tiprankstipranks
Trending News
More News >
Granite Construction (GVA)
NYSE:GVA
Advertisement

Granite Construction (GVA) AI Stock Analysis

Compare
276 Followers

Top Page

GVA

Granite Construction

(NYSE:GVA)

Rating:72Outperform
Price Target:
$118.00
▲(9.51% Upside)
Granite Construction's strong financial performance and positive earnings call are key strengths, supported by strategic acquisitions and robust growth. However, high valuation metrics and overbought technical indicators present potential risks.

Granite Construction (GVA) vs. SPDR S&P 500 ETF (SPY)

Granite Construction Business Overview & Revenue Model

Company DescriptionGranite 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 construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public. It also focuses on water-related construction for municipal agencies, commercial water suppliers, industrial facilities, and energy companies. The company also constructs various complex projects, including infrastructure/site development, mining, public safety, tunnel, solar, and power projects. The Materials segment is involved in the production of aggregates and asphalt for internal use, as well as for sale to third parties. In addition, it offers site preparation, mining, and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services. The company serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites. Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California.
How the Company Makes MoneyGranite Construction generates revenue primarily through contracts awarded for construction projects and services across various sectors. The company operates on a project-based revenue model, where it secures contracts from government agencies, municipalities, and private sector clients. Key revenue streams include heavy civil construction, which encompasses highway and road projects, and a range of specialized services in water resource management and environmental remediation. Additionally, revenue is supplemented through the sale of construction materials, including aggregates and asphalt products, which are used in its own projects and sold to third-party contractors. Strategic partnerships with governmental agencies and private firms, along with a focus on long-term contracts, contribute significantly to its earnings stability and growth potential.

Granite Construction Earnings Call Summary

Earnings Call Date:Aug 07, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 23, 2025
Earnings Call Sentiment Positive
Granite displayed strong strategic growth through acquisitions and achieved record CAP and revenue growth in the Materials segment. However, the Construction segment's revenue growth was slower than expected, and the company took on significant debt for its acquisitions. Overall, the call presented more positive aspects with strategic growth initiatives and financial performance.
Q2-2025 Updates
Positive Updates
Strategic Acquisitions
Granite announced the acquisitions of Warren Paving and Papich Construction for $710 million. These acquisitions are expected to contribute approximately $425 million in annual revenue with an adjusted EBITDA margin of 18%. These acquisitions will increase aggregate volumes by 27% and aggregate reserves by 30%.
Record CAP and Strong Bidding Environment
Granite's Construction segment achieved a new record high CAP of $6.1 billion with projects spanning Nevada, Utah, California, and Alaska. The transportation budget in California increased by 9% over the previous fiscal year.
Revenue and Profit Growth
Second quarter revenue increased by $43 million or 4%. Gross profit increased by $34 million or 21%. Adjusted net income improved by $9 million or 12%, and adjusted EBITDA improved by $22 million or 17%.
Materials Segment Performance
The Materials segment had an exceptional quarter with an 11% increase in aggregate volumes. The segment is benefiting from public market growth and capital improvement projects.
Negative Updates
Slow Start in Construction Revenue Growth
The Construction segment's growth through the first half of 2025 was less robust compared to market expectations, with only a 2% year-over-year increase.
Increased Debt Due to Acquisitions
Following the acquisitions, total debt outstanding increased to approximately $1.35 billion. Granite amended its credit facility to include a new Term Loan A of $600 million and expanded its revolver to $600 million.
Company Guidance
During the Granite Construction Inc. 2025 Second Quarter Conference Call, the company provided updated guidance following the acquisitions of Warren Paving and Papich Construction. The acquisitions, with a combined transaction price of $710 million, are expected to add approximately $425 million in annual revenue and boost the adjusted EBITDA margin by 60 basis points. This will increase annual aggregate volumes by 27% and aggregate reserves by 30%. The company has revised its 2025 revenue guidance to a range of $4.35 billion to $4.55 billion, with an adjusted EBITDA margin range of 11.25% to 12.25%. The acquisitions are projected to contribute $150 million in revenue for the remainder of the year. Additionally, Granite anticipates achieving an operating cash flow target of 9% of revenue for 2025 and has increased its 2027 targets for adjusted EBITDA margins, operating cash flow margin, and free cash flow margin ranges by 50 basis points. The company’s strategy includes completing at least 2 to 3 deals each year to further strengthen and expand its home markets.

Granite Construction Financial Statement Overview

Summary
Granite Construction shows strong revenue growth and improving profitability. The balance sheet is stable, but rising debt levels need monitoring. Cash flow management is healthy, supporting future investments.
Income Statement
80
Positive
Granite Construction has demonstrated strong revenue growth, with a notable increase in Total Revenue from $3.01 billion in 2021 to $4.03 billion in TTM (Trailing-Twelve-Months) 2025. The Gross Profit Margin has improved, indicating better cost control and efficiency. The Net Profit Margin is positive and has shown a consistent upward trend, which highlights effective profitability management. EBIT and EBITDA margins have also seen positive growth, reflecting enhanced operational efficiency and profitability.
Balance Sheet
70
Positive
The company maintains a stable balance sheet with a reasonable Debt-to-Equity ratio, indicating a balanced capital structure. The Return on Equity (ROE) is improving, showcasing effective utilization of shareholder funds. The Equity Ratio demonstrates a solid proportion of assets financed by equity, suggesting financial stability. However, the increase in total debt over the years should be monitored for potential leverage risks.
Cash Flow
75
Positive
Granite Construction exhibits healthy cash flow management, with positive Free Cash Flow and Operating Cash Flow. The Free Cash Flow to Net Income Ratio indicates strong cash generation relative to net income. The Operating Cash Flow to Net Income Ratio signifies effective cash flow conversion from operations. Free Cash Flow growth remains positive, supporting future investment opportunities, despite minor fluctuations in capital expenditures.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.03B4.01B3.51B3.30B3.50B3.56B
Gross Profit602.26M572.70M396.40M369.49M362.64M344.79M
EBITDA351.51M351.71M170.59M187.01M151.92M-29.30M
Net Income123.67M126.35M43.60M83.30M10.10M-145.12M
Balance Sheet
Total Assets2.91B3.03B2.81B2.17B2.49B2.38B
Cash, Cash Equivalents and Short-Term Investments574.28M726.57M624.76M517.17M585.56M614.09M
Total Debt838.50M832.85M735.09M339.21M372.85M378.62M
Total Liabilities1.87B1.95B1.79B1.18B1.50B1.39B
Stockholders Equity993.53M1.02B977.30M953.02M967.68M975.66M
Cash Flow
Free Cash Flow295.18M319.94M43.32M-65.97M-72.88M175.21M
Operating Cash Flow435.92M456.34M183.71M55.65M21.93M268.46M
Investing Cash Flow-370.60M-228.56M-359.29M-11.00M-21.48M-41.26M
Financing Cash Flow-14.99M-67.12M299.25M-164.31M-24.45M-57.66M

Granite Construction Technical Analysis

Technical Analysis Sentiment
Positive
Last Price107.75
Price Trends
50DMA
98.68
Positive
100DMA
91.38
Positive
200DMA
89.13
Positive
Market Momentum
MACD
3.55
Positive
RSI
59.56
Neutral
STOCH
37.03
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 107.75 is above the 20-day moving average (MA) of 106.63, above the 50-day MA of 98.68, and above the 200-day MA of 89.13, indicating a bullish trend. The MACD of 3.55 indicates Positive momentum. The RSI at 59.56 is Neutral, neither overbought nor oversold. The STOCH value of 37.03 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 3 New Risks
1.
Our bylaws include a forum selection clause, which could limit our stockholders' ability to obtain a favorable judicial forum for disputes with us. Q4, 2024
2.
Accounting for our revenues and cost involves significant estimates. Q4, 2024
3.
The U.S. government may adopt new contract rules and regulations or revise its procurement practices in a manner adverse to us at any time. Q4, 2024

Granite Construction Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
80
Outperform
$8.47B30.2836.72%3.31%76.94%
77
Outperform
$6.40B27.1517.01%0.25%15.08%55.10%
76
Outperform
$6.73B87.6410.60%39.18%1.79%
74
Outperform
$7.31B28.3820.65%12.61%10.33%
72
Outperform
$4.72B36.7515.89%0.48%7.18%77.84%
72
Outperform
$2.91B39.1112.56%-3.80%62.94%
64
Neutral
$10.84B16.098.89%1.97%2.67%-15.04%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GVA
Granite Construction
107.75
35.50
49.13%
DY
Dycom
252.47
83.29
49.23%
MYRG
MYR Group
187.27
93.08
98.82%
PRIM
Primoris Services
118.55
67.46
132.04%
STRL
Sterling Construction
278.53
171.47
160.16%
ROAD
Construction Partners
119.90
59.25
97.69%

Granite Construction Corporate Events

Private Placements and FinancingM&A TransactionsBusiness Operations and Strategy
Granite Construction Acquires Slats Lucas and Warren Paving
Positive
Aug 6, 2025

On August 5, 2025, Granite Construction Incorporated entered into an Equity Purchase Agreement to acquire all outstanding equity interests of Slats Lucas, LLC, and Warren Paving, Inc., for $540 million. This acquisition was financed through a new $600 million senior secured term loan. Additionally, Granite Construction amended and restated its credit agreement to include a $600 million revolving credit facility and a $600 million term loan, with provisions for additional borrowing capacity. These strategic financial moves are aimed at strengthening the company’s financial flexibility and operational capacity.

The most recent analyst rating on (GVA) stock is a Sell with a $70.00 price target. To see the full list of analyst forecasts on Granite Construction stock, see the GVA Stock Forecast page.

Executive/Board Changes
Granite Construction COO James Radich Retires
Neutral
Jul 7, 2025

On July 4, 2025, James Radich retired as Executive Vice President and Chief Operating Officer of Granite Construction Incorporated. In connection with his retirement, he entered into a severance agreement which includes various compensations and benefits, and a consulting agreement to assist the company with management transition and other business matters until October 31, 2025.

The most recent analyst rating on (GVA) stock is a Sell with a $61.00 price target. To see the full list of analyst forecasts on Granite Construction stock, see the GVA Stock Forecast page.

Executive/Board ChangesShareholder Meetings
Granite Construction Holds Annual Meeting, Elects Directors
Neutral
Jun 6, 2025

On June 5, 2025, Granite Construction held its Annual Meeting where 86.84% of the company’s shares were represented. During the meeting, Alan P. Krusi and Louis E. Caldera were elected to the Board of Directors for terms expiring in 2028. The stockholders also approved the compensation of the company’s named executive officers and ratified the appointment of PricewaterhouseCoopers LLP as the independent registered public accounting firm for the year ending December 31, 2025.

The most recent analyst rating on (GVA) stock is a Sell with a $61.00 price target. To see the full list of analyst forecasts on Granite Construction stock, see the GVA Stock Forecast page.

Executive/Board ChangesBusiness Operations and Strategy
Granite Construction Announces COO Retirement
Neutral
May 16, 2025

On May 16, 2025, Granite Construction announced that James A. Radich will retire from his role as Executive Vice President and Chief Operating Officer on July 4, 2025. This leadership change may impact the company’s operations and strategic direction as they transition to new leadership.

The most recent analyst rating on (GVA) stock is a Sell with a $61.00 price target. To see the full list of analyst forecasts on Granite Construction stock, see the GVA Stock Forecast page.

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.Date of analysis: Aug 11, 2025