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Granite Construction (GVA)
NYSE:GVA

Granite Construction (GVA) AI Stock Analysis

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Granite Construction

(NYSE:GVA)

Rating:75Outperform
Price Target:
$101.00
▲(9.89%Upside)
Granite Construction's strong financial performance and positive market momentum are significant strengths, supporting the stock's attractiveness. However, the high P/E ratio suggests potential overvaluation. The company's strategic focus and positive earnings guidance further bolster its outlook, despite some external challenges.

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 makes money through a diversified revenue model that includes income from construction services and the sale of construction materials. The company's construction services revenue is primarily driven by large-scale infrastructure projects, such as highways, bridges, and airports, often funded by government contracts. Revenue from construction materials stems from the production and sale of aggregates, asphalt, and concrete to both internal projects and external customers. Granite Construction's earnings are also influenced by strategic partnerships and joint ventures, which enable the company to undertake large, complex projects and expand its market reach.

Granite Construction Earnings Call Summary

Earnings Call Date:May 01, 2025
(Q1-2025)
|
% Change Since: 13.06%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
Granite has had a strong start to 2025 with record CAP levels, significant growth in the Materials segment, and improved execution in the Construction segment. However, weather impacts and ongoing tariff concerns present challenges.
Q1-2025 Updates
Positive Updates
Strong Start to 2025
Granite's performance in the first quarter of 2025 is in line with expectations, with an increase in CAP to a record $5.7 billion and a strong bidding environment.
Materials Segment Growth
Significant investments in the Materials segment have increased reserves by 56% to 1.6 billion tons. The company added 11 new aggregate crushing plants and 10 new asphalt plants over three years, improving margins.
Increase in Construction Segment Gross Profit
Construction segment gross profit improved by $29 million to $85 million, with a gross profit margin of 14%, driven by improved execution.
Positive Financial Performance
Revenue increased by $28 million or 4%, gross profit increased by $30 million or 54%, and adjusted EBITDA improved by $14 million.
Negative Updates
Weather Impacts
Wet weather in March affected project progression and revenue recognition, particularly in Western markets.
Tariff Concerns
While not significantly impacted yet, tariffs remain a concern for future operations and pricing strategies.
Company Guidance
During the Granite 2025 First Quarter Conference Call, the company reaffirmed its guidance and financial targets for 2025 and 2027, despite uncertainties in the macroeconomic environment. The guidance for 2025 includes expected revenue between $4.2 billion and $4.4 billion, with an adjusted EBITDA margin of 11% to 12%. The company reported a strong start to the year with a revenue increase of $28 million or 4%, a gross profit increase of $30 million or 54%, and an adjusted EBITDA improvement of $14 million. The Construction segment showed a revenue increase of $19 million, reaching $615 million, and a gross profit margin increase to 14%. The Materials segment saw a revenue increase of $8 million, with expectations for further revenue and profit improvements throughout the year. The company also aims for operating cash flow to be 9% of revenue for 2025 and plans to complete two to three M&A deals within the year.

Granite Construction Financial Statement Overview

Summary
Granite Construction demonstrates strong revenue growth, improved profitability, and effective cash flow management. However, the rising debt levels pose potential leverage risks.
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.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
4.03B4.01B3.51B3.30B3.01B3.56B
Gross Profit
602.26M572.70M396.40M369.49M305.56M344.79M
EBIT
217.21M207.36M80.06M85.38M-23.00M7.55M
EBITDA
371.06M351.71M170.59M153.53M67.33M-29.30M
Net Income Common Stockholders
123.67M126.35M43.60M83.30M-8.26M-166.18M
Balance SheetCash, Cash Equivalents and Short-Term Investments
574.28M726.57M624.76M517.17M585.56M624.93M
Total Assets
2.91B3.03B2.81B2.17B2.49B2.38B
Total Debt
838.50M832.85M735.09M320.55M372.85M385.57M
Net Debt
459.43M254.52M317.42M26.56M-22.80M-50.57M
Total Liabilities
1.87B1.95B1.79B1.18B1.50B1.39B
Stockholders Equity
993.53M1.02B977.30M953.02M967.68M975.66M
Cash FlowFree Cash Flow
323.74M319.94M43.32M-65.97M-72.88M175.21M
Operating Cash Flow
432.27M456.34M183.71M55.65M21.93M268.46M
Investing Cash Flow
-363.60M-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 Price91.91
Price Trends
50DMA
81.86
Positive
100DMA
82.52
Positive
200DMA
83.96
Positive
Market Momentum
MACD
2.49
Negative
RSI
70.28
Negative
STOCH
80.36
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 91.91 is above the 20-day moving average (MA) of 87.84, above the 50-day MA of 81.86, and above the 200-day MA of 83.96, indicating a bullish trend. The MACD of 2.49 indicates Negative momentum. The RSI at 70.28 is Negative, neither overbought nor oversold. The STOCH value of 80.36 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 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 (66)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
81
Outperform
$6.06B94.849.21%31.49%-0.13%
76
Outperform
$5.94B24.0836.67%4.84%77.84%
GVGVA
75
Outperform
$3.97B39.8512.75%0.57%11.42%247.33%
74
Outperform
$3.98B19.5415.30%0.37%12.45%42.45%
72
Outperform
$2.55B76.025.71%-7.33%-57.86%
DYDY
68
Neutral
$6.88B30.8219.76%12.77%1.55%
66
Neutral
$4.48B12.265.32%248.53%4.10%-12.36%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
GVA
Granite Construction
91.91
32.83
55.57%
DY
Dycom
243.02
62.93
34.94%
MYRG
MYR Group
165.57
17.82
12.06%
PRIM
Primoris Services
75.92
23.08
43.68%
STRL
Sterling Construction
205.99
91.11
79.31%
ROAD
Construction Partners
110.36
55.69
101.87%

Granite Construction Corporate Events

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
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.