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Granite Construction
(NYSE:GVA)
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Rating:56Neutral
Price Target:
$128.00
▲(2.84% Upside)
Action:Reiterated
Date:08/04/26
Overall score reflects solid cash flow and improved operational momentum (including raised revenue guidance and record backlog), but it is held back by the TTM net loss and higher leverage that elevate financial risk. Technicals are also weak with negative MACD and the stock below key moving averages, while valuation support is limited given the negative P/E and low dividend yield.
Positive Factors
Cash generation
Consistent, strong operating and free cash flow provides durable liquidity to fund capex, M&A, debt paydowns and working capital in a cyclical industry. Reliable cash conversion cushions GAAP volatility and supports strategic actions over the next several quarters.
Negative Factors
Elevated leverage
Material increase in debt and lower equity reduces financial flexibility and raises interest and covenant risk. Even with solid cash flow, higher leverage constrains optionality for M&A, buybacks or cyclical downturns and increases refinancing sensitivity in the medium term.
Read all positive and negative factors
Positive Factors
Negative Factors
Cash generation
Consistent, strong operating and free cash flow provides durable liquidity to fund capex, M&A, debt paydowns and working capital in a cyclical industry. Reliable cash conversion cushions GAAP volatility and supports strategic actions over the next several quarters.
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
$5.29B
Dividend Yield0.43%
Average Volume (3M)888.86K
Price to Earnings (P/E)―
Beta (1Y)0.89
Revenue Growth21.80%
EPS Growth-204.13%
CountryUS
Employees5,800
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)-3.77
Shares Outstanding43,764,510
10 Day Avg. Volume833,671
30 Day Avg. Volume888,863
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 Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$169.75Price Target Upside36.38% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering4
EPS Forecast (FY)5.8
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:Jul 30, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Oct 22, 2026
Earnings Call Sentiment Positive
The call emphasized strong commercial and financial momentum: record backlog (CAP), double‑digit revenue growth (29% YoY), improving adjusted earnings and a meaningful swing in operating cash flow ($142M YTD vs $5M prior year). Management raised revenue guidance and 2027 organic growth expectations and highlighted a growing data center pipeline, successful M&A execution (Kenny Seng) and improved access to capital (credit ratings, $600M notes). Primary negatives are Materials margin pressure in Q2 (800 bps decline), weather and quarry development impacts (~$10M and ~$5M), and large nonoperating convertible note charges ($363M) that will produce GAAP volatility and near‑term interest recognition of $270M. Overall, positives — including upgraded guidance, cash generation, backlog quality and strategic initiatives — materially outweigh the quarter’s transitory headwinds and one‑time financing charges.Positive Updates
Record Backlog (CAP) Growth
Contracted backlog (CAP) increased by $250 million sequentially to a record $7.4 billion, driven by strong project wins and the acquisition of Kenny Seng Construction (Kenny Seng CAP ~ $150 million). Management cited the record CAP as providing strong visibility into future revenue.
Negative Updates
Materials Margin Pressure
Materials gross profit margin decreased 800 basis points and cash gross profit margin decreased 310 basis points year‑over‑year in the quarter, driven by severe weather in the Southeast and higher production/quarry development costs.
Read all updates
Q2-2026 Updates
Positive
Negative
Record Backlog (CAP) Growth
Contracted backlog (CAP) increased by $250 million sequentially to a record $7.4 billion, driven by strong project wins and the acquisition of Kenny Seng Construction (Kenny Seng CAP ~ $150 million). Management cited the record CAP as providing strong visibility into future revenue.
Read all positive updates
Company Guidance
Granite raised 2026 revenue guidance to $5.3–$5.5 billion (from $5.2–$5.4B), which Management says reflects roughly 12% annual organic growth and about 10% growth from acquired companies at the midpoint, and it increased its 2027 organic growth outlook from a prior 6–8% range to above 10%; the company also raised its annual operating cash‑flow target from 10% to 11% of revenue while leaving guidance unchanged for adjusted EBITDA margin, SG&A as a percent of revenue, adjusted effective tax rate and CapEx. In support of the guidance, Granite pointed to a record Construction CAP of $7.4 billion and stronger data‑center CAP (up from $65M a year ago to ~$223M), and noted balance‑sheet actions including a $600M senior unsecured note offering, calling its 3.75% convertibles, an expected ~$570M cash deployment (net) to settle conversions and an anticipated reduction of adjusted diluted shares by ~2 million; the company recorded $363M of non‑operating convertible‑related charges this quarter (excluded from adjusted metrics) with a remaining $270M debt discount to be recognized in Q3.Granite Construction Financial Statement Overview
Summary
Income Statement
58
Neutral
Balance Sheet
44
Neutral
Cash Flow
72
Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 4.97B | 4.42B | 4.01B | 3.51B | 3.30B | 3.50B |
| Gross Profit | 776.94M | 711.22M | 572.70M | 396.40M | 369.49M | 362.64M |
| EBITDA | 190.18M | 498.48M | 351.71M | 170.59M | 187.01M | 151.92M |
| Net Income | -164.90M | 193.00M | 126.35M | 43.60M | 83.30M | 10.10M |
Balance Sheet | ||||||
| Total Assets | 4.78B | 4.03B | 3.03B | 2.81B | 2.17B | 2.49B |
| Cash, Cash Equivalents and Short-Term Investments | 1.05B | 600.24M | 726.57M | 624.76M | 517.17M | 585.56M |
| Total Debt | 1.73B | 1.62B | 832.85M | 735.09M | 339.21M | 372.85M |
| Total Liabilities | 3.97B | 2.81B | 1.95B | 1.79B | 1.18B | 1.50B |
| Stockholders Equity | 752.75M | 1.18B | 1.02B | 977.30M | 953.02M | 967.68M |
Cash Flow | ||||||
| Free Cash Flow | 414.89M | 330.65M | 319.94M | 43.32M | -65.97M | -72.88M |
| Operating Cash Flow | 574.15M | 468.92M | 456.34M | 183.71M | 55.65M | 21.93M |
| Investing Cash Flow | -878.40M | -993.72M | -228.56M | -359.29M | -11.00M | -21.48M |
| Financing Cash Flow | 595.85M | 475.69M | -67.12M | 299.25M | -164.31M | -24.45M |
Granite Construction Technical Analysis
Negative
124.47
Price Trends
135.76
Negative
131.60
Negative
123.80
Negative
Market Momentum
-4.75
Negative
42.36
Neutral
68.78
Neutral
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 124.47 is above the 20-day moving average (MA) of 123.80, below the 50-day MA of 135.76, and above the 200-day MA of 123.80, indicating a bearish trend. The MACD of -4.75 indicates Negative momentum. The RSI at 42.36 is Neutral, neither overbought nor oversold. The STOCH value of 68.78 is Neutral, 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 |
|---|---|---|---|---|---|---|---|
74 Outperform | $4.41B | 56.25 | 6.50% | 0.21% | 25.67% | ― | |
73 Outperform | $8.00B | 49.05 | 36.89% | 0.35% | 14.47% | 57.43% | |
72 Outperform | $6.40B | 28.64 | 37.17% | ― | 29.70% | 46.91% | |
66 Neutral | $5.19B | 31.35 | 24.17% | ― | 16.06% | 121.28% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
58 Neutral | $4.58B | 18.39 | 15.21% | 0.37% | 13.40% | 19.67% | |
56 Neutral | $5.29B | -32.00 | -16.01% | 0.42% | 21.80% | -204.13% |
* Industrials Sector Average
GVA
Granite Construction
122.11
28.01
29.77%
AGX
Argan
617.68
385.66
166.22%
MYRG
MYR Group
340.33
152.87
81.55%
PRIM
Primoris Services
90.85
-17.45
-16.11%
TPC
Tutor Perini
85.71
38.17
80.29%
ECG
Everus Construction Group, Inc.
136.16
63.22
86.67%
Granite Construction Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Granite Construction Unwinds Capped Call, Streamlining Capital Structure
Positive
Aug 4, 2026
On May 19, 2026, Granite Construction announced it would redeem the remaining $273.7 million of its 3.75% Convertible Senior Notes due 2028, and on August 4, 2026 it entered into unwind agreements with financial institutions to terminate the cappe...
Business Operations and StrategyPrivate Placements and Financing
Granite Construction Announces Redemption of 2028 Convertible Notes
Positive
Jul 10, 2026
On May 19, 2026, Granite Construction announced it had called for redemption the outstanding $273.3 million principal amount of its 3.75% Convertible Senior Notes due 2028, setting August 10, 2026 as the redemption date and allowing holders to con...
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.