Sterling Construction (STRL) AI Stock Analysis

• Market Cap: $6.63B
• Dividend Yield: N/A
• Average Volume (3M): 484.19K
• Price to Earnings (P/E): 25.5
• Beta (1Y): 2.18
• Revenue Growth: 4.84%
• EPS Growth: 77.84%
• Country: US
• Employees: 3,200
• Sector: Industrials
• Sector Strength: 84
• Industry: Engineering & Construction
• EPS (TTM): 1.63
• Shares Outstanding: 30,412,312
• 10 Day Avg. Volume: 632,177
• 30 Day Avg. Volume: 484,191
• PEG Ratio: 0.26
• Price to Book (P/B): 2.09
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 6.26
• Enterprise Value/Market Cap: 0.20
• Enterprise Value/Revenue: 0.15
• Enterprise Value/Gross Profit: 2.93
• Enterprise Value/Ebitda: 0.89
• 1Y Price Target: $265.00
• Price Target Upside: 21.58% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 77 Outperform
• Price Target: $254.00 ▲(16.53%Upside)

Sterling Construction's strong financial performance and strategic corporate events significantly bolster its stock score. Despite positive technical trends, overbought signals present potential risks. The optimistic earnings call further supports a favorable outlook, though valuation remains a consideration.

Positive Factors

Acquisition Strategy

Sterling announced an agreement to acquire CEC Facilities Group, a leading electrical contractor, for $505 million.

Financial Performance

Shares of Sterling Infrastructure are trading up 5% after reporting strong first-quarter results with beats on revenue, EBITDA, and EPS as well as strong backlog growth of 17%.

Growth Opportunities

Sterling sees a significant opportunity to cross-sell opportunities, such as selling its site development services to CEC’s semiconductor customer base.

Negative Factors

Market Concentration Risk

More than 65% of e-infrastructure backlog is related to data center work, which could pose a risk if demand in this sector declines.

Revenue Guidance

Inclusive of the estimated contributions from Drake, guidance for 2025 implies that revenue was reduced by ~$30 million at the midpoint.

Sterling Construction Business Overview & Revenue Model

Company Description

Sterling Infrastructure, Inc. engages in the transportation, e-infrastructure, and building solutions primarily in the Southern United States, the Northeastern and Mid-Atlantic United States, the Rocky Mountain states, California, and Hawaii. It undertakes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, water, wastewater, and storm drainage systems for the departments of transportation in various states, regional transit authorities, airport authorities, port authorities, water authorities and railroads. The company also provides specialty site infrastructure improvement contracting services for blue-chip end users in the e-commerce, data center, distribution center and warehousing, and energy sectors. In addition, it undertakes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, and other concrete work for national home builders, regional and custom home builders, and developers and general contractors in commercial markets. The company was formerly known as Sterling Construction Company, Inc. and changed its name to Sterling Infrastructure, Inc. in June 2022. Sterling Infrastructure, Inc. was founded in 1955 and is headquartered in The Woodlands, Texas.

How the Company Makes Money

Sterling Construction generates revenue through its construction contracts, primarily in the transportation and water infrastructure sectors. The company bids on and secures contracts from government agencies and private clients for large-scale civil engineering projects. Key revenue streams include project management, construction, and maintenance services for infrastructure projects. Sterling's earnings are also influenced by its strategic partnerships with other construction firms and suppliers, allowing it to undertake and complete complex projects efficiently. The company's financial performance is further impacted by factors such as government infrastructure spending, economic conditions, and the competitive landscape in the construction industry.

Sterling Construction Financial Statement Overview

Summary

Sterling Construction shows a robust financial profile with strong revenue growth, profitability, and efficient cash flow management. The company maintains healthy margins and a stable capital structure, positioning it well for future growth.

Income Statement

Sterling Construction has demonstrated strong revenue growth with a steady increase over the years, culminating in a notable TTM revenue of $2.11 billion. The company maintains a healthy gross profit margin of approximately 20.9% and a net profit margin of 12.6% in the TTM, indicating effective cost management and profitability. Moreover, EBIT and EBITDA margins of 13.2% and 20.8% respectively in the TTM highlight robust operational efficiency.

Balance Sheet

Sterling's balance sheet exhibits a solid equity position, with a debt-to-equity ratio of 0.45 and a substantial equity ratio of 39.6% in the TTM, signifying a stable capital structure with moderate leverage. Return on equity stands strong at 33.0%, reflecting efficient utilization of shareholders' funds to generate profits. The company's increasing asset base further strengthens its financial footing.

Cash Flow

The company's cash flow statement reveals significant free cash flow generation with a growth rate of 9.6% from the previous year, underpinning financial flexibility. With an operating cash flow to net income ratio of 2.00 in the TTM, Sterling demonstrates effective cash conversion from earnings, ensuring liquidity to support operations and investments.

Breakdown
TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
2.11B	2.12B	1.97B	1.77B	1.41B	1.23B
	Gross Profit
444.06M	426.12M	337.64M	274.57M	192.07M	179.93M
	EBIT
278.57M	264.62M	205.79M	159.87M	107.01M	92.61M
	EBITDA
444.32M	451.94M	277.34M	211.43M	142.32M	126.43M
	Net Income Common Stockholders
265.89M	257.46M	138.66M	106.46M	62.65M	42.31M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
638.65M	664.20M	471.56M	181.54M	60.95M	66.19M
	Total Assets
2.03B	2.02B	1.78B	1.44B	1.23B	952.69M
	Total Debt
358.69M	369.27M	398.88M	491.16M	471.50M	385.23M
	Net Debt
-279.96M	-294.92M	-72.68M	309.62M	410.56M	319.04M
	Total Liabilities
1.21B	1.19B	1.15B	963.82M	874.55M	683.97M
	Stockholders Equity
805.42M	808.08M	618.91M	474.60M	358.77M	267.27M
Cash Flow		Free Cash Flow
455.95M	416.15M	414.20M	158.21M	112.28M	86.42M
	Operating Cash Flow
532.40M	497.10M	478.58M	219.12M	158.93M	119.28M
	Investing Cash Flow
-219.01M	-185.85M	-87.75M	-89.75M	-223.45M	-30.49M
	Financing Cash Flow
-155.15M	-118.62M	-104.53M	-32.79M	80.57M	-70.33M

Sterling Construction Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 217.97
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STRL, the sentiment is Positive. The current price of 217.97 is above the 20-day moving average (MA) of 199.25, above the 50-day MA of 175.70, and above the 200-day MA of 157.73, indicating a bullish trend. The MACD of 11.86 indicates Negative momentum. The RSI at 70.68 is Negative, neither overbought nor oversold. The STOCH value of 74.55 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STRL.

Sterling Construction Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ROAD	81 Outperform	$5.73B	87.94	9.21%	―	31.49%	-0.13%
IESC	78 Outperform	$5.42B	23.70	37.73%	―	21.53%	66.65%
STRL	77 Outperform	$6.63B	25.48	36.67%	―	4.84%	77.84%
GVA	75 Outperform	$3.89B	39.13	12.75%	0.58%	11.42%	247.33%
PRIM	74 Outperform	$4.00B	19.62	15.30%	0.43%	12.45%	42.45%
DY	68 Neutral	$6.77B	29.67	19.76%	―	12.77%	1.55%
Sector *	66 Neutral	$4.44B	12.06	5.34%	6.22%	4.17%	-11.81%

Sterling Construction Corporate Events

Sterling Construction Announces Major Asset Acquisition Deal

On June 16, 2025, Sterling Infrastructure, Inc. announced an Asset Purchase Agreement to acquire substantially all assets of CEC Facilities Group, LLC for $505 million, comprising $450 million in cash and $55 million in common stock. This acquisition, expected to close in the third quarter of 2025, aims to enhance Sterling’s market position by integrating CEC’s services and retaining key employees, although it remains subject to regulatory approvals and closing conditions.

The most recent analyst rating on (STRL) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sterling Construction stock, see the STRL Stock Forecast page.

Sterling Construction Acquires CEC Facilities for $505 Million

On June 17, 2025, Sterling Infrastructure, Inc. announced its agreement to acquire CEC Facilities Group, a leading electrical and mechanical contractor based in Texas, for $505 million. This acquisition, expected to close in the third quarter of 2025, will expand Sterling’s E-Infrastructure services into mission-critical electrical contracting, enhancing their market position and offering significant opportunities for cross-selling and growth in high-value sectors like semiconductors and data centers. The transaction is anticipated to be accretive to Sterling’s financial profile, with strong revenue and earnings contributions expected from CEC’s operations.

The most recent analyst rating on (STRL) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sterling Construction stock, see the STRL Stock Forecast page.

Sterling Construction Appoints New Chief Financial Officer

Sterling Infrastructure, Inc. announced the appointment of Nicholas Grindstaff as Chief Financial Officer, effective July 10, 2025, succeeding Ron Ballschmiede. Grindstaff, with over 30 years of experience in finance and leadership in the infrastructure and energy industries, previously served as CFO at Cinterra and Orbital Infrastructure Group. His extensive expertise in financial strategy and leadership is expected to support Sterling’s growth and strategic objectives.

The most recent analyst rating on (STRL) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sterling Construction stock, see the STRL Stock Forecast page.

Sterling Construction Amends Credit Agreement for Growth

On June 5, 2025, Sterling Infrastructure, Inc. amended its 2019 credit agreement, extending its maturity to June 2028 and increasing the facility size. The amended agreement, led by BMO Capital Markets, includes a $300 million term loan and a $150 million revolving credit facility, with improved financial flexibility and reduced interest margins. This strategic move positions Sterling for growth through organic means and acquisitions, as highlighted by CEO Joe Cutillo.

The most recent analyst rating on (STRL) stock is a Buy with a $185.00 price target. To see the full list of analyst forecasts on Sterling Construction stock, see the STRL Stock Forecast page.

Sterling Construction Holds Annual Meeting, Elects Directors

At its Annual Meeting, Sterling Construction‘s stockholders elected six directors, approved executive compensation, and ratified Grant Thornton, LLP as the independent registered public accounting firm for 2025. The meeting saw participation from 26,304,405 shares out of 30,416,977 outstanding, indicating strong shareholder engagement in the company’s governance decisions.

Sterling Construction Reports Strong Q1 2025 Financial Results

Sterling Infrastructure, Inc. reported strong financial results for the first quarter of 2025, with a 7% increase in revenues excluding RHB, a 27% rise in net income, and a 31% growth in adjusted EBITDA. The acquisition of Drake Concrete, LLC is expected to enhance Sterling’s presence in the Dallas-Fort Worth market. The company’s backlog increased by 17% to $2.1 billion, driven by significant growth in E-Infrastructure Solutions. Despite challenges in the Building Solutions segment due to the housing market slowdown, Sterling raised its full-year guidance, anticipating continued revenue and earnings growth.