Core Viewpoint - Growth investors are increasingly focused on identifying stocks with above-average financial growth, but this can be challenging due to the associated risks and volatility [1] Group 1: Company Overview - Sterling Infrastructure (STRL) is currently highlighted as a recommended growth stock due to its favorable Growth Score and top Zacks Rank [2] - The company has a historical EPS growth rate of 40.8%, with projected EPS growth of 56.8% this year, significantly outperforming the industry average of 11.1% [4] Group 2: Financial Metrics - Sterling Infrastructure's year-over-year cash flow growth stands at 30.6%, exceeding the industry average of 17.2% [5] - The company's annualized cash flow growth rate over the past 3-5 years is 39.7%, compared to the industry average of 7% [6] Group 3: Earnings Estimates - The current-year earnings estimates for Sterling Infrastructure have been revised upward, with a 2.7% increase in the Zacks Consensus Estimate over the past month [7] - The combination of positive earnings estimate revisions and a Zacks Rank 1 positions Sterling Infrastructure favorably for potential outperformance [9]

Group 1 - Sterling Infrastructure (STRL) has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy based on recommendations from four brokerage firms, all of which are Strong Buy [2][4] - The Zacks Consensus Estimate for Sterling Infrastructure's earnings has increased by 2.7% over the past month to $9.57, reflecting analysts' growing optimism about the company's earnings prospects [13] - The recent change in the consensus estimate, along with other factors, has resulted in a Zacks Rank 1 (Strong Buy) for Sterling Infrastructure, suggesting a potential for stock price appreciation [14] Group 2 - Brokerage recommendations often exhibit a strong positive bias due to the vested interests of brokerage firms, leading to a higher number of Strong Buy ratings compared to Strong Sell ratings [6][10] - The Zacks Rank is a quantitative model based on earnings estimate revisions, which has shown a strong correlation with near-term stock price movements, making it a more reliable indicator than ABR [11][12] - The ABR may not always be up-to-date, while the Zacks Rank reflects timely changes in earnings estimates, providing a more accurate prediction of future stock prices [12]

Core Insights - Sterling Infrastructure, Inc. (STRL) is benefiting from increasing demand for data centers driven by trends in AI solutions, data creation, cloud migration, and sustainability efforts [1][2] - The company has optimistic growth projections based on strong data center demand and is implementing multi-year capital deployment plans to support revenue and profitability [2][3] Financial Performance - STRL reported a 24.2% year-over-year revenue growth in its E-Infrastructure Solutions segment for the first half of 2025, reaching $528.7 million, which constitutes 51% of total revenues [2][8] - The company raised its revenue forecast for 2025 to between $2.1 billion and $2.15 billion and adjusted EPS expectations to between $7.87 and $8.13 [3][8] Market Position - STRL's stock has surged 168.4% over the past six months, outperforming competitors Quanta Services, Inc. (PWR) and AECOM (ACM), which gained 55.7% and 37.1%, respectively [5][9] - The company is currently trading at a forward 12-month P/E ratio of 29.97, indicating a premium valuation compared to industry peers [10][12] Earnings Estimates - Earnings estimates for STRL have increased for 2025 and 2026, now projected at $9.57 and $10.98 per share, reflecting year-over-year growth of 56.9% and 14.7%, respectively [13]

Core Insights - Sterling Infrastructure, Inc. (STRL) is experiencing significant growth in its data center business, with expected earnings growth of 56.9% this year [1][5][7] Company Overview - Sterling is an engineering and construction firm with a market capitalization of $9.2 billion, operating in three segments: E-Infrastructure, Transportation Solutions, and Building Solutions [1][2] - The company focuses on regions including the Southern, Northeastern, Mid-Atlantic, Rocky Mountain areas, and the Pacific Islands [1] E-Infrastructure Segment - The E-Infrastructure segment encompasses data centers, manufacturing, warehouses, and distribution centers [2] - The acquisition of CEC Facilities Group is expected to enhance Sterling's E-Infrastructure capabilities amid strong demand for distribution and data centers [3][4] Recent Acquisition - On September 2, 2025, Sterling completed the acquisition of CEC Facilities Group, a specialty electrical and mechanical contractor, which is projected to add approximately $130 to $138 million in revenue and $0.22 to $0.24 in earnings per share [3][4] Earnings Estimates - Following the acquisition, analysts have raised their earnings estimates for 2025, with the Zacks Consensus Estimate increasing from $9.41 to $9.57, reflecting a 56.9% growth compared to last year's earnings of $6.10 [5][6] - The 2026 Zacks Consensus Estimate has also been revised upward from $10.65 to $10.98, indicating a 14.7% growth [6] Financial Performance - Sterling reported a record second quarter in 2025, with revenue increasing by 21% to $614.5 million, driven by a 29% increase in E-Infrastructure and a 24% rise in Transportation Solutions [8] - The company achieved a gross profit margin of 23.3%, up from 19.3% a year ago, and has a backlog of $2 billion, which is a 24% increase compared to the previous year [8][9] Stock Performance - Sterling's shares have surged by 88.3% in 2025, outperforming NVIDIA, which has gained 28.1% year-to-date [10] Valuation Metrics - Despite no longer being considered a "cheap" stock, Sterling remains attractive with a forward P/E of 31.5 and a PEG ratio of 2.1, indicating potential for growth within the infrastructure sector [13]

Group 1: Momentum Investing Overview - Momentum investing involves following a stock's recent trend, with the aim of buying high and selling even higher [1] - The Zacks Momentum Style Score helps define momentum characteristics, focusing on price change and earnings estimate revisions [2] Group 2: Sterling Infrastructure (STRL) Performance - Sterling Infrastructure currently holds a Momentum Style Score of B and a Zacks Rank of 1 (Strong Buy) [3][12] - STRL shares have increased by 2.67% over the past week, while the Zacks Engineering - R and D Services industry remained flat [6] - Over the last three months, STRL shares rose by 34.45%, and by 157.09% over the past year, significantly outperforming the S&P 500 [7] Group 3: Trading Volume and Earnings Outlook - STRL's average 20-day trading volume is 386,243 shares, indicating bullish sentiment with rising stock prices [8] - In the past two months, two earnings estimates for STRL have increased, raising the consensus estimate from $8.72 to $9.57 [10]

Market Overview - U.S. stock markets have experienced a significant bull run since the start of 2023, with major indexes like the Dow, S&P 500, and Nasdaq Composite nearing all-time highs [1] - The S&P 500 and Nasdaq Composite have achieved multiple all-time highs in 2025, while the S&P 400 mid-cap index is up 4.9% year to date, just 4.6% away from its 52-week high [2][9] Mid-Cap Stocks - Investment in mid-cap stocks is recognized as a strong portfolio diversification strategy, combining attributes of both small and large-cap stocks [3] - Mid-cap stocks are less vulnerable to losses during economic downturns due to lower international exposure, and they can outperform small caps in a thriving economy due to established management and market presence [4] Recommended Mid-Cap Stocks - Five mid-cap stocks with favorable Zacks Rank for the remainder of 2025 are Dillard's Inc. (DDS), Sterling Infrastructure Inc. (STRL), StoneX Group Inc. (SNEX), Armstrong World Industries Inc. (AWI), and Watts Water Technologies Inc. (WTS), all rated Zacks Rank 1 (Strong Buy) [5][9] Company Insights Dillard's Inc. (DDS) - Dillard's is enhancing growth through strategic initiatives in both brick-and-mortar and e-commerce, focusing on customer acquisition and retention [8] - The company has a strong financial position with solid liquidity and minimal rent obligations, alongside shareholder-friendly practices like dividends and buybacks [10] - Expected revenue and earnings growth rates for DDS are -0.4% and -15.8%, respectively, for the current year, with a 1.8% improvement in the earnings consensus estimate over the last 30 days [11] Sterling Infrastructure Inc. (STRL) - Sterling Infrastructure provides e-infrastructure, transportation, and building solutions, operating through three segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions [12][13][14] - The expected revenue and earnings growth rates for STRL are 6.5% and 56.9%, respectively, for the current year, with a 5.3% improvement in the earnings consensus estimate over the last seven days [15] StoneX Group Inc. (SNEX) - StoneX Group operates a global financial services network, offering execution, post-trade settlement, clearing, and custody services through various segments [16] - The expected revenue and earnings growth rates for SNEX are 4.9% and 21.7%, respectively, for the next year, with a 21.7% improvement in the earnings consensus estimate over the last 60 days [17] Armstrong World Industries Inc. (AWI) - Armstrong World Industries is a leading producer of ceiling systems for construction and renovation, operating in three segments: Mineral Fiber, Architectural Specialties, and Unallocated Corporate [18][19][20] - The expected revenue and earnings growth rates for AWI are 12.2% and 15.1%, respectively, for the current year, with a 0.7% improvement in the earnings consensus estimate over the last 30 days [21] Watts Water Technologies Inc. (WTS) - Watts Water Technologies designs and manufactures water safety and flow control products, reporting under three geographic segments: The Americas, Europe, and APMEA [22] - The expected revenue and earnings growth rates for WTS are 3.9% and 11.3%, respectively, for the current year, with a 0.8% improvement in the earnings consensus estimate over the last seven days [24]

Core Insights - Sterling Infrastructure, Inc. (STRL) has raised its full-year 2025 earnings guidance due to strong profitability and margin expansion in its second-quarter results [2][4][10] Financial Performance - In Q2 2025, adjusted earnings per share (EPS) increased by 41% year over year to $2.69, with gross profit margins expanding by 400 basis points to 23.3%, marking a new high for the company [3][10] - Adjusted EBITDA rose by 35% to $126 million, driven by revenue growth and improved gross margins [3] Strategic Focus - The company's emphasis on high-value projects and a disciplined portfolio mix has been crucial for driving profitability [2][5] - A strategic shift towards higher-margin service offerings, particularly in E-Infrastructure projects like data centers, has contributed to margin expansion [3][5] Guidance and Outlook - The adjusted EPS guidance for 2025 has been raised to a range of $9.21-$9.47, reflecting an 8% increase at the midpoint from previous expectations [4] - Transportation Solutions is also expected to contribute to profitability as resources are reallocated to stronger markets [4][5] Industry Context - Other infrastructure peers, such as EMCOR Group, Inc. and MasTec, Inc., have also reported improved profitability, indicating a broader trend of margin expansion within the industry [6][7][8] - STRL's stock has surged by 40.1% over the past three months, outperforming the Zacks Engineering - R and D Services industry's growth of 6% [9] Valuation Metrics - STRL's stock is currently trading at a forward 12-month price-to-earnings (P/E) ratio of 30.49, indicating a premium compared to industry peers [12] - Earnings estimates for 2025 and 2026 have trended upward, reflecting year-over-year growth of 50.8% and 12%, respectively [13]

Core Viewpoint - The U.S. stock market experienced declines on September 3, 2025, due to rising tariff concerns, increased long-term Treasury yields, and inflation fears, leading to investor uncertainty and sell-offs [1] Group 1: Investment Recommendations - In the current market environment, it is suggested that investors consider low-leverage stocks as safer investment options to mitigate risks during market turmoil [2][6] - Recommended stocks include NVIDIA Corp. (NVDA), Sterling Infrastructure (STRL), Northern Trust Corp. (NTRS), Dorman Products (DORM), and Natwest Group (NWG), all of which exhibit low leverage [2][10] Group 2: Understanding Leverage - Leverage refers to the practice of companies borrowing capital to operate and expand, typically through debt financing, which can pose risks if not managed properly [4][5] - A low debt-to-equity ratio is emphasized as a key indicator of financial stability, with a lower ratio indicating improved solvency and reduced financial risk [7][9] Group 3: Company Performance Highlights - NVIDIA Corp. reported a 56% year-over-year revenue increase to $46.7 billion in Q2 2025, with a 61% surge in earnings per share (EPS) [14][15] - Sterling Infrastructure completed an acquisition that positions it for sustained growth, with a projected earnings improvement of 45.9% for 2025 [16][17] - Northern Trust secured a contract with the State of New Mexico Educational Retirement Board, which is expected to enhance its recurring revenues and market presence [18][19] - Dorman Products achieved a 7.6% increase in net sales to $541 million in Q2 2025, with a 23% rise in adjusted EPS [20] - Natwest Group joined a debt financing syndicate for a significant infrastructure project, projecting a 20.1% sales improvement for 2025 [21][22]

Core Insights - Sterling Infrastructure, Inc. (STRL) has successfully acquired CEC Facilities Group, LLC, a specialized electrical and mechanical contractor, enhancing its service portfolio in mission-critical contracting [1][2] Group 1: Acquisition Impact - The acquisition of CEC Facilities is expected to expand Sterling's E-Infrastructure Solutions segment, allowing for more comprehensive end-to-end solutions for clients [2] - CEC Facilities is projected to generate revenues between $130 million and $138 million, with an adjusted EPS contribution of 22 to 24 cents, and an adjusted EBITDA contribution of approximately $17 to $18 million [3] Group 2: E-Infrastructure Growth - The E-Infrastructure Solutions segment is driving growth into 2025, fueled by increased demand for data centers and e-commerce distribution facilities [4] - The backlog for the E-Infrastructure segment increased by 44% year over year to $1.2 billion, contributing to a total backlog of $2 billion, which is up 24% [5] Group 3: Strategic Focus - Sterling's management is focused on long-term growth through both organic and inorganic opportunities, with plans for further small- to mid-sized acquisitions that align with strategic goals [6] - The company has demonstrated resilience in the face of challenges in the residential housing market, maintaining a diversified portfolio and focusing on high-margin markets [7][8] Group 4: Stock Performance - Sterling's shares have increased by 43.6% over the past three months, significantly outperforming the Zacks Engineering - R and D Services industry's 8% rise [7][8]

Core Viewpoint - Sterling Infrastructure, Inc. has completed the acquisition of CEC Facilities Group, significantly enhancing its E-Infrastructure capabilities and positioning the company for future growth and innovation in the industry [1][2]. Company Overview - Sterling operates through various subsidiaries across three segments: E-Infrastructure, Transportation, and Building Solutions, primarily in the Southern, Northeastern, Mid-Atlantic, Rocky Mountain regions, and the Pacific Islands [3]. - The E-Infrastructure Solutions segment focuses on large-scale site development and mission-critical electrical services for data centers, semiconductor fabrication, and power generation [3]. Financial Contributions from CEC - CEC is expected to contribute approximately $130 to $138 million in adjusted revenue for the remainder of calendar year 2025, with an estimated adjusted EBITDA of $17 to $18 million [5]. - The adjusted diluted earnings per share from CEC are projected to be around $0.22 to $0.24 [5]. CEO Remarks - The CEO of Sterling expressed excitement about the acquisition, highlighting it as a milestone in the company's growth strategy and emphasizing the potential for delivering faster and more efficient project solutions [2].