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Granite Construction
(NYSE:GVA)
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Rating:72Outperform
Price Target:
$175.00
▲(40.82% Upside)
Action:Reiterated
Date:06/06/26
The score is driven by improved fundamentals and strong free cash flow alongside a positive trend and upbeat, raised guidance. Offsetting factors are elevated leverage and a less-attractive valuation (high P/E, low yield), with execution and cash-flow volatility risks typical for project-driven construction.
Positive Factors
Strong cash generation
Granite’s trailing‑twelve‑month operating cash flow (~$465M) and free cash flow (~$359M) show sustainable internal funding. Free cash flow covered about 77% of net income, supporting capital allocation, acquisitions, and gradual deleveraging without reliance on equity issuance, a durable strength for a project-driven contractor.
Negative Factors
Elevated leverage
Debt materially exceeds equity versus historical years, constraining flexibility. Operating cash flow relative to total debt (~0.31x TTM) implies deleveraging will take multiple periods of consistent FCF generation; higher leverage amplifies cyclicality, refinancing and covenant risks in a downturn.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Granite’s trailing‑twelve‑month operating cash flow (~$465M) and free cash flow (~$359M) show sustainable internal funding. Free cash flow covered about 77% of net income, supporting capital allocation, acquisitions, and gradual deleveraging without reliance on equity issuance, a durable strength for a project-driven contractor.
Read all positive factors
Granite Construction Key Performance Indicators (KPIs)
Any
Gross Profit by Segment
Shows gross profit generated by each business segment, highlighting where Granite converts sales into margin and where costs are pressuring profitability. Large differences between segments point to where pricing power, cost control, or operational efficiency will most affect overall earnings.
Shows gross profit generated by each business segment, highlighting where Granite converts sales into margin and where costs are pressuring profitability. Large differences between segments point to where pricing power, cost control, or operational efficiency will most affect overall earnings.
Data provided by:
The Fly
The FlyGranite Construction (GVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.28B
Dividend Yield0.45%
Average Volume (3M)817.48K
Price to Earnings (P/E)29.7
Beta (1Y)0.91
Revenue Growth14.93%
EPS Growth49.81%
CountryUS
Employees5,800
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)4.23
Shares Outstanding43,746,700
10 Day Avg. Volume713,471
30 Day Avg. Volume817,482
Financial Highlights & Ratios
PEG Ratio0.49
Price to Book (P/B)4.27
Price to Sales (P/S)1.14
P/FCF Ratio15.23
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue1.60
Enterprise Value/Gross Profit10.04
Enterprise Value/Ebitda14.46
Forecast
1Y Price Target
$163.00Price Target Upside31.17% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering3
EPS Forecast (FY)5.81
Revenue Forecast (FY)$5.28B
Granite Construction Business Overview & Revenue Model
Company Description
Granite Construction Incorporated is a leading U.S. company that functions as both an infrastructure contractor and a producer of essential construction materials. Its activities are primarily divided into two key segments: Construction and Materi...
How the Company Makes Money
Granite makes money primarily by performing construction work under customer contracts and by selling construction materials in markets where it has owned production operations.
1) Construction contracting revenue: The core revenue stream comes f...
Granite Construction Earnings Call Summary
Earnings Call Date:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call conveyed a broadly positive outlook driven by strong top-line growth (revenue +30%), margin and EBITDA improvement, accretive M&A (Kenny Sain and Warren Paving), raised guidance, and a growing, high-quality CAP base including federal and tactical infrastructure work. Management acknowledged near-term cash usage, a project cancellation that reduced CAP by ~$300 million, energy cost volatility, and execution risks on fast-burn tactical projects, but indicated those issues are mitigated and outweighed by the company’s operational momentum and disciplined capital allocation.Positive Updates
Strong Top-Line and Profitability Growth
Revenue increased 30% year-over-year to $912 million. Gross profit rose 31% to $110 million. Adjusted EBITDA increased by $30 million to $58 million, and adjusted net income increased by $12 million to $12 million.
Negative Updates
Project Cancellation Impacting CAP
Approximately $300 million reduction to CAP from the cancellation of a public sector highway project in California where expanded scope exceeded available funding. Management said cancellations are rare and project may return in a different form/size, but this reduced CAP growth headroom in the quarter.
Read all updates
Q1-2026 Updates
Positive
Negative
Strong Top-Line and Profitability Growth
Revenue increased 30% year-over-year to $912 million. Gross profit rose 31% to $110 million. Adjusted EBITDA increased by $30 million to $58 million, and adjusted net income increased by $12 million to $12 million.
Read all positive updates
Company Guidance
Management raised 2026 revenue guidance to $5.2–$5.4 billion (from $4.9–$5.1 billion), reflecting an incremental $200 million from a tactical infrastructure contract and $100 million from the Kenny Sain acquisition; they lowered SG&A as a percent of revenue to 8.25%–8.75% (from 8.5%–9%), inclusive of approximately $48 million of stock‑based compensation, and increased adjusted EBITDA margin guidance to 12.25%–13.25% (from 12%–13%); operating cash flow is still expected to be about 10% of revenue for the year, CapEx guidance of $141.16 billion (as stated on the call) and an estimated adjusted effective tax rate in the mid‑20s remain unchanged.Granite Construction Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
59
Neutral
Cash Flow
70
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.64B | 4.42B | 4.01B | 3.51B | 3.30B | 3.50B |
| Gross Profit | 737.27M | 711.22M | 572.70M | 396.40M | 369.49M | 362.64M |
| EBITDA | 511.96M | 498.48M | 351.71M | 170.59M | 187.01M | 151.92M |
| Net Income | 184.96M | 193.00M | 126.35M | 43.60M | 83.30M | 10.10M |
Balance Sheet | ||||||
| Total Assets | 3.78B | 4.03B | 3.03B | 2.81B | 2.17B | 2.49B |
| Cash, Cash Equivalents and Short-Term Investments | 314.90M | 600.24M | 726.57M | 624.76M | 517.17M | 585.56M |
| Total Debt | 1.40B | 1.62B | 832.85M | 735.09M | 339.21M | 372.85M |
| Total Liabilities | 2.70B | 2.81B | 1.95B | 1.79B | 1.18B | 1.50B |
| Stockholders Equity | 1.03B | 1.18B | 1.02B | 977.30M | 953.02M | 967.68M |
Cash Flow | ||||||
| Free Cash Flow | 302.19M | 330.65M | 319.94M | 43.32M | -65.97M | -72.88M |
| Operating Cash Flow | 434.40M | 468.92M | 456.34M | 183.71M | 55.65M | 21.93M |
| Investing Cash Flow | -814.91M | -993.72M | -228.56M | -359.29M | -11.00M | -21.48M |
| Financing Cash Flow | 267.16M | 475.69M | -67.12M | 299.25M | -164.31M | -24.45M |
Granite Construction Technical Analysis
Negative
124.27
Price Trends
140.80
Negative
133.11
Negative
122.46
Positive
Market Momentum
0.51
Positive
31.16
Neutral
7.55
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GVA, the sentiment is Negative. The current price of 124.27 is below the 20-day moving average (MA) of 146.76, below the 50-day MA of 140.80, and above the 200-day MA of 122.46, indicating a neutral trend. The MACD of 0.51 indicates Positive momentum. The RSI at 31.16 is Neutral, neither overbought nor oversold. The STOCH value of 7.55 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GVA.
Granite Construction Risk Analysis
Granite Construction disclosed 52 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
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $6.85B | 31.65 | 37.17% | ― | 29.70% | 46.91% | |
79 Outperform | $6.54B | 47.20 | 22.14% | ― | 13.14% | 317.43% | |
77 Outperform | $9.33B | 59.11 | 36.89% | 0.49% | 14.47% | 57.43% | |
72 Outperform | $6.28B | 29.69 | 16.70% | 0.45% | 14.93% | 49.81% | |
69 Neutral | $3.97B | 50.36 | 6.50% | 0.09% | 25.67% | ― | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $4.86B | 19.48 | 15.21% | 0.25% | 13.40% | 19.67% |
* Industrials Sector Average
GVA
Granite Construction
125.58
32.24
34.54%
AGX
Argan
687.49
476.46
225.78%
MYRG
MYR Group
430.91
247.25
134.62%
PRIM
Primoris Services
89.43
3.05
3.53%
TPC
Tutor Perini
74.98
26.12
53.47%
ECG
Everus Construction Group, Inc.
138.64
69.83
101.48%
Granite Construction Corporate Events
Executive/Board ChangesShareholder Meetings
Granite Construction Shareholders Back Directors and Governance Measures
Positive
Jun 5, 2026
At its annual meeting held on June 4, 2026, Granite Construction reported that 39,613,581 shares, or 90.55% of outstanding stock as of April 10, 2026, were present or represented by proxy, indicating strong shareholder participation. Stockholders ...
Business Operations and StrategyFinancial DisclosuresPrivate Placements and Financing
Granite Construction Completes $600 Million Senior Notes Offering
Neutral
Jun 2, 2026
On June 2, 2026, Granite Construction closed a private offering of $600 million in 6.375% senior unsecured notes due 2034, generating estimated net proceeds of about $590 million. The notes, guaranteed by key domestic subsidiaries, carry semiannua...
Business Operations and StrategyPrivate Placements and Financing
Granite Construction Prices $600 Million Senior Notes Offering
Positive
May 19, 2026
On May 18, 2026, Granite Construction announced it had priced a private offering of $600 million in 6.375% senior notes due 2034, which will be guaranteed by certain existing and future domestic subsidiaries and is expected to close on June 2, 202...
Business Operations and StrategyPrivate Placements and Financing
Granite Construction Announces New Senior Notes Offering
Positive
May 18, 2026
On May 18, 2026, Granite Construction announced plans to privately offer $600 million of senior notes due 2034, guaranteed on an unsecured basis by certain U.S. subsidiaries, with terms and pricing subject to market conditions. The move is aimed a...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
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.