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Can Sterling Continue to Maintain Its 29% EPS Growth in 2025?

Core Insights - Sterling Infrastructure, Inc. (STRL) is focusing on large-scale mission-critical projects, particularly data centers, which are enhancing its revenue visibility and bottom line [1][2] - The favorable market conditions for public infrastructure demand, supported by government initiatives like the Infrastructure Investment and Jobs Act (IIJA), CHIPS Act, and Inflation Reduction Act (IRA), are driving STRL's strategic shift [1] - STRL's earnings per share (EPS) growth is strong, with a reported 29.4% year-over-year increase in Q1 2025, and an adjusted operating margin expansion of 618 basis points [1] Financial Performance - The E-Infrastructure segment's backlog grew by 27% year-over-year to $1.2 billion, with data center-related work constituting over 65% of this backlog [2] - STRL's total backlog reached $2.13 billion at the end of Q1 2025 [2] - The company raised its 2025 adjusted EPS guidance to a range of $8.40-$8.90, reflecting an 18.5-25.5% year-over-year growth [3] Analyst Sentiment - Analysts are bullish on STRL due to increased public infrastructure demand, with 2025 earnings estimates trending upward to $8.61 per share, indicating a 41.2% year-over-year growth [4][7] - EPS estimates for the second, third, and fourth quarters of 2025 suggest year-over-year growth rates of 35.3%, 32.5%, and 43.8%, respectively [5] Market Position - STRL shares are performing well, gaining 35.7% year-to-date, outperforming the Zacks Engineering - R and D Services industry and the broader S&P 500 index [11] - The stock is trading at a forward 12-month price-to-earnings (P/E) ratio of 25.32X, indicating a premium valuation compared to industry peers, reflecting strong market potential [12]