Great Lakes Dredge & Dock Stock Climbs 12% in a Month: Buy or Fold?

Core Insights - Great Lakes Dredge & Dock Corporation (GLDD) has seen a stock performance increase of 12.3% over the past month, outperforming the Zacks Building Products - Heavy Construction industry, the broader Construction sector, and the S&P 500 Index [2][9] - The company is benefiting from solid backlog growth driven by large-scale projects, disciplined bidding, and efficient project execution, positioning it well for long-term growth despite macroeconomic challenges [3][23] Backlog and Project Opportunities - GLDD's operations focus on complex port deepening, LNG-related dredging, and coastal resilience projects, supported by increased public infrastructure spending in the US [6] - The maintenance backlog grew year-over-year by 53.9% to $147.6 million, reflecting the company's disciplined bidding approach [6][9] Fleet Modernization - The company has been investing in a multi-year fleet modernization strategy, welcoming its sixth hopper dredge, Amelia Island, in Q3 2025, enhancing its operational capabilities [10] - The construction of the Acadia, a US-flagged subsea rock installation vessel, is expected to expand GLDD's market into offshore energy and subsea infrastructure protection, with the vessel fully booked for 2026 [11] Margin Improvement - GLDD's adjusted EBITDA margin expanded by 310 basis points year-over-year to 20.2% during the first nine months of 2025, driven by effective project execution and a favorable project mix [12][13] - The gross margin also increased by 380 basis points year-over-year to 23.7%, indicating structural improvements in profitability [13] Competitive Position - GLDD occupies a specialized competitive position with strong demand for coastal resilience and offshore energy services, facing competition primarily from Orion Group Holdings, EMCOR Group, and Limbach Holdings [19][20] - GLDD's modern fleet and project execution capabilities provide it with an operational advantage over competitors in certain project types [20][22] Investment Outlook - GLDD's favorable public infrastructure backdrop, disciplined execution, and high-quality backlog provide strong revenue visibility and support high fleet utilization [23] - The stock is currently trading at a discounted forward P/E ratio of 12.18, making it an attractive investment option despite some uncertainty in earnings estimates [14][24]