensus Estimate of $533.75 million, resulting in a revenue surprise of -6.54%. However, the EPS surprise was +8.96%, with the company beating consensus EPS estimates in each of the last four quarters [11] Valuation - Sterling Infrastructure is graded B in the Zacks Value Style Score, indicating that it is trading at a discount compared to its peers [15]

Core Insights - The article compares Sterling Infrastructure (STRL) and Quanta Services (PWR) to determine which stock offers better value for investors [1] Valuation Metrics - STRL has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while PWR has a Zacks Rank of 3 (Hold) [3] - STRL's forward P/E ratio is 18.76, significantly lower than PWR's forward P/E of 25.50 [5] - STRL has a PEG ratio of 1.25, compared to PWR's PEG ratio of 1.93, suggesting STRL may offer better growth relative to its price [5] - STRL's P/B ratio is 4.58, while PWR's P/B ratio is 5.22, indicating STRL is more favorably valued in terms of market value versus book value [6] - STRL's overall Value grade is B, while PWR's Value grade is C, further supporting STRL as the superior value option [6][7] Earnings Outlook - STRL is noted for its improving earnings outlook, which enhances its attractiveness in the Zacks Rank model [7]

Sterling Infrastructure, Inc. (NASDAQ:STRL) Q4 2024 Earnings Call February 26, 2025 9:00 AM ET Company Participants Noelle Dilts - VP, IR and Corporate Strategy Joseph A. Cutillo - CEO Sharon Villaverde - CFO and CAO Conference Call Participants Noah Levitz - William Blair Adam Thalhimer - Thompson Davis Brent Thielman - D.A. Davidson Julio Romero - Sidoti Company Tom Bishop - BI Research Operator Good morning, ladies and gentlemen, and welcome to the Sterling Infrastructure Fourth Quarter and Full Year Web ...

Financial Performance - In 2024, the value of the Company's Backlog was $1.69 billion, down from $2.07 billion in 2023, primarily due to the deconsolidation of a 50% owned subsidiary[34]. - Four customers accounted for 31% of the E-Infrastructure Solutions segment's revenue in 2024, compared to 40% in 2023 and 35% in 2022[27]. - Four state Departments of Transportation accounted for 47% of the Transportation Solutions segment's revenue in 2024, down from 50% in 2023 and 44% in 2022[28]. - Four customers accounted for 36% of the Building Solutions segment's revenue in 2024, compared to 42% in 2023 and 60% in 2022[29]. Workforce and Employment - As of December 31, 2024, the Company had approximately 3,000 employees, with 20% represented by unions[45]. - The Company has a strategic plan for hiring and managing its workforce to address challenges in attracting and retaining personnel[48]. Financial Position - The Company held $664.2 million in cash and cash equivalents as of December 31, 2024[204]. - The Company's variable rate debt under its Credit Facility was $317.2 million as of December 31, 2024, with a potential interest expense fluctuation of approximately $3.2 million per year for a 100-basis point change[204]. - The carrying values of the Company's cash and cash equivalents, accounts receivable, and accounts payable approximate their fair values due to their short-term nature[205]. Operational Challenges - Since 2021, supply chain volatility and inflation have led to price increases in oil, fuel, lumber, concrete, steel, and labor, increasing the Company's operational costs[206]. - Inflation has also raised the Company's general and administrative expenses, negatively impacting financial results[206]. - The Company’s operations are subject to various regulatory requirements, including environmental laws, which may impact future operations and costs[41]. Business Expansion - The Company expanded its residential business into the greater Phoenix area in 2021 and continued this expansion in 2022 with the acquisition of the CCS business[29].

E-Infrastructure Solutions Q4 2024 Earnings Call February 26, 2025 We build and service the infrastructure that enables our economy to run, our people to move, and our country to grow. DISCLOSURE: 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 Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements are ...

Core Viewpoint - Sterling Infrastructure (STRL) reported quarterly earnings of $1.46 per share, exceeding the Zacks Consensus Estimate of $1.34 per share, and showing an increase from $1.30 per share a year ago, representing an earnings surprise of 8.96% [1][2] Financial Performance - The company posted revenues of $498.83 million for the quarter ended December 2024, which was 6.54% below the Zacks Consensus Estimate, compared to $485.98 million in the same quarter last year [2] - Over the last four quarters, Sterling Infrastructure has surpassed consensus EPS estimates four times but has only topped consensus revenue estimates once [2] Stock Performance - Sterling Infrastructure shares have declined approximately 35.5% since the beginning of the year, while the S&P 500 has gained 1.7% [3] - The current consensus EPS estimate for the upcoming quarter is $1.01 on revenues of $419.4 million, and for the current fiscal year, it is $6.46 on revenues of $2.07 billion [7] Industry Outlook - The Engineering - R and D Services industry, to which Sterling Infrastructure belongs, is currently ranked in the bottom 32% of over 250 Zacks industries, indicating potential challenges ahead [8] - Empirical research suggests a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Sterling Infrastructure's stock performance [5][6]

Core Insights - Sterling Infrastructure, Inc. has been awarded two significant transportation projects, highlighting the attractive opportunities in the Rocky Mountain and Arizona regions [1][6] - The CEO emphasized the technical capabilities and execution quality of the Ralph L. Wadsworth subsidiary, reinforcing its reputation as a trusted partner for highway and bridge work [1][3] Company Overview - Sterling operates through various subsidiaries across three segments: E-Infrastructure, Transportation, and Building Solutions, primarily in the Southern, Northeastern, Mid-Atlantic, Rocky Mountain regions, and the Pacific Islands [2] - E-Infrastructure Solutions focus on large-scale site development for manufacturing, data centers, and power generation [2] - Transportation Solutions encompass infrastructure projects for highways, roads, bridges, and airports [2] - Building Solutions include concrete foundations for residential and commercial projects, plumbing services, and surveys for new builds [2] - The company is committed to sustainability and improving society's quality of life through responsible operations [2] Project Details - The I-15 1800 North Interchange project in Utah has a total value of $195 million, with RLW holding a 60% interest, expected to begin in spring 2025 and continue through late 2027 [6] - The I-25 North Corridor project in Colorado is valued at $86 million, with RLW's share at 51%, marking the next phase of a multi-year project that started pre-construction activities in 2018 [6]

Financial Performance - For the full year 2024, revenue increased by 7% to $2.00 billion, with net income of $257.5 million, or $8.27 per diluted share, compared to $138.7 million, or $4.44 per diluted share, in 2023[4] - Adjusted net income for 2024 rose by 36.3% to $189.9 million, or $6.10 per diluted share, while EBITDA increased by 59% to $410.9 million[4] - In Q4 2024, revenues were $498.8 million, a 3% increase, with net income of $113.2 million, representing a 182% increase[6] - Gross profit for the year ended December 31, 2024, was $426.1 million, up 26.2% from $337.6 million in 2023[24] - Net income attributable to Sterling common stockholders for the year was $257.5 million, a 85.5% increase compared to $138.7 million in 2023[24] - Operating income for 2024 was $264.62 million, up 28.6% from $205.80 million in 2023[32] - Adjusted net income attributable to Sterling common stockholders for Q4 2024 was $45.49 million, compared to $40.58 million in Q4 2023, reflecting a 2.2% increase[36] - Basic net income per share for Q4 2024 was $3.69, significantly higher than $1.30 in Q4 2023[36] Revenue Segments - E-Infrastructure revenue increased by 8% year-over-year, driven by a more than 50% increase in data center-related revenue[9] - Transportation Solutions revenue increased by 24% for the full year, with operating margins at 6.5%[10] - E-Infrastructure Solutions segment revenues increased to $234.0 million in Q4 2024, accounting for 47% of total revenues, up from 45% in Q4 2023[26] - E-Infrastructure Solutions segment generated $923.73 million in revenue for 2024, accounting for 49.2% of total revenues[32] - Transportation Solutions segment revenue for 2024 was $547.78 million, up 25.1% from $437.85 million in 2023[32] Guidance and Projections - For 2025, the company expects revenue guidance of $2.00 billion to $2.15 billion, with adjusted net income guidance of $252 million to $267 million[13] - The midpoint of 2025 guidance indicates a projected 10% revenue growth and 18% growth in adjusted net income and adjusted EBITDA[11] - Full year 2025 guidance for net income attributable to Sterling common stockholders is projected between $215 million and $230 million, compared to $257.461 million in 2024[40] - Adjusted net income per share for 2025 is expected to be between $7.90 and $8.40, compared to $7.09 in 2024[40] Cash Flow and Assets - Cash flows from operations totaled $497.1 million for the twelve months ended December 31, 2024, with cash and cash equivalents at $664.2 million[6] - Cash and cash equivalents at the end of Q4 2024 were $664.2 million, a 40.7% increase from $471.6 million at the end of Q4 2023[28] - Total assets grew to $2.02 billion in Q4 2024, up from $1.78 billion in Q4 2023, reflecting a 13.6% increase[28] Backlog and Future Work - The combined backlog at December 31, 2024, was $1.83 billion, with E-Infrastructure Solutions backlog growing by 27% to over $1 billion[8] - The backlog excluding RHB for Q4 2024 was $1,693.22 million, a 4.5% increase from $1,661.22 million in Q4 2023[34] - The combined backlog excluding RHB for Q4 2024 was $1,831.14 million, showing stability compared to $1,808.89 million in Q4 2023[34] Costs and Expenses - The company reported acquisition-related costs of $421,000 for the twelve months ended December 2024, down from $873,000 in the previous year[36] - Non-cash stock-based compensation for 2024 was $19.003 million, with a consistent guidance of $20 million for 2025[40] - Acquisition related costs for 2024 were $5.177 million, with guidance remaining at $5 million for 2025[40] Other Financial Metrics - Operating income for Q4 2024 was $62.3 million, representing a 12.5% margin, compared to $55.8 million and an 11.5% margin in Q4 2023[26] - Total liabilities increased to $1.19 billion in Q4 2024, compared to $1.15 billion in Q4 2023, indicating a 3.0% rise[28] - The company reported a gain on deconsolidation of subsidiary of $91.3 million for the year, contributing significantly to net income[24] - The company incurred a gain on deconsolidation of subsidiary of $91.289 million in 2024, which will not be included in the adjusted net income for 2025[40] - Depreciation and amortization for the full year 2024 was $68 million, with guidance for 2025 set between $76 million and $81 million[42] - The weighted average diluted shares outstanding increased from 31,146 in 2024 to a projected 32,000 in 2025[40]

Core Viewpoint - Sterling Infrastructure, Inc. reported strong financial results for the full year 2024, with significant increases in revenue, net income, and EBITDA, while providing optimistic guidance for 2025. Financial Performance - For the full year 2024, revenue increased by 7% to $2.12 billion compared to 2023 [4] - Net income for 2024 was $257.5 million, or $8.27 per diluted share, up from $138.7 million, or $4.44 per diluted share in 2023, representing an increase of 86% [4] - Adjusted net income rose by 36.3% to $189.9 million, or $6.10 per diluted share in 2024, compared to $139.3 million, or $4.46 per diluted share in 2023 [4] - EBITDA increased by 59% to $410.9 million in 2024, compared to $259.0 million in 2023 [4] - Adjusted EBITDA grew by 23% to $320.0 million in 2024, compared to $259.9 million in 2023 [4] Segment Performance - E-Infrastructure Solutions revenue increased by 8% year-over-year, with data center-related revenue rising over 50% [8] - Transportation Solutions revenue increased by 24% for the full year, although it faced a decline in the fourth quarter due to challenging comparisons [9] - Building Solutions saw a modest revenue increase of 1.1% for the full year, but a decline of 3% in the fourth quarter [10] Backlog and Guidance - The combined backlog at year-end 2024 was $1.83 billion, slightly up from the previous year [7] - E-Infrastructure Solutions backlog grew by 27% year-over-year, exceeding $1 billion [7] - For 2025, the company expects revenue growth of 10%, adjusted net income growth of 18%, and adjusted EBITDA growth of 18% [10] Cash Flow and Financial Position - Operating cash flow for the full year 2024 was nearly $500 million, with a net cash position of $348 million [6] - Cash and cash equivalents at the end of 2024 totaled $664.2 million, up from $471.6 million at the end of 2023 [28] CEO Remarks - The CEO highlighted the record performance in 2024, with a focus on margin expansion and profitability growth exceeding revenue growth [6] - The company is optimistic about continued growth in 2025, driven by strategic shifts towards higher-margin service offerings [6]