Granite Wins $88M Project From Caltrans, Boosts CAP Growth

Project Details - Granite Construction Incorporated (GVA) has been awarded an $88 million project by the California Department of Transportation (Caltrans) to improve a portion of Ortega Highway State Route 74 (SR 74) [1] - The project will be funded by state and federal sources, with construction expected to begin in April 2025 and be completed by November 2026 [1] - GVA will include this project in its first quarter of 2025 Committed and Awarded Projects (CAP) [1] Work Scope - The project involves widening shoulders and roadways, installing centerline and edge line rumble strips, and resurfacing the highway to improve safety and efficiency [2] - These enhancements will provide vehicle buffer room, significantly improving safety on the narrow two-lane mountainous highway [2] Strategic Importance - The contract builds on Granite's ongoing efforts on this stretch of highway over the past few years, aligning with its strategic goal of expanding its footprint in the Inland Empire of Southern California [3] - Granite is focusing on growing a high-quality CAP portfolio, leveraging positive public funding and a resilient private market to deliver larger projects while minimizing risk [3] CAP Growth - During the third quarter of 2024, Granite added $44 million to its CAP, bringing the total to $5.6 billion, a $44 million sequential increase and a $35 million year-over-year increase [4] - Best-value projects represented 42% ($2.4 billion) of the company's CAP at the end of the quarter, an increase of $31 million from the year-ago quarter [4] Best-Value Projects - Best-value projects include construction manager, general contractor, and progressive design builds, which Granite believes are more efficiently constructed and have a solid growth trajectory [5] Stock Performance - GVA's shares have gained 39.9% in the past six months, slightly below the Zacks Building Products - Heavy Construction industry's 41.8% growth [7] - The company believes strong opportunities across public and private markets will likely foster growth in the upcoming period [8] Industry Comparison - Weyerhaeuser Company (WY) has a Zacks Rank 1 (Strong Buy) and delivered a trailing four-quarter earnings surprise of 41.6% on average, with a 1.6% loss in the past six months [10] - Frontdoor, Inc. (FTDR) has a Zacks Rank 1 and delivered a trailing four-quarter earnings surprise of 269% on average, with a 57.7% gain in the past six months [10] - MasTec, Inc. (MTZ) has a Zacks Rank 2 (Buy) and delivered a trailing four-quarter earnings surprise of 40.2% on average, with a 53.8% gain in the past six months [11]