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1. Company Snapshot

1.a. 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.

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1.b. Last Insights on STRL

Sterling Infrastructure's recent performance is driven by robust growth in its E-Infrastructure Solutions segment, fueled by surging demand for data centers and AI-related projects. The company's integration of CEC Facilities Group and expanding presence in key infrastructure markets also underscore its growth strength. With a record Q3 2025 results and robust order backlog, the company is poised for long-term growth. Its fourth-quarter results are expected to reflect strength in high-margin infrastructure work and disciplined project execution.

1.c. Company Highlights

2. Sterling Infrastructure's Strong 2025 Performance Sets Stage for Continued Growth

Sterling Infrastructure achieved a robust financial performance in 2025, with revenue growth of 32% and adjusted diluted EPS growth of 53%. The company's full-year gross margins reached 23%, and adjusted EBITDA margins exceeded 20% for the first time, demonstrating significant operational improvement. In the fourth quarter, revenue grew 69%, driven by 123% growth in E-Infrastructure Solutions and 24% growth in Transportation Solutions. Adjusted earnings per share grew 78% to $3.08, beating analyst estimates of $2.66, and adjusted EBITDA grew 70% to $142 million. Operating cash generation remained strong at $440 million.

Publication Date: Mar -01

📋 Highlights
  • Revenue & EPS Surge: 32% revenue growth and 53% adjusted diluted EPS increase in 2025, with Q4 revenue up 69% driven by 123% growth in E-Infrastructure Solutions.
  • Margin Expansion: Full-year gross margins reached 23%, and adjusted EBITDA margins exceeded 20% for the first time, alongside $142 million adjusted EBITDA growth (70%) in Q4.
  • Backlog & Guidance: $3 billion signed backlog (78% YoY increase) and 2026 revenue guidance of $3.05–$3.2 billion, with E-Infrastructure expected to grow 40%+ due to data center demand.
  • Strategic Expansion: $1 billion in high-probability future phase work (hyperscaler projects), $374 million remaining for share repurchases, and modular expansion to 300,000+ sq ft to boost productivity.
  • Market Opportunities: $1 billion semiconductor market opportunity (7–10 years), geographic expansion into Texas, Pacific Northwest, and Northeast, leveraging AI tools for 15–20% capacity gains in project management.

Backlog and Guidance

The company's backlog position and strong visibility drive its confidence in the future, with signed backlog at the end of the quarter totaling $3 billion, a 78% increase from year-end 2024. For 2026, the company is guiding for revenue of $3.05 billion to $3.2 billion, diluted EPS of $11.65 to $12.25, and adjusted diluted EPS of $13.45 to $14.05. E-Infrastructure is expected to see revenue growth of 40% or higher in 2026, driven by strength in data center demand and geographic expansion.

Valuation and Growth Prospects

With a current P/E Ratio of 45.29 and EV/EBITDA of 25.83, the market appears to be pricing in significant growth prospects. The company's ROIC of 18.72% and ROE of 30.17% indicate strong profitability. Analysts estimate next year's revenue growth at 10.5%, which, combined with the company's guidance, suggests continued momentum. The company's focus on site development and electrical footprint expansion, as well as its opportunistic approach to acquisitions, is expected to drive growth. The use of AI-driven tools is also expected to improve efficiency and quality, potentially widening the company's differentiation versus peers.

Strategic Initiatives and Outlook

The company is expanding into new markets, including Texas, and is seeing significant opportunities in the semiconductor and data center sectors. The CEC modular expansion is expected to improve productivity and cost, and the company is well-positioned to handle a shift in mix towards semiconductors and away from data centers. With a strong quarter and a solid outlook, the company is optimistic about its prospects, citing its team's performance. The company's model allows for comparable margins across different sectors, and it is expected to drive growth in the coming years.

3. NewsRoom

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CEO Of Tiny Company Tells Jim Cramer They've Outperformed NVIDIA Since 2015

Mar -02

Source: 247wallst.com

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ACM or STRL: Which Is the Better Value Stock Right Now?

Mar -02

Source: zacks.com

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Sterling Infrastructure Q4 Earnings Call Highlights

Mar -02

Source: defenseworld.net

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Will Sterling's 78% Backlog Surge Remain Sustainable Through 2026?

Feb -27

Source: zacks.com

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Sterling Infrastructure: Growing Backlog At Richer Margins - Euphoric Rally Triggers Valuation Risks

Feb -27

Source: seekingalpha.com

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Sterling Infrastructure, Inc. (STRL) Q4 2025 Earnings Call Transcript

Feb -26

Source: seekingalpha.com

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Sterling Q4 Earnings & Revenues Beat Estimates, Stock Up

Feb -26

Source: zacks.com

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Buy 5 Construction Stocks Set to Soar on AI-Powered Data Center Boom

Feb -26

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (10.22%)

6. Segments

E-Infrastructure Solutions

Expected Growth: 12%

Sterling Infrastructure's E-Infrastructure Solutions segment growth is driven by increasing demand for digital transformation, cloud adoption, and cybersecurity services. The 12% growth rate is attributed to the rising need for efficient data management, network infrastructure upgrades, and compliance with regulatory requirements, particularly in the government and healthcare sectors.

Transportation Solutions

Expected Growth: 9%

Sterling Infrastructure's Transportation Solutions segment growth is driven by increasing government investments in infrastructure development, rising demand for road and highway construction, and growing adoption of sustainable transportation solutions. Additionally, the company's strategic acquisitions and partnerships have expanded its service offerings, contributing to the 9% growth rate.

Building Solutions

Expected Growth: 8%

Sterling Infrastructure's Building Solutions segment growth is driven by increasing demand for infrastructure development, government investments in public-private partnerships, and a strong backlog of projects. Additionally, the company's strategic acquisitions, expansion into new markets, and focus on sustainable construction practices contribute to its growth momentum.

7. Detailed Products

Heavy Civil Construction

Sterling Infrastructure provides heavy civil construction services for highways, roads, bridges, and other infrastructure projects.

Specialty Services

Sterling Infrastructure offers specialty services such as paving, concrete, and structural concrete repair.

Residential and Commercial Building

Sterling Infrastructure provides construction services for residential and commercial buildings, including apartments, offices, and retail spaces.

Water and Wastewater

Sterling Infrastructure provides construction and maintenance services for water and wastewater treatment plants, pipelines, and other water infrastructure.

Aviation

Sterling Infrastructure provides construction and maintenance services for airports, including runway construction, taxiway rehabilitation, and airport facility upgrades.

Industrial

Sterling Infrastructure provides construction and maintenance services for industrial facilities, including power plants, refineries, and manufacturing facilities.

8. Sterling Infrastructure, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Sterling Infrastructure, Inc. is medium due to the availability of alternative infrastructure development companies.

Bargaining Power Of Customers

The bargaining power of customers for Sterling Infrastructure, Inc. is low due to the company's strong brand reputation and limited customer concentration.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Sterling Infrastructure, Inc. is medium due to the presence of multiple suppliers and the company's moderate bargaining power.

Threat Of New Entrants

The threat of new entrants for Sterling Infrastructure, Inc. is high due to the relatively low barriers to entry in the infrastructure development industry.

Intensity Of Rivalry

The intensity of rivalry for Sterling Infrastructure, Inc. is high due to the presence of several established players in the industry and the high competition for projects.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 36.82%
Debt Cost 9.81%
Equity Weight 63.18%
Equity Cost 9.97%
WACC 9.91%
Leverage 58.27%

11. Quality Control: Sterling Infrastructure, Inc. passed 7 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

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Yield: 1.0

Momentum: 7.0

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Yield: 0.0

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Growth: 9.8

Quality: 7.2

Yield: 0.0

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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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IES Holdings

A-Score: 5.0/10

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Growth: 9.4

Quality: 7.1

Yield: 0.0

Momentum: 8.5

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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

432.87$

Current Price

432.87$

Potential

-0.00%

Expected Cash-Flows