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Granite Construction (GVA)
NYSE:GVA
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Granite Construction
(NYSE:GVA)
76Outperform
Granite Construction (GVA) vs. S&P 500 (SPY)
Market Cap
$3.37B
Dividend Yield0.67%
Average Volume (3M)828.94K
Price to Earnings (P/E)32.3
Beta (1Y)1.39
Revenue Growth14.20%
EPS Growth191.86%
CountryUS
Employees2,300
SectorIndustrials
Sector Strength70
IndustryEngineering & Construction
Share Statistics
EPS (TTM)2.35
Shares Outstanding43,434,580
10 Day Avg. Volume801,123
30 Day Avg. Volume828,940
Financial Highlights & Ratios
PEG Ratio0.17
Price to Book (P/B)N/A
Price to Sales (P/S)0.83
Price to Cash Flow (P/CF)4.80
P/FCF Ratio4.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$108.00Price Target Upside37.46% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
Granite Construction Business Overview & Revenue Model
Company DescriptionGranite Construction Incorporated (GVA) is a leading infrastructure company based in the United States. It operates in the heavy civil construction and environmental sectors, providing services such as construction of roads, highways, tunnels, bridges, airports, and other infrastructure projects. The company also engages in site preparation, mining, and construction management services, aiming to deliver integrated infrastructure solutions to both public and private sector clients.
How the Company Makes MoneyGranite Construction makes money primarily through its construction and construction materials segments. The construction segment generates revenue by securing contracts for infrastructure projects, often through competitive bidding processes. These projects can be long-term and involve complex engineering and construction work, contributing significantly to the company's earnings. The construction materials segment involves the production and sale of aggregates, asphalt, and other materials, which supports its construction projects and also serves external customers. Key revenue streams include government infrastructure contracts, commercial building projects, and private sector developments. Partnerships with government agencies, local municipalities, and private developers play a crucial role in securing continuous project opportunities and revenue growth for the company.
Granite Construction Financial Statement Overview
Summary
Granite Construction exhibits strong financial health with notable improvements in revenue, profit margins, and cash flow generation. The elimination of debt significantly enhances its balance sheet, though the lack of reported stockholder equity presents a potential risk. Overall, the company is on a positive trajectory with strengthened operational efficiency and cash management.Income Statement
Granite Construction has demonstrated strong revenue growth of 14.2% from 2023 to 2024, alongside an impressive increase in gross profit margin to 14.3%. Additionally, the net profit margin improved significantly to 3.2% in 2024. The EBIT and EBITDA margins have also strengthened, indicating improved operational efficiency. However, historical volatility in net income suggests potential risks which should be monitored.82
Very Positive
Balance Sheet
The company's debt-to-equity ratio improved significantly as total debt was eliminated by 2024, reflecting a strong deleveraging effort. However, the equity ratio is compromised due to zero reported stockholder equity, indicating potential risks in financial stability despite the high cash reserves.75
Positive
Cash Flow
Granite Construction has shown robust cash flow performance with a remarkable increase in operating cash flow to net income ratio, reflecting efficient cash generation relative to earnings. Free cash flow improved substantially, demonstrating strong cash management and operational efficiency. The positive free cash flow growth rate further enhances the company's financial flexibility.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.01B | 3.51B | 3.30B | 3.01B | 3.56B | Gross Profit |
| 572.70M | 396.40M | 369.49M | 305.56M | 344.79M | EBIT |
| 207.36M | 80.06M | 85.38M | -23.00M | 7.55M | EBITDA |
| 351.71M | 170.59M | 153.53M | 67.33M | -29.30M | Net Income Common Stockholders |
| 126.35M | 43.60M | 83.30M | -8.26M | -166.18M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 726.57M | 624.76M | 517.17M | 585.56M | 624.93M | Total Assets |
| 3.03B | 2.81B | 2.17B | 2.49B | 2.38B | Total Debt |
| 832.85M | 735.09M | 320.55M | 372.85M | 385.57M | Net Debt |
| 254.52M | 317.42M | 26.56M | -22.80M | -50.57M | Total Liabilities |
| 1.95B | 1.79B | 1.18B | 1.50B | 1.39B | Stockholders Equity |
| 1.02B | 977.30M | 953.02M | 967.68M | 975.66M |
| Cash Flow | Free Cash Flow | |||
| 319.94M | 43.32M | -65.97M | -72.88M | 175.21M | Operating Cash Flow |
| 456.34M | 183.71M | 55.65M | 21.93M | 268.46M | Investing Cash Flow |
| -228.56M | -359.29M | -11.00M | -21.48M | -41.26M | Financing Cash Flow |
| -67.12M | 299.25M | -164.31M | -24.45M | -57.66M |
Granite Construction Technical Analysis
Positive
78.57
Price Trends
79.76
Negative
86.35
Negative
80.38
Negative
Market Momentum
-1.46
Negative
45.65
Neutral
42.42
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GVA, the sentiment is Positive. The current price of 78.57 is above the 20-day moving average (MA) of 75.41, below the 50-day MA of 79.76, and below the 200-day MA of 80.38, indicating a neutral trend. The MACD of -1.46 indicates Negative momentum. The RSI at 45.65 is Neutral, neither overbought nor oversold. The STOCH value of 42.42 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for GVA.
Granite Construction Risk Analysis
Granite Construction disclosed 53 risk factors in its most recent earnings report. Granite Construction reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Granite Construction Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $4.09B | 16.01 | 36.08% | ― | 7.28% | 85.63% | |
76 Outperform | $3.37B | 32.25 | 12.68% | 0.67% | 14.20% | 191.86% | |
75 Outperform | $3.16B | 17.67 | 13.67% | 0.48% | 11.40% | 42.51% | |
72 Outperform | $4.43B | 73.25 | 8.41% | ― | 22.91% | -1.39% | |
62 Neutral | $7.50B | 12.89 | 3.19% | 3.38% | 3.64% | -14.27% | |
61 Neutral | $4.52B | 19.08 | 20.35% | ― | 12.61% | 7.43% | |
58 Neutral | $1.86B | 60.45 | 4.84% | ― | -7.73% | -65.81% |
* Industrials Sector Average
Performance Comparison
GVA
Granite Construction
78.57
24.33
44.86%
DY
Dycom
153.27
17.44
12.84%
MYRG
MYR Group
111.86
-54.85
-32.90%
PRIM
Primoris Services
57.23
12.68
28.46%
STRL
Sterling Construction
137.09
36.68
36.53%
ROAD
Construction Partners
80.36
25.36
46.11%
Granite Construction Earnings Call Summary
Earnings Call Date: Feb 13, 2025 | % Change Since: -9.20% | Next Earnings Date: May 1, 2025
Earnings Call Sentiment Positive
Granite Construction reported a record year with significant revenue and profit increases. The company is optimistic about future growth, supported by strong cash flow and strategic investments. Despite some project delays and a postponed asset sale, the overall outlook remains positive with anticipated growth in 2025.Highlights
Record Year Achievement
Granite Construction reported a record year with a 14% revenue increase to $4 billion and a 44% increase in gross profit to $573 million for 2024.
Strong Future Outlook
Granite anticipates continued growth with a revenue target of $4.2 billion to $4.4 billion for 2025 and an adjusted EBITDA margin range of 11% to 12%.
Materials Segment Growth
The materials segment showed significant improvement with a 20% increase in aggregate reserves and expected price increases in 2025.
Strong Cash Flow
Operating cash flow increased by 148% to $456 million, indicating a strong cash generation capability.
Strategic Acquisitions and Investments
Granite is focusing on strategic M&A, with plans to complete two to three deals annually to strengthen its market position.
Lowlights
Project Delays
Some project delays were noted, although the construction segment still achieved a 3% revenue increase year-over-year.
Unrealized Asset Sales
A gain on asset sales expected in Q4 2024 was delayed to 2025, impacting financial guidance.
Company Guidance
During the Granite Construction Incorporated 2024 fourth quarter conference call, several key metrics and guidance for 2025 were discussed. Revenue for 2024 increased by 14% to $4 billion, while gross profit saw a 44% rise to $573 million. Adjusted EBITDA also increased by 44% to $402 million. Looking ahead to 2025, the company expects revenue to grow to a range of $4.2 billion to $4.4 billion, with an adjusted EBITDA margin between 11% and 12%. The construction segment showed a 3% year-over-year revenue increase to $821 million, and in the materials segment, a cash gross profit margin of 21% was achieved. The company plans to invest $140 million to $160 million in capital expenditures, focusing on strategic materials investments and automation projects. Granite also aims to maintain an operating cash flow margin of 9% of revenue. The guidance reflects confidence in achieving continued growth and margin expansion through organic growth and strategic acquisitions.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.