Dycom Jumps 39% in 3 Months: Should You Buy, Sell or Hold the Stock?

Core Viewpoint - Dycom Industries, Inc. has shown strong stock performance, significantly outperforming its industry and the broader market over the past three months, with a stock price increase of 38.9% compared to the industry's 11.5% growth [1][5]. Financial Performance - In the first quarter of fiscal 2026, Dycom reported adjusted earnings and contract revenues that exceeded the Zacks Consensus Estimate, with a year-over-year revenue increase of 10.2% driven by strong contributions from AT&T and other customers [2]. - The company's backlog at the end of the fiscal first quarter reached $8.127 billion, up from $7.760 billion at the end of fiscal 2025 and $6.364 billion in the first quarter of fiscal 2025, with $4.685 billion projected to be completed in the next 12 months [11]. Growth Drivers - Dycom is experiencing growth in fiber-to-the-home projects and maintenance contracts, benefiting from customers increasing or reconfirming fiber deployment targets [10]. - The company is expanding its work with hyperscalers by connecting fiber networks and data centers, which opens new markets and enhances its digital infrastructure services [12]. - The service and maintenance segment is a steady source of recurring revenues, with significant new contracts secured during the quarter [14]. Market Position and Valuation - Dycom's stock 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 [17]. - The company's P/E ratio is higher than some industry peers, such as MasTec, EMCOR, and Fluor, which trade at 23.28X, 19X, and 15.67X, respectively [19]. Challenges - Ongoing tariffs and trade tensions pose risks for equipment costs and project margins, with expected increases in costs for offshore-sourced equipment components [20]. - Despite these challenges, Dycom's focus on fiber-to-the-home and hyperscaler initiatives supports long-term growth visibility [21].