Construction Partners (ROAD) AI Stock Analysis

• Market Cap: $5.94B
• Dividend Yield: N/A
• Average Volume (3M): 485.27K
• Price to Earnings (P/E): 91.1
• Beta (1Y): 1.35
• Revenue Growth: 31.49%
• EPS Growth: -0.13%
• Country: US
• Employees: 1,325
• Sector: Industrials
• Sector Strength: 87
• Industry: Engineering & Construction
• EPS (TTM): 0.08
• Shares Outstanding: 47,217,170
• 10 Day Avg. Volume: 493,017
• 30 Day Avg. Volume: 485,267
• PEG Ratio: 12.39
• Price to Book (P/B): 2.98
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -25.94
• Enterprise Value/Market Cap: 0.29
• Enterprise Value/Revenue: 0.22
• Enterprise Value/Gross Profit: 5.43
• Enterprise Value/Ebitda: 2.23
• 1Y Price Target: $110.67
• Price Target Upside: 4.41% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 81 Outperform
• Price Target: $127.00 ▲(19.81%Upside)

Construction Partners' stock score is bolstered by strong financial performance and positive earnings guidance, reflecting the company's robust growth trajectory and effective strategic initiatives. While technical indicators and corporate events further enhance the outlook, the high P/E ratio suggests valuation concerns which temper the overall score.

Positive Factors

Industry Consolidation

The consolidation strategy in the asphalt industry is expected to support pricing dynamics and contribute to ROAD's potential for higher margins.

Organic Growth

ROAD's organic growth target has been raised, with a strong performance in the Southeast and Sunbelt regions, showcasing its growth potential in an uncertain macro environment.

State Funding

The additional state transportation funding measures from TDOT are expected to benefit ROAD's expansion plans in the Tennessee market.

Negative Factors

Vertical Integration Challenges

There is room for margin improvements, with Lone Star's model providing a blueprint for ROAD to enhance profitability through higher vertical integration.

Construction Partners Business Overview & Revenue Model

Company Description

Construction Partners, Inc. (NASDAQ: ROAD) is a leading infrastructure and road construction company engaged in the construction and maintenance of roadways across the Southeastern United States. The company operates primarily in the public sector, serving state and local government agencies with services that include construction, resurfacing, and maintenance of highways, roads, and bridges. Construction Partners is known for its commitment to quality, safety, and sustainability in delivering infrastructure solutions.

How the Company Makes Money

Construction Partners generates revenue through a variety of streams primarily centered around infrastructure projects. The company primarily earns money by bidding on and winning government contracts for road construction and maintenance projects. Once a contract is secured, Construction Partners undertakes the project, which involves a comprehensive range of activities including site preparation, materials procurement, construction, and project management. Revenue is recognized as the project progresses, based on the percentage of completion method. The company also benefits from long-term maintenance contracts that provide recurring revenue. Additionally, strategic acquisitions and partnerships within the construction industry enhance their market position and contribute to their financial performance.

Construction Partners Financial Statement Overview

Summary

Construction Partners exhibits strong financial performance with robust revenue growth and improving profitability metrics. Effective cost management is evident in the upward trends of both gross profit and net profit margins. The company maintains a solid balance sheet with manageable leverage, though increasing liabilities require attention. Strong cash flows indicate efficient capital management, supporting future growth.

Income Statement

Construction Partners has demonstrated impressive growth with a robust revenue growth rate and improving profit margins. The TTM (Trailing-Twelve-Months) gross profit margin and net profit margin show a strong upward trend, indicating effective cost management and profitability improvements. Additionally, both EBIT and EBITDA margins have increased, showcasing operational efficiency. However, a slight decrease in net income in the most recent period due to external factors needs monitoring.

Balance Sheet

The balance sheet reflects a healthy financial position with a low debt-to-equity ratio, suggesting manageable leverage. The equity ratio indicates a solid capital base and asset utilization. Return on Equity (ROE) remains strong, pointing to effective use of shareholder funds. However, the increase in total liabilities warrants attention, as it could impact future financial flexibility.

Cash Flow

Cash flow analysis reveals strong operational cash flow, aligning with net income, which is a positive indicator of earnings quality. The free cash flow remains solid, with a notable growth rate, indicating efficient capital expenditure management. The operating cash flow to net income ratio suggests efficient cash conversion. However, fluctuations in investing cash flow due to capital investments need strategic oversight.

Breakdown	TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	2.19B	1.82B	1.56B	1.30B	910.74M	785.68M
Gross Profit	315.49M	258.25M	196.38M	139.30M	119.94M	122.21M
EBITDA	190.05M	111.24M	157.13M	99.13M	84.48M	92.85M
Net Income	61.38M	68.94M	49.00M	21.38M	20.18M	40.30M
Balance Sheet
Total Assets	2.75B	1.54B	1.22B	1.10B	806.62M	628.11M
Cash, Cash Equivalents and Short-Term Investments	101.86M	74.69M	48.24M	35.53M	57.25M	148.32M
Total Debt	97.34M	553.25M	390.73M	389.83M	222.87M	99.65M
Total Liabilities	1.43B	994.74M	703.09M	639.64M	397.72M	242.92M
Stockholders Equity	807.87M	573.74M	516.57M	455.88M	408.90M	385.19M
Cash Flow
Free Cash Flow	126.19M	121.15M	59.35M	-52.35M	-7.83M	52.60M
Operating Cash Flow	226.83M	209.08M	157.16M	16.50M	48.50M	105.17M
Investing Cash Flow	-1.06B	-307.58M	-143.37M	-197.33M	-263.41M	-79.36M
Financing Cash Flow	888.78M	126.11M	-264.00K	159.14M	123.85M	41.89M

Construction Partners Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 106.00
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROAD, the sentiment is Positive. The current price of 106 is above the 20-day moving average (MA) of 105.47, above the 50-day MA of 97.22, and above the 200-day MA of 85.07, indicating a bullish trend. The MACD of 2.39 indicates Positive momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 58.86 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROAD.

Construction Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROAD	81 Outperform	$5.94B	91.09	9.21%	―	31.49%	-0.13%
IESC	78 Outperform	$5.79B	25.31	37.73%	―	21.53%	66.65%
STRL	77 Outperform	$7.04B	27.06	36.67%	―	4.84%	77.84%
DY	76 Outperform	$7.11B	31.16	19.76%	―	12.77%	1.55%
GVA	75 Outperform	$4.06B	40.83	12.75%	0.56%	11.42%	247.33%
PRIM	74 Outperform	$4.32B	21.23	15.30%	0.40%	12.45%	42.45%
Sector *	68 Neutral	£2.96B	10.47	8.40%	3.13%	2.88%	-10.00%

Construction Partners Corporate Events

Construction Partners Announces Executive Team Reorganization

On May 8, 2025, Construction Partners, Inc. announced a reorganization of its executive team, with new appointments and title changes approved by the Board of Directors. The reorganization did not alter compensation arrangements, and former officers remain employed full-time. In its fiscal 2025 second quarter results, the company reported a 54% increase in revenue compared to the previous year, with net income of $4.2 million. The company also achieved a record project backlog of $2.84 billion and raised its fiscal 2025 outlook, driven by acquisitions and strong demand in the Sunbelt region. The acquisition of PRI expands its operations in Tennessee, enhancing its strategic growth and market presence.

Construction Partners Expands with Tennessee Acquisitions

On May 1, 2025, Construction Partners, Inc. announced the acquisition of PRI of East Tennessee, Inc. and Pavement Restorations, Inc., expanding its infrastructure business in Tennessee. This acquisition adds a hot-mix asphalt plant and a specialized pavement preservation business to its operations, enhancing its market presence in Tennessee from Knoxville to the Memphis metro area. The move is expected to leverage the expertise of PRI’s management team and capitalize on Tennessee’s economic growth and transportation funding, positioning Construction Partners as a leader in the pavement preservation industry.