Construction Partners (ROAD)
NASDAQ:ROAD
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Construction Partners
(NASDAQ:ROAD)
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Rating:76Outperform
Price Target:
$130.00
▲(3.47% Upside)
Action:Reiterated
Date:05/09/26
ROAD scores well on operating momentum and business strength (rising guidance, strong backlog visibility, improving profitability and positive free cash flow) and is supported by a strong technical uptrend. The overall score is held back primarily by very stretched valuation (high P/E) and a leverage level above the company’s target discussed on the earnings call.
Positive Factors
Backlog Visibility
A $3.14B backlog covering roughly 80%–85% of next‑12 months' contract revenue provides durable near‑term revenue visibility. That level of contracted work reduces dependence on new bids, smooths utilization planning, and supports management's raised guidance and cash flow outlook over coming quarters.
Negative Factors
Elevated Leverage
Leverage at 3.23x TTM EBITDA exceeds the company's target and limits financial flexibility. Elevated debt constrains ability to absorb project delays or fund growth without higher interest exposure, and historical swings in capital structure suggest leverage could re‑elevate in adverse cycles.
Read all positive and negative factors
Positive Factors
Negative Factors
Backlog Visibility
A $3.14B backlog covering roughly 80%–85% of next‑12 months' contract revenue provides durable near‑term revenue visibility. That level of contracted work reduces dependence on new bids, smooths utilization planning, and supports management's raised guidance and cash flow outlook over coming quarters.
Read all positive factors
Construction Partners Key Performance Indicators (KPIs)
Construction Partners (ROAD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$6.50B
Dividend YieldN/A
Average Volume (3M)531.52K
Price to Earnings (P/E)169.2
Beta (1Y)1.59
Revenue Growth48.81%
EPS Growth94.34%
CountryUS
Employees1,325
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)2.29
Shares Outstanding47,966,260
10 Day Avg. Volume734,712
30 Day Avg. Volume531,524
Financial Highlights & Ratios
PEG Ratio1.75
Price to Book (P/B)7.65
Price to Sales (P/S)2.48
P/FCF Ratio45.50
Enterprise Value/Market Cap1.25
Enterprise Value/Revenue2.49
Enterprise Value/Gross Profit15.85
Enterprise Value/Ebitda18.33
Forecast
1Y Price Target
$148.00Price Target Upside17.80% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)2.82
Revenue Forecast (FY)$3.53B
Construction Partners Business Overview & Revenue Model
Company Description
Construction Partners, Inc., a civil infrastructure company, engages in the construction and maintenance of roadways across Alabama, Florida, Georgia, North Carolina, and South Carolina. The company, through its subsidiaries, provides various prod...
How the Company Makes Money
Construction Partners makes money primarily by performing civil construction projects and by producing/selling construction materials that support those projects. (1) Construction contracting revenue: The company bids for and executes roadway and ...
Construction Partners Earnings Call Summary
Earnings Call Date:May 08, 2026
(Q2-2026)
| % Change Since: |
Next Earnings Date:Aug 07, 2026
Earnings Call Sentiment Positive
The call conveyed a predominantly positive operational and financial story: strong top-line growth (+35% revenue), robust adjusted EBITDA growth (+35%), significant backlog ($3.14B) with high coverage (80%–85%), improving cash flow (+~17% year-over-year) and continued disciplined M&A and vertical-integration progress. Headwinds are manageable—leverage remains above target (3.23x), GAAP net income was modest for the quarter, and commodity/weather exposures persist but are mitigated through indexing, hedges and terminals. On balance, the positive drivers and raised guidance materially outweigh the noted challenges.Positive Updates
Strong Revenue Growth
Revenue for Q2 was $769.2 million, up 35% year-over-year, driven by 11% organic growth and 24% acquisitive growth.
Negative Updates
Leverage Above Target
Debt to trailing 12-month EBITDA was 3.23x at quarter end, above the company's targeted ~2.5x leverage ratio, though management expects to fund the recent acquisition from Q3 cash flow without additional long-term debt.
Read all updates
Q2-2026 Updates
Positive
Negative
Strong Revenue Growth
Revenue for Q2 was $769.2 million, up 35% year-over-year, driven by 11% organic growth and 24% acquisitive growth.
Read all positive updates
Company Guidance
Construction Partners raised FY‑2026 guidance to revenue of $3.59–$3.65 billion, net income of $159–$162 million, adjusted net income of $170.4–$174.2 million, adjusted EBITDA of $552–$564 million and an adjusted EBITDA margin of 15.38%–15.45%; management expects ~7%–8% organic growth for the year. In Q2 the company reported revenue of $769.2 million (+35% YoY: 11% organic, 24% acquisitive), gross profit of $98.9 million (12.9% of revenue), adjusted EBITDA $93.3 million (12.1% margin), adjusted net income $10.4 million (adjusted diluted EPS $0.18) and net income $9.2 million; backlog was $3.14 billion covering ~80%–85% of next‑12‑month contract revenue. Liquidity and balance‑sheet metrics include $77 million cash, $150 million available under the credit facility (net of letters of credit), trailing‑12‑month debt/EBITDA of 3.23x (targeting ~2.5x), Q2 operating cash flow of $65.2 million (vs. $55.6M LY), and an expected FY‑26 conversion of 75%–85% of EBITDA to operating cash; longer‑term ROAD 2030 targets remain $1 billion of annual EBITDA and ~17% EBITDA margin.Construction Partners Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
83
Very Positive
Cash Flow
74
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.26B | 2.81B | 1.82B | 1.56B | 1.30B | 910.74M |
| Gross Profit | 512.90M | 439.09M | 258.50M | 198.98M | 137.12M | 116.79M |
| EBITDA | 443.33M | 373.17M | 214.72M | 170.15M | 102.61M | 80.73M |
| Net Income | 127.00M | 101.77M | 68.94M | 49.00M | 21.38M | 20.18M |
Balance Sheet | ||||||
| Total Assets | 3.44B | 3.24B | 1.54B | 1.22B | 1.10B | 806.62M |
| Cash, Cash Equivalents and Short-Term Investments | 76.98M | 156.06M | 74.69M | 48.24M | 35.53M | 57.25M |
| Total Debt | 1.85B | 1.69B | 553.25M | 390.73M | 389.83M | 222.87M |
| Total Liabilities | 2.46B | 2.33B | 968.39M | 703.09M | 639.64M | 397.72M |
| Stockholders Equity | 979.38M | 911.96M | 573.74M | 516.57M | 455.88M | 408.90M |
Cash Flow | ||||||
| Free Cash Flow | 191.35M | 153.37M | 121.15M | 59.35M | -52.35M | -7.83M |
| Operating Cash Flow | 342.78M | 291.30M | 209.08M | 157.16M | 16.50M | 48.50M |
| Investing Cash Flow | -724.05M | -1.28B | -307.58M | -143.37M | -197.33M | -263.41M |
| Financing Cash Flow | 354.67M | 1.07B | 126.11M | -264.00K | 159.14M | 123.85M |
Construction Partners Technical Analysis
Negative
125.64
Price Trends
118.21
Negative
119.72
Negative
117.66
Negative
Market Momentum
-0.86
Positive
40.88
Neutral
4.59
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROAD, the sentiment is Negative. The current price of 125.64 is above the 20-day moving average (MA) of 123.94, above the 50-day MA of 118.21, and above the 200-day MA of 117.66, indicating a bearish trend. The MACD of -0.86 indicates Positive momentum. The RSI at 40.88 is Neutral, neither overbought nor oversold. The STOCH value of 4.59 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ROAD.
Construction Partners Risk Analysis
Construction Partners disclosed 51 risk factors in its most recent earnings report. Construction Partners 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
Construction Partners Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
82 Outperform | $23.08B | 32.52 | 32.77% | ― | 36.96% | 31.00% | |
76 Outperform | $6.50B | 169.22 | 13.68% | ― | 48.81% | 94.34% | |
72 Outperform | $5.72B | ― | 16.70% | 0.45% | 14.93% | 49.81% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
62 Neutral | $4.10B | 11.84 | 26.57% | 1.65% | -3.61% | 10.17% | |
58 Neutral | $5.89B | 111.18 | 15.21% | 0.25% | 13.40% | 19.67% | |
45 Neutral | $6.19B | 12.34 | 8.12% | ― | -8.32% | -87.53% |
* Industrials Sector Average
ROAD
Construction Partners
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10.86
10.68%
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STRL
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752.00
569.91
312.98%
Construction Partners Corporate Events
Business Operations and StrategyM&A Transactions
Construction Partners Expands Nashville Footprint With Four Star Acquisition
Positive
Apr 1, 2026
On April 1, 2026, Construction Partners, Inc. announced that it completed the acquisition of Four Star Paving, LLC, a long-established commercial paving contractor serving the Nashville, Tennessee metro area for more than two decades. Four Star, k...
Executive/Board ChangesDelistings and Listing ChangesShareholder Meetings
Construction Partners Announces Dual Listing on Nasdaq Texas
Positive
Mar 27, 2026
At its March 24, 2026 annual meeting, Construction Partners, Inc. reported that holders of 129,770,507 votes, or 97.2% of total voting power as of January 23, 2026, were present or represented by proxy. Stockholders reelected Craig Jennings and Ma...
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.