Latest news with #SterlingInfrastructure
Globe and Mail
5 days ago
- Business
- Globe and Mail
Sterling Infrastructure: Navigating the Cycles of Construction and AI Growth
Explore the exciting world of Sterling Infrastructure (NASDAQ: STRL) with our contributing expert analysts in this Motley Fool Scoreboard episode. Check out the video below to gain valuable insights into market trends and potential investment opportunities! *Stock prices used were the prices of Jul. 9, 2025. The video was published on Aug. 4, 2025. Should you invest $1,000 in Sterling Infrastructure right now? Before you buy stock in Sterling Infrastructure, consider this: Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Learn More » The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sterling Infrastructure wasn't one of them. The 10 stocks that made the cut could produce monster returns in the coming years. Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you'd have $624,823!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you'd have $1,064,820!* Now, it's worth noting Stock Advisor's total average return is 1,019% — a market-crushing outperformance compared to 178% for the S&P 500. Don't miss out on the latest top 10 list, available when you join Stock Advisor. See the 10 stocks » *Stock Advisor returns as of August 4, 2025
Yahoo
5 days ago
- Business
- Yahoo
Sterling (NASDAQ:STRL) Surprises With Strong Q2
Civil infrastructure construction company Sterling Infrastructure (NASDAQ:STRL) announced better-than-expected revenue in Q2 CY2025, with sales up 5.4% year on year to $614.5 million. The company expects the full year's revenue to be around $2.13 billion, close to analysts' estimates. Its non-GAAP profit of $2.69 per share was 19.4% above analysts' consensus estimates. Is now the time to buy Sterling? Find out in our full research report. Sterling (STRL) Q2 CY2025 Highlights: Revenue: $614.5 million vs analyst estimates of $554.4 million (5.4% year-on-year growth, 10.8% beat) Adjusted EPS: $2.69 vs analyst estimates of $2.25 (19.4% beat) Adjusted EBITDA: $125.6 million vs analyst estimates of $110.5 million (20.4% margin, 13.7% beat) The company lifted its revenue guidance for the full year to $2.13 billion at the midpoint from $2.1 billion, a 1.2% increase Management raised its full-year Adjusted EPS guidance to $9.34 at the midpoint, a 8% increase EBITDA guidance for the full year is $445.5 million at the midpoint, above analyst estimates of $422.5 million Operating Margin: 17%, up from 12.5% in the same quarter last year Free Cash Flow Margin: 11.7%, down from 15.8% in the same quarter last year Market Capitalization: $8 billion On June 17th, Sterling announced that it had reached an agreement to acquire all of the assets of CEC Facilities Group LLC ("CEC"), and the transaction continues to progress towards closing. Company Overview Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ:STRL) provides civil infrastructure construction. Revenue Growth Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Luckily, Sterling's sales grew at a solid 9.9% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis. We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Sterling's recent performance shows its demand has slowed as its annualized revenue growth of 7% over the last two years was below its five-year trend. This quarter, Sterling reported year-on-year revenue growth of 5.4%, and its $614.5 million of revenue exceeded Wall Street's estimates by 10.8%. Looking ahead, sell-side analysts expect revenue to grow 7.2% over the next 12 months, similar to its two-year rate. This projection doesn't excite us and suggests its newer products and services will not catalyze better top-line performance yet. At least the company is tracking well in other measures of financial health. Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) stock benefiting from the rise of AI. Click here to access our free report one of our favorites growth stories. Operating Margin Sterling has managed its cost base well over the last five years. It demonstrated solid profitability for an industrials business, producing an average operating margin of 10.4%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it's a show of well-managed operations if they're high when gross margins are low. Analyzing the trend in its profitability, Sterling's operating margin rose by 7.2 percentage points over the last five years, as its sales growth gave it immense operating leverage. In Q2, Sterling generated an operating margin profit margin of 17%, up 4.5 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead. Earnings Per Share Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Sterling's EPS grew at an astounding 41.6% compounded annual growth rate over the last five years, higher than its 9.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded. Diving into the nuances of Sterling's earnings can give us a better understanding of its performance. As we mentioned earlier, Sterling's operating margin expanded by 7.2 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business. For Sterling, its two-year annual EPS growth of 40.5% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future. In Q2, Sterling reported adjusted EPS at $2.69, up from $1.67 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sterling's full-year EPS of $7.76 to grow 13.8%. Key Takeaways from Sterling's Q2 Results We were impressed that Sterling beat analysts' revenue and EBITDA expectations this quarter. We were also excited its full-year guidance was raised. Zooming out, we think this was a solid print. The stock traded up 4.1% to $283.65 immediately following the results. Sterling had an encouraging quarter, but one earnings result doesn't necessarily make the stock a buy. Let's see if this is a good investment. What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here, it's free. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
5 days ago
- Business
- Yahoo
BCKIY or STRL: Which Is the Better Value Stock Right Now?
Investors interested in stocks from the Engineering - R and D Services sector have probably already heard of Babcock International Group PLC (BCKIY) and Sterling Infrastructure (STRL). But which of these two stocks is more attractive to value investors? We'll need to take a closer look to find out. We have found that the best way to discover great value opportunities is to pair a strong Zacks Rank with a great grade in the Value category of our Style Scores system. The proven Zacks Rank puts an emphasis on earnings estimates and estimate revisions, while our Style Scores work to identify stocks with specific traits. Currently, Babcock International Group PLC has a Zacks Rank of #2 (Buy), while Sterling Infrastructure has a Zacks Rank of #3 (Hold). The Zacks Rank favors stocks that have recently seen positive revisions to their earnings estimates, so investors should rest assured that BCKIY has an improving earnings outlook. But this is just one piece of the puzzle for value investors. Value investors also try to analyze a wide range of traditional figures and metrics to help determine whether a company is undervalued at its current share price levels. Our Value category grades stocks based on a number of key metrics, including the tried-and-true P/E ratio, the P/S ratio, earnings yield, and cash flow per share, as well as a variety of other fundamentals that value investors frequently use. BCKIY currently has a forward P/E ratio of 17.68, while STRL has a forward P/E of 30.57. We also note that BCKIY has a PEG ratio of 0.63. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. STRL currently has a PEG ratio of 2.04. Another notable valuation metric for BCKIY is its P/B ratio of 8.53. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. For comparison, STRL has a P/B of 9.68. These metrics, and several others, help BCKIY earn a Value grade of B, while STRL has been given a Value grade of D. BCKIY has seen stronger estimate revision activity and sports more attractive valuation metrics than STRL, so it seems like value investors will conclude that BCKIY is the superior option right now. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Babcock International Group PLC (BCKIY) : Free Stock Analysis Report Sterling Infrastructure, Inc. (STRL) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
6 days ago
- Business
- Yahoo
AI bullishness is soaring, but pros see a major opportunity brewing in an overlooked corner of the market
As top tech stocks surge, some investors are focused on much smaller names. They believe the small- and mid-cap category holds high potential for those who can stomach volatility. With stock indexes notching record highs and meme stocks keeping retail traders on their toes, it's easy to get swept up by the animal spirits these days. Big tech leaders reported strong Q2 earnings in the last week, indicating that demand for artificial intelligence isn't slowing down. This has sparked even more bullishness from Wall Street as analysts raise their price targets on both old favorites and news. However, there are still opportunities in the less loved corners of the market, and some investors say they're turning to smaller stocks that look poised to gain. Big opportunities, small market caps The small-cap Russell 2000 may have struggled in 2025, but for investors willing to to their due diligence, there's an opportunity brewing in small- and mid-cap stocks. "Smaller caps are historically undervalued," Alexander Wah, founder and chief investment officer of Prince Capital, told Business Insider. Wah highlighted the importance of the Russell 2000, which he described as being frequently passed over by investors. "There's a lot of [companies ]that are being overlooked, that are quietly, quietly chipping away at larger industries, making their names known," he said. He highlighted Sterling Infrastructure, a little-known company that provides AI infrastructure solutions that stood out to him as an effective play on the AI boom. Brandon Nelson, senior portfolio manager at Calamos Investments, also highlighted Sterling it as a small-cap stock play on the AI trade. "AI-enabling infrastructure is a big theme," he said. Several small and mid-caps are exposed; anything in the data center building food chain should benefit." He named Sterling, Lumentum Holdings, and Argan as examples. All three stocks, which trade in the small-mid cap range, have demonstrated strong growth and are up substantially year-to-date. Wah noted that Sterling has risen roughly 4x since his fund's initial investment, which it maintains. A potential small-cap tailwind from Capitol Hill Certain small-cap names may also be poised to benefit from a policy shift. "Small caps tend to benefit from strong merger and acquisitions markets, as many small-cap companies are potential acquisition targets for larger firms," Joe Alger, investment research analyst at Crestwood Advisors, told BI. "The Trump administration is expected to be significantly less regulatory toward the M&A market."While Alger noted that M&A has slowed in recent years, he predicted that it could see a resurgence when investors have more clarity on tariffs, which he described as a likely tailwind for small-cap stocks. "I think that the smaller cap index is the most undervalued in comparison to the large type index that I've ever seen," Wah said. "This is great because it means that there is a lot of opportunity to find things that others are overlooking." Read the original article on Business Insider Sign in to access your portfolio
Yahoo
6 days ago
- Business
- Yahoo
Sterling (STRL) Reports Q2: Everything You Need To Know Ahead Of Earnings
Civil infrastructure construction company Sterling Infrastructure (NASDAQ:STRL) will be announcing earnings results this Monday after the bell. Here's what to look for. Sterling beat analysts' revenue expectations by 5.4% last quarter, reporting revenues of $430.9 million, down 2.1% year on year. It was a stunning quarter for the company, with full-year EBITDA guidance exceeding analysts' expectations and full-year revenue guidance exceeding analysts' expectations. Is Sterling a buy or sell going into earnings? Read our full analysis here, it's free. This quarter, analysts are expecting Sterling's revenue to decline 4.9% year on year to $554.4 million, a reversal from the 11.6% increase it recorded in the same quarter last year. Adjusted earnings are expected to come in at $2.25 per share. The majority of analysts covering the company have reconfirmed their estimates over the last 30 days, suggesting they anticipate the business to stay the course heading into earnings. Sterling has missed Wall Street's revenue estimates four times over the last two years. Looking at Sterling's peers in the construction and engineering segment, some have already reported their Q2 results, giving us a hint as to what we can expect. EMCOR delivered year-on-year revenue growth of 17.4%, beating analysts' expectations by 4.9%, and MasTec reported revenues up 19.7%, topping estimates by 4.2%. EMCOR traded down 2.3% following the results while MasTec was also down 8%. Read our full analysis of EMCOR's results here and MasTec's results here. Investors in the construction and engineering segment have had steady hands going into earnings, with share prices flat over the last month. Sterling is up 11.1% during the same time and is heading into earnings with an average analyst price target of $256.33 (compared to the current share price of $263.30). Unless you've been living under a rock, it should be obvious by now that generative AI is going to have a huge impact on how large corporations do business. While Nvidia and AMD are trading close to all-time highs, we prefer a lesser-known (but still profitable) semiconductor stock benefiting from the rise of AI. Click here to access our free report on our favorite semiconductor growth story. StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
