Sterling Construction (STRL) AI Stock Analysis

• Market Cap: $10.73B
• Dividend Yield: N/A
• Average Volume (3M): 520.38K
• Price to Earnings (P/E): 38.4
• Beta (1Y): 2.36
• Revenue Growth: 3.31%
• EPS Growth: 76.94%
• Country: US
• Employees: 3,200
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 2.69
• Shares Outstanding: 30,419,830
• 10 Day Avg. Volume: 552,498
• 30 Day Avg. Volume: 520,376
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.63
• Enterprise Value/Revenue: 3.17
• Enterprise Value/Gross Profit: 14.27
• Enterprise Value/Ebitda: 13.52
• 1Y Price Target: $351.50
• Price Target Upside: -0.36% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 73 Outperform
• Price Target: $311.00 ▼(-11.84% Downside)

Sterling Construction's strong financial performance and positive earnings call are key strengths, supported by strategic corporate events. However, the stock's high valuation and moderate technical indicators slightly temper the overall score.

Positive Factors

Revenue Growth

The company's strong revenue growth, particularly in E-Infrastructure and Transportation segments, indicates robust demand and effective market penetration, supporting long-term expansion.

Strategic Acquisitions

The acquisition of CEC Facilities Group expands Sterling's capabilities and market reach, potentially driving revenue growth and competitive positioning in high-value sectors.

Financial Guidance Increase

Increased financial guidance reflects management's confidence in sustained growth and operational efficiency, bolstering investor confidence and strategic planning.

Negative Factors

Decline in Building Solutions

A decline in the Building Solutions segment due to market conditions could indicate challenges in diversifying revenue streams and maintaining growth across all business areas.

Free Cash Flow Decline

A decline in free cash flow growth may impact the company's ability to invest in new projects and acquisitions, potentially limiting future growth opportunities.

Transportation Backlog Decline

A decrease in the Transportation backlog could signal potential future revenue challenges, affecting the company's ability to sustain growth in this key segment.

Sterling Construction Business Overview & Revenue Model

Company Description

Sterling Construction (STRL) is a leading provider of infrastructure solutions, specializing in heavy civil construction, including roadways, bridges, and utilities. With a focus on both public and private sector projects, the company operates across various sectors such as transportation, water, and energy. Sterling Construction is committed to delivering high-quality services through innovative engineering and construction practices, enhancing the infrastructure landscape in the regions it serves.

How the Company Makes Money

Sterling Construction generates revenue primarily through contracts awarded for construction projects. The company engages in bidding for public sector projects, which typically include infrastructure improvements funded by government entities, as well as private sector contracts that may involve commercial developments or other construction needs. Key revenue streams come from project execution, which includes managing labor, materials, and equipment needed to complete construction tasks. Additionally, the company may enter joint ventures or partnerships with other firms to leverage resources and expertise, further enhancing its ability to win contracts and deliver projects efficiently. Factors contributing to earnings include the company's reputation for quality work, strong relationships with government agencies, and the ability to adapt to changing market conditions and regulatory environments.

Sterling Construction Financial Statement Overview

Summary

Sterling Construction exhibits strong financial health with robust revenue growth, improving profitability margins, and a solid balance sheet. The company has effectively reduced its leverage, but attention should be given to enhancing free cash flow growth.

Income Statement

Sterling Construction has demonstrated strong revenue growth, with a TTM increase of 1.5% and consistent annual growth over the past years. The company maintains healthy profitability margins, with a TTM gross profit margin of 22.19% and a net profit margin of 13.33%. EBIT and EBITDA margins are robust at 20.15% and 23.42%, respectively, indicating efficient operational management. The consistent improvement in margins and revenue growth highlights the company's strong market position and operational efficiency.

Balance Sheet

The balance sheet reflects a solid financial position with a manageable debt-to-equity ratio of 0.39 in the TTM period, showing a significant improvement from previous years. The return on equity is impressive at 35.49%, indicating effective use of shareholder funds. The equity ratio stands at 40.81%, suggesting a stable capital structure. However, the company should continue to monitor its debt levels to maintain financial flexibility.

Cash Flow

Sterling Construction's cash flow statement shows a slight decline in free cash flow growth at -4.39% in the TTM period, which could be a concern if it persists. However, the operating cash flow to net income ratio is healthy at 0.62, and the free cash flow to net income ratio is strong at 0.88, indicating good cash generation relative to earnings. The company should focus on improving free cash flow growth to enhance its cash flow stability.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.14B	2.12B	1.97B	1.77B	1.41B	1.23B
Gross Profit	474.46M	426.12M	337.64M	274.57M	192.07M	179.93M
EBITDA	500.68M	451.94M	277.34M	211.43M	142.32M	126.43M
Net Income	285.00M	257.46M	138.66M	106.46M	62.65M	42.31M
Balance Sheet
Total Assets	2.16B	2.03B	1.80B	1.47B	1.26B	982.39M
Cash, Cash Equivalents and Short-Term Investments	699.37M	664.20M	471.56M	185.26M	64.77M	72.69M
Total Debt	343.14M	369.27M	398.88M	491.16M	471.50M	385.23M
Total Liabilities	1.25B	1.21B	1.18B	991.13M	901.45M	713.66M
Stockholders Equity	881.75M	808.08M	618.91M	474.60M	358.77M	267.27M
Cash Flow
Free Cash Flow	434.54M	416.15M	414.20M	158.21M	112.28M	86.42M
Operating Cash Flow	495.44M	497.10M	478.58M	219.12M	158.93M	119.28M
Investing Cash Flow	-206.94M	-185.85M	-87.75M	-89.75M	-223.45M	-30.49M
Financing Cash Flow	-129.11M	-118.62M	-104.53M	-32.79M	80.57M	-70.33M

Sterling Construction Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 352.78
• 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 STRL, the sentiment is Positive. The current price of 352.78 is above the 20-day moving average (MA) of 339.39, above the 50-day MA of 305.86, and above the 200-day MA of 203.67, indicating a bullish trend. The MACD of 14.18 indicates Positive momentum. The RSI at 61.39 is Neutral, neither overbought nor oversold. The STOCH value of 59.91 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
DY	77 Outperform	$8.36B	32.45	20.65%	―	12.61%	10.33%
ROAD	76 Outperform	$6.96B	90.73	10.60%	―	39.18%	1.79%
GVA	74 Outperform	$4.74B	36.53	15.89%	0.48%	7.18%	77.84%
STRL	73 Outperform	$10.73B	38.36	36.72%	―	3.31%	76.94%
PRIM	72 Outperform	$7.53B	31.08	17.01%	0.23%	15.08%	55.10%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FLR	62 Neutral	$6.97B	1.78	102.24%	―	3.62%	943.43%

Sterling Construction Corporate Events

Sterling Construction Completes Acquisition of CEC Facilities Group

On September 1, 2025, Sterling Infrastructure completed its acquisition of CEC Facilities Group, a specialty electrical and mechanical contractor based in Irving, Texas. This acquisition is expected to significantly enhance Sterling’s E-Infrastructure capabilities, with CEC projected to contribute $130 to $138 million in revenue and $17 to $18 million in adjusted EBITDA for the remainder of 2025. The move aligns with Sterling’s growth strategy, aiming to deliver more efficient project solutions and drive industry innovation.

Sterling Construction Reports Record Q2 2025 Results

Sterling Infrastructure, Inc. reported record financial results for the second quarter of 2025, with a 21% increase in revenues and a 41% rise in adjusted diluted earnings per share. The company experienced significant growth in its E-Infrastructure and Transportation Solutions segments, despite a decline in its Building Solutions market. Sterling’s acquisition of CEC Facilities Group LLC is expected to enhance its service offerings and geographic expansion. The company raised its full-year guidance, anticipating continued growth in revenue and earnings.

Sterling Construction Expands Board with New Appointments

On July 9, 2025, Sterling Construction Company expanded its Board of Directors by appointing B. Andrew Rose and David Schulz, effective July 10, 2025. These appointments aim to leverage their extensive experience in finance and operations to enhance Sterling’s strategic value and governance as the company continues its growth trajectory.

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.

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.

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.

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.