Sterling Infrastructure(US:STRL) ZACKSยท2025-07-25 15:25Core Insights - Sterling Infrastructure, Inc. (STRL) is focusing on enhancing its modular construction capabilities and pursuing inorganic growth through mergers and acquisitions, driven by increasing market demand for data centers, AI infrastructure, and utility grid modernization [1][3] Group 1: Business Operations and Market Trends - The E-Infrastructure Solutions segment, which includes modular buildings and data centers, accounted for 51% of STRL's revenues in the first quarter of 2025, with a backlog growth of 27% year-over-year to $1.2 billion, where over 65% is related to data center projects [2][7] - STRL is actively pursuing strategic investments in mergers and acquisitions, recently announcing a definitive agreement to acquire CEC Facilities Group, LLC for $505 million, which is expected to enhance its market reach and cross-selling opportunities in Texas and other key regions [3][7] Group 2: Financial Performance and Projections - For 2025, STRL anticipates capital expenditures between $70 million and $80 million, an increase from $70.8 million in 2024, which is expected to improve revenue visibility and profit structure [4] - STRL's earnings per share (EPS) for 2025 is forecasted to grow by 41.2% to $8.61, with further growth of 10.1% to $9.48 in 2026 [12] Group 3: Stock Performance and Valuation - STRL's stock has surged 69% in the past three months, outperforming competitors in the Zacks Engineering - R and D Services industry and the broader market [5][8] - The stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 27.78, indicating a premium valuation compared to industry peers, suggesting strong market potential [9][11]