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1. Company Snapshot

1.a. Company Description

Granite Construction Incorporated operates as an infrastructure contractor and a construction materials producer in the United States.It operates through two segments, Construction and Materials segments.The Construction segment engages in the construction and rehabilitation of roads, pavement preservation, bridges, rail lines, airports, marine ports, dams, reservoirs, aqueducts, infrastructure, and site development for use by the public.


It also focuses on water-related construction for municipal agencies, commercial water suppliers, industrial facilities, and energy companies.The company also constructs various complex projects, including infrastructure/site development, mining, public safety, tunnel, solar, and power projects.The Materials segment is involved in the production of aggregates and asphalt for internal use, as well as for sale to third parties.


In addition, it offers site preparation, mining, and infrastructure services for residential development, energy development, commercial and industrial sites, and other facilities; and provides construction management professional services.The company serves federal agencies, state departments of transportation, local transit authorities, county and city public works departments, school districts and developers, utilities, contractors, landscapers, manufacturers of products requiring aggregate materials, retailers, homeowners, farmers, brokers, and private owners of industrial, commercial, and residential sites.Granite Construction Incorporated was founded in 1922 and is headquartered in Watsonville, California.

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1.b. Last Insights on GVA

Granite Construction Incorporated's recent performance was driven by strong Q2 2025 earnings, with net income attributable to Granite totaling $72 million, or $1.42 per diluted share. The company's adjusted net income attributable to Granite was $86 million, or $1.93 per diluted share. Recent acquisitions, including Warren Paving and Papich Construction, are expected to contribute approximately $425 million in revenue annually. Additionally, the company secured several projects, including the Garnet Valley Wastewater System project and a $158 million Guam Defense System project. Zacks upgraded the stock to a Buy rating, citing growing optimism about earnings prospects.

1.c. Company Highlights

2. Granite Construction Shines with Strong 2025 Performance

Granite Construction Incorporated reported a robust financial performance for 2025, with revenue increasing 10% to $4,400,000,000 and adjusted net income rising 29% to $276,000,000. The company's adjusted EBITDA margin expanded 31% to $527,000,000, driven by strong execution and a favorable market environment. Earnings per share (EPS) came in at $1.4, beating analyst estimates of $1.34. The company's construction segment delivered exceptional year-over-year revenue growth, driven by a healthy bidding environment and a strong project pipeline.

Publication Date: Feb -14

📋 Highlights
  • Record CAP Balance: $7 billion as of year-end 2025, driving growth and portfolio quality
  • Construction Revenue Growth: 10% increase to $4.4 billion, with 24% gross profit growth
  • Materials Segment Expansion: Organic and acquisition-driven growth via Warren Paving, targeting margin improvement
  • 2026 Financial Guidance: Revenue expected to reach $4.9–$5.1 billion, with 12–13% adjusted EBITDA margin
  • Margin Expansion Path: 70 basis points improvement by 2027, driven by Construction (1% improvement) and Materials (3% improvement) segments

Segment Performance

The construction segment was a key driver of Granite Construction's success in 2025, with revenue growth accelerating as expected. The materials segment also delivered organic top-line and bottom-line growth, with the acquisition of Warren Paving significantly expanding the company's addressable market. As Kyle T. Larkin noted, "Our Materials segment delivered organic top-line and bottom-line growth, and we significantly expanded our addressable market through acquisitions."

Outlook and Guidance

Granite Construction expects to continue its momentum in 2026, with revenue projected to grow to a range of $4,900,000,000 to $5,100,000,000. The company is targeting adjusted EBITDA margin in the range of 12% to 13% of revenue and expects to invest in its business through CapEx in the range of $140,000,000 to $160,000,000. Analysts estimate revenue growth of 7.5% for the next year, indicating a steady trajectory for the company.

Valuation and Metrics

Granite Construction's valuation metrics indicate a relatively high price-to-earnings (P/E) ratio of 29.58, suggesting that the market has high expectations for the company's future growth. The price-to-book (P/B) ratio stands at 4.84, while the enterprise value-to-EBITDA (EV/EBITDA) ratio is 14.23. The company's return on equity (ROE) is 17.58%, indicating a strong ability to generate profits from shareholder equity. With a net debt-to-EBITDA ratio of 2.0, Granite Construction's leverage is manageable, and the company is well-positioned to continue its growth trajectory.

3. NewsRoom

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Granite Construction Incorporated $GVA Shares Sold by American Century Companies Inc.

Mar -02

Source: defenseworld.net

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Sterling vs. Granite: Which Infrastructure Stock Is the Better Buy?

Feb -25

Source: zacks.com

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Fox Run Management L.L.C. Buys New Position in Granite Construction Incorporated $GVA

Feb -25

Source: defenseworld.net

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Granite Construction (NYSE:GVA) Hits New 1-Year High – Time to Buy?

Feb -22

Source: defenseworld.net

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Granite Awarded Preconstruction Services Agreement for Progressive Design-Build Project on I-80 East in Nevada

Feb -13

Source: businesswire.com

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Granite Construction Incorporated (GVA) Q4 2025 Earnings Call Transcript

Feb -12

Source: seekingalpha.com

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Granite Reports Fourth Quarter and Fiscal Year 2025 Results

Feb -12

Source: businesswire.com

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Principal Financial Group Inc. Lowers Stake in Granite Construction Incorporated $GVA

Feb -07

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.81%)

6. Segments

Construction

Expected Growth: 5.8%

Granite Construction's 5.8% growth is driven by increasing infrastructure spending, rising demand for transportation and water infrastructure projects, and a strong backlog of large-scale projects. Additionally, the company's focus on sustainable construction practices and its ability to navigate supply chain disruptions have contributed to its growth momentum.

Construction Materials

Expected Growth: 5.9%

Granite Construction Incorporated's 5.9% growth in Construction Materials is driven by increasing infrastructure spending, rising demand for aggregates in road construction, and growing adoption of sustainable building materials. Additionally, strategic acquisitions and expansion into new markets have contributed to the segment's growth.

7. Detailed Products

Transportation Infrastructure

Granite Construction Incorporated provides infrastructure solutions for transportation systems, including highways, roads, bridges, and airports.

Water and Wastewater Treatment

Granite Construction Incorporated offers water and wastewater treatment solutions, including design, construction, and operation of treatment plants and distribution systems.

Mining and Industrial Services

Granite Construction Incorporated provides mining and industrial services, including mine development, infrastructure construction, and maintenance services.

Federal and Heavy Civil Construction

Granite Construction Incorporated offers federal and heavy civil construction services, including construction of military bases, dams, and other large-scale infrastructure projects.

Rail and Transit

Granite Construction Incorporated provides rail and transit solutions, including design, construction, and maintenance of rail lines, stations, and facilities.

Site Development and Management

Granite Construction Incorporated offers site development and management services, including land acquisition, entitlements, and project management.

8. Granite Construction Incorporated's Porter Forces

Forces Ranking

Threat Of Substitutes

Granite Construction Incorporated operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand reputation and high-quality services help to mitigate the threat of substitutes.

Bargaining Power Of Customers

Granite Construction Incorporated has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong relationships with customers and its ability to provide customized solutions help to reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Granite Construction Incorporated relies on a network of suppliers to provide materials and equipment. While the company has some bargaining power due to its size and scale, suppliers also have some bargaining power due to the specialized nature of the materials and equipment required.

Threat Of New Entrants

The construction industry has high barriers to entry, including significant capital requirements and regulatory hurdles. Additionally, Granite Construction Incorporated's strong brand reputation and established relationships with customers make it difficult for new entrants to gain traction.

Intensity Of Rivalry

The construction industry is highly competitive, with many established players competing for market share. Granite Construction Incorporated faces intense competition from other construction companies, which can lead to pricing pressure and reduced margins.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 40.73%
Debt Cost 5.08%
Equity Weight 59.27%
Equity Cost 11.24%
WACC 8.73%
Leverage 68.71%

11. Quality Control: Granite Construction Incorporated passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Granite Construction

A-Score: 5.4/10

Value: 3.2

Growth: 7.9

Quality: 4.7

Yield: 1.0

Momentum: 7.0

Volatility: 8.7

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Growth: 8.9

Quality: 6.2

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Primoris Services

A-Score: 5.3/10

Value: 4.3

Growth: 8.4

Quality: 5.7

Yield: 0.0

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Volatility: 4.3

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Sterling Infrastructure

A-Score: 5.1/10

Value: 2.3

Growth: 8.7

Quality: 7.3

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

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Dycom Industries

A-Score: 5.0/10

Value: 2.0

Growth: 8.0

Quality: 5.2

Yield: 0.0

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Volatility: 5.3

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Tetra Tech

A-Score: 4.7/10

Value: 3.1

Growth: 7.3

Quality: 6.0

Yield: 1.0

Momentum: 4.0

Volatility: 7.0

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

133.84$

Current Price

133.84$

Potential

-0.00%

Expected Cash-Flows