Granite Construction (GVA)
NYSE:GVA
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Granite Construction
(NYSE:GVA)
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Rating:70Outperform
Price Target:
$128.00
▲(0.80% Upside)
Action:UpgradedDate:02/18/26
The score is driven primarily by improved profitability/cash generation and strong technical momentum, supported by upbeat 2026 guidance and record backlog. Offsetting these positives are a weaker valuation (high P/E/low yield) and increased leverage plus top-line/cash-flow volatility signals.
Positive Factors
Profitability & Margin Expansion
Material margin expansion and higher EBITDA reflect durable improvements in project execution, pricing and mix toward higher‑quality work. Sustained margins bolster free cash flow generation, funding reinvestment and reducing sensitivity to short-term revenue swings over the next several quarters.
Negative Factors
Higher Leverage
A notable step‑up in leverage reduces balance‑sheet flexibility and increases refinancing and interest costs risk. If project timing or margins soften, elevated debt amplifies downside and constrains capacity to pursue opportunistic investments without deleveraging.
Read all positive and negative factors
Positive Factors
Negative Factors
Profitability & Margin Expansion
Material margin expansion and higher EBITDA reflect durable improvements in project execution, pricing and mix toward higher‑quality work. Sustained margins bolster free cash flow generation, funding reinvestment and reducing sensitivity to short-term revenue swings over the next several quarters.
Read all positive factors
Granite Construction (GVA) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.52B
Dividend Yield0.45%
Average Volume (3M)587.93K
Price to Earnings (P/E)26.1
Beta (1Y)1.08
Revenue Growth6.87%
EPS Growth64.56%
CountryUS
Employees2,300
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)1.03
Shares Outstanding43,503,674
10 Day Avg. Volume426,773
30 Day Avg. Volume587,927
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 Cap1.17
Enterprise Value/Revenue1.46
Enterprise Value/Gross Profit9.11
Enterprise Value/Ebitda12.91
Forecast
1Y Price Target
$143.50Price Target Upside13.01% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)5.29
Revenue Forecast (FY)$4.97B
Granite Construction Business Overview & Revenue Model
Company Description
Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States. It operates through two segments, Construction and Materials segments. The Construction segment engages in the c...
How the Company Makes Money
Granite makes money primarily by contracting to build, improve, and repair infrastructure projects and by supplying construction materials. The largest revenue driver is typically its Construction business, where it earns revenue from project cont...
Granite Construction Key Performance Indicators (KPIs)
Granite Construction Earnings Call Summary
Earnings Call Date:Feb 12, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 30, 2026
Earnings Call Sentiment Positive
The call emphasized strong, broad-based financial and operational progress: record backlog, double-digit revenue growth, meaningful margin expansion, transformative Materials performance with substantial reserve growth, strong cash generation, and clear 2026 guidance targeting further EBITDA margin improvement. Challenges noted include weather-related delays, certain 2025 cash benefits that were non-recurring, reliance on continued successful M&A (with leverage considerations), and uncertainty/timing around federal funding and large federal programs (e.g., border work). Overall, positives around organic performance, successful integrations, and clear guidance materially outweigh the enumerated risks.Positive Updates
Record Backlog (CAP) Expansion
Contract backlog (CAP) reached a record $7,000,000,000 at year-end 2025, increasing sequentially by $632,000,000 in the fourth quarter, with best value work representing ~48% of CAP (roughly 50/50 best value vs bid-build).
Negative Updates
Weather-Related Delays and Regional Impacts
Wet weather, particularly late in the quarter and in certain geographies (including the Southeast), caused project delays and operational impacts; management noted weather remains a potential risk for execution and timing of revenue conversion.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Backlog (CAP) Expansion
Contract backlog (CAP) reached a record $7,000,000,000 at year-end 2025, increasing sequentially by $632,000,000 in the fourth quarter, with best value work representing ~48% of CAP (roughly 50/50 best value vs bid-build).
Read all positive updates
Company Guidance
Management guided 2026 revenue of $4.9–$5.1 billion (implying organic growth near the high end of their 2027 CAGR target of 6–8%), adjusted EBITDA margin of 12–13% (toward a 2027 target of 12.5–14.5%), SG&A of 8.5–9.0% of revenue (including ~$48 million of stock‑based compensation), and CapEx of $140–$160 million (including about $50 million of strategic Materials investment); they expect a 2026 operating cash flow margin of ~10% of revenue (after 2025 operating cash flow of $469M, 10.6% of revenue, or ~9% ex‑nonrecurring collections). Management reiterated M&A as a growth lever (after $778M of 2025 acquisitions), a net‑leverage target around 2.5x, and noted base-year metrics and portfolio strength: year‑end CAP of $7.0B (up $632M sequentially) with 48% best‑value work, Materials reserves +34% to 2.1 billion tons, 2025 revenue $4.4B, gross profit $711M, adjusted EBITDA $527M (11.9% margin), adjusted net income $276M, 2025 CapEx $138M, cash $650M, debt $1.3B, and $583M revolver availability.Granite Construction Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
58
Neutral
Cash Flow
70
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 4.42B | 4.01B | 3.51B | 3.30B | 3.50B |
| Gross Profit | 711.22M | 572.70M | 396.40M | 369.49M | 362.64M |
| EBITDA | 424.67M | 351.71M | 170.59M | 187.01M | 151.92M |
| Net Income | 193.00M | 126.35M | 43.60M | 83.30M | 10.10M |
Balance Sheet | |||||
| Total Assets | 4.03B | 3.03B | 2.81B | 2.17B | 2.49B |
| Cash, Cash Equivalents and Short-Term Investments | 600.24M | 726.57M | 624.76M | 517.17M | 585.56M |
| Total Debt | 1.62B | 832.85M | 735.09M | 339.21M | 372.85M |
| Total Liabilities | 2.81B | 1.95B | 1.79B | 1.18B | 1.50B |
| Stockholders Equity | 1.18B | 1.02B | 977.30M | 953.02M | 967.68M |
Cash Flow | |||||
| Free Cash Flow | 330.65M | 319.94M | 43.32M | -65.97M | -72.88M |
| Operating Cash Flow | 468.92M | 456.34M | 183.71M | 55.65M | 21.93M |
| Investing Cash Flow | -993.72M | -228.56M | -359.29M | -11.00M | -21.48M |
| Financing Cash Flow | 475.69M | -67.12M | 299.25M | -164.31M | -24.45M |
Granite Construction Technical Analysis
Positive
126.98
Price Trends
126.17
Positive
120.24
Positive
111.45
Positive
Market Momentum
0.26
Negative
58.15
Neutral
87.20
Negative
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 126.98 is above the 20-day moving average (MA) of 121.54, above the 50-day MA of 126.17, and above the 200-day MA of 111.45, indicating a bullish trend. The MACD of 0.26 indicates Negative momentum. The RSI at 58.15 is Neutral, neither overbought nor oversold. The STOCH value of 87.20 is Negative, 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 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 |
|---|---|---|---|---|---|---|---|
82 Outperform | $8.42B | 35.01 | 33.62% | 0.49% | 13.49% | 77.73% | |
76 Outperform | $4.95B | 28.92 | 19.65% | ― | -0.64% | 168.51% | |
76 Outperform | $6.65B | 21.65 | 37.06% | ― | 28.20% | 24.27% | |
74 Outperform | $8.74B | 24.39 | 17.49% | 0.25% | 21.45% | 67.31% | |
70 Outperform | $5.52B | 26.09 | 17.58% | 0.45% | 6.87% | 64.56% | |
70 Outperform | $4.40B | 30.66 | 6.77% | 0.09% | 19.22% | 78.83% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
GVA
Granite Construction
126.98
49.68
64.28%
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603.91
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317.27%
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166.23
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TPC
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86.16
64.76
302.56%
ECG
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130.88
92.34
239.60%
Granite Construction Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Granite Construction Announces Convertible Notes Exchange Agreement
Positive
Feb 18, 2026
On February 18, 2026, Granite Construction entered into privately negotiated exchange agreements with select holders of its 3.75% Convertible Senior Notes due 2028 to swap $100 million in principal for a mix of cash and, potentially, stock, with f...
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.