This Construction Stock Has Nearly Tripled This Year. Can It Keep Gaining in 2025?

Core Viewpoint - Tutor Perini has experienced significant stock price appreciation in 2024, driven by strong demand in the construction sector, government infrastructure spending, and expectations of lower borrowing costs due to potential Fed rate cuts [2][3]. Company Performance - Tutor Perini's revenue grew by 14% year-to-date, reaching $3.26 billion, despite reporting losses primarily due to legal disputes [5]. - The company's backlog increased by 35% sequentially to $14 billion, surpassing the previous record of $11.6 billion set in 2019, indicating a recovery from earlier slowdowns [4][5]. - The company anticipates a return to profitability in 2025, with projected earnings growth in subsequent years [5]. Market Position - Tutor Perini's market capitalization stands at $1.3 billion, with a price-to-sales (P/S) ratio of 0.3, suggesting potential leverage if the company meets its profit expectations [6]. - The stock price surged by 10% following the Q3 earnings report, reflecting investor satisfaction with the backlog increase [6]. Future Outlook - The Wall Street consensus projects adjusted earnings per share of $1.92 for 2025, resulting in a forward price-to-earnings (P/E) ratio of 12.8, which is favorable for a cyclical stock [6]. - The company has secured several significant projects, including a $1.66 billion mass-transit project in Hawaii and a $1.1 billion water conveyance tunnel in New York, contributing to a backlog equivalent to approximately 3.5 years of revenue [5]. - Continued growth in the backlog is expected into 2025, contingent on a stable economy and resolution of legal disputes [6].