Core Viewpoint - Sterling Infrastructure, Inc. (STRL) is expected to report its second-quarter 2025 results on August 4, with a focus on its performance in e-infrastructure, building solutions, and transportation solutions sectors [1]. Financial Performance - In the last reported quarter, Sterling achieved adjusted earnings per share (EPS) of $1.63, reflecting a 29% year-over-year growth, and adjusted EBITDA increased by 31% to $80 million [2]. - Revenues for the last quarter were $430.9 million, surpassing estimates and showing a 7% growth on a pro-forma basis, despite a reported year-over-year decline due to a joint venture accounting change [2]. - The gross margin expanded by 450 basis points to 22%, indicating operational efficiencies and a favorable project mix [2]. Earnings Estimates - The Zacks Consensus Estimate for the upcoming second-quarter EPS is $2.26, suggesting a 35.3% growth from the previous year, while the revenue estimate is $555.1 million, indicating a 4.8% year-over-year decline [6][7]. - For the full year 2025, STRL is projected to register a 41.2% EPS growth compared to the previous year [5]. Segment Performance - The E-Infrastructure Solutions segment, which accounted for 51% of first-quarter 2025 revenues, is expected to remain a key growth driver, benefiting from stable demand and rising data center activity [11]. - The Transportation Solutions segment, contributing 28% to total revenues, is anticipated to support growth due to a strong backlog and steady bid activity [12]. - The Building Solutions segment, which made up 21% of revenues, is expected to face mixed conditions, with some benefits from recent acquisitions and steady activity in core regions [13]. Market Conditions - The company is likely to experience pressures from residential market softness, inflation, and broader market volatility, which may impact top-line performance [14]. - Despite these challenges, Sterling's focus on high-value infrastructure projects and disciplined project execution is expected to support margin improvement [15]. Stock Performance - Year-to-date, STRL shares have gained 58.8%, outperforming the Zacks Engineering - R and D Services industry and the S&P 500 [16]. - The current forward 12-month price-to-earnings (P/E) ratio for STRL is 29.37, which is a 30.3% premium to the industry average of 22.54 [18]. Strategic Outlook - The company is positioned for growth through 2025, supported by solid execution, a favorable project mix, and a strong backlog, despite anticipated near-term challenges [22].
STRL Gears Up to Post Q2 Earnings: Buy or Hold Ahead of Results?