ZACKS·2025-11-19 15:36Core Insights - The U.S. infrastructure and energy transition sectors are experiencing significant growth, benefiting companies in engineering and construction services, particularly Sterling Infrastructure, Inc. (STRL) and Quanta Services, Inc. (PWR) [1][2] Company Strategies - Sterling is focusing on large-scale site development related to data centers, reshoring-driven manufacturing, and major logistics facilities [1] - Quanta is expanding its utility, grid, and renewable infrastructure platform through an integrated solutions model [1] Sterling Infrastructure, Inc. (STRL) - STRL's E-Infrastructure segment is the primary growth driver, with revenues reaching $417.1 million, a 58% increase year-over-year, and data center revenues rising over 125% [3][4] - The total backlog for STRL is $2.6 billion, up 64% from the previous year, with E-Infrastructure Solutions accounting for $1.8 billion, reflecting a 97% year-over-year increase [5] - STRL anticipates strong momentum in data centers, manufacturing, and e-commerce projects through 2026, raising full-year guidance for revenues and earnings [7] Quanta Services, Inc. (PWR) - PWR's Electric segment generated revenues of $6.17 billion, a 17.9% increase year-over-year, accounting for 80.9% of total revenues [10] - PWR's backlog reached $39.2 billion, up from $33.96 billion the previous year, indicating strong demand across utility and renewable markets [11] - PWR expects continued strong demand in utility, renewable, and technology sectors, supporting ongoing investment in infrastructure [13] Stock Performance & Valuation - STRL's share price has outperformed PWR and the Zacks Engineering - R and D Services industry over the past three months [14] - STRL is trading below PWR on a forward 12-month price-to-earnings (P/E) ratio basis, indicating a premium valuation for STRL compared to PWR's discounted valuation [16][18] Earnings Estimates - The Zacks Consensus Estimate for STRL's 2025 EPS indicates a 56.9% year-over-year growth, while PWR's estimates imply improvements of 17.8% for 2025 [19][21] - STRL's EPS estimates have remained unchanged over the past 60 days, reflecting stability in growth expectations [20][21] Investment Outlook - STRL shows faster momentum and stronger stock performance, appealing to investors seeking higher growth potential [22] - PWR offers stability and broad exposure to utility and renewable infrastructure, suitable for investors looking for steady long-term returns [22][23]