Core Viewpoint - Sterling Infrastructure, Inc. is set to release its financial results for the second quarter of 2025 on August 4, 2025, after market close, followed by a conference call on August 5, 2025, to discuss the results and outlook for the year [1][2]. Company Overview - Sterling Infrastructure 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 [4]. - E-Infrastructure Solutions focuses on large-scale site development services for manufacturing, data centers, distribution centers, warehousing, and power generation [4]. - Transportation Solutions encompasses infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems [4]. - Building Solutions includes residential and commercial concrete foundations, parking structures, plumbing services, and surveys for new residential builds [4]. - The company emphasizes sustainability and responsible operations to enhance the quality of life for society [4]. Leadership Statement - CEO Joe Cutillo stated that the company builds and services the infrastructure essential for economic functioning, mobility, and national growth [5].

Group 1 - Babcock International Group PLC (BCKIY) has a Zacks Rank of 2 (Buy), indicating a positive earnings outlook, while Sterling Infrastructure (STRL) has a Zacks Rank of 3 (Hold) [3] - The Zacks Rank strategy targets companies with positive earnings estimate revision trends, which is a key factor for value investors [2][3] - Value investors utilize various valuation metrics, including P/E ratio, P/S ratio, earnings yield, and cash flow per share, to assess whether a company is undervalued [4] Group 2 - BCKIY has a forward P/E ratio of 19.07, significantly lower than STRL's forward P/E of 29.13, suggesting BCKIY may be more attractively priced [5] - BCKIY's PEG ratio is 0.68, indicating a favorable growth outlook compared to STRL's PEG ratio of 1.94, which suggests higher valuation relative to growth [5] - BCKIY's P/B ratio is 9.2, while STRL's P/B ratio is 9.22, showing that both companies are similarly valued in terms of book value, but BCKIY has a better overall valuation profile [6] - Based on these metrics, BCKIY holds a Value grade of B, while STRL has a Value grade of D, making BCKIY the more attractive option for value investors [6]

Company Overview - Sterling Infrastructure stock has gained notoriety amid President Joe Biden's $12 trillion infrastructure bill [1] - The company is a top performer in the industrial product sector and has continued to hit new all-time highs [2] - Sterling Infrastructure's total backlog currently stands at around $2 billion, providing a solid cushion for future revenue [8] Stock Performance - STRL has spiked nearly 100% over the last year and is up more than 40% year to date [3] - The stock has seen gains of more than 2,400% in the last 5 years [3] - Sterling Infrastructure stock lends a Zach's rank number three hold at the moment [14] Strategic Initiatives - Sterling Infrastructure announced in June that it will be acquiring CEC facilities group for $55 million, expanding its reach into mission critical electrical contracting for semiconductors and other data center projects [5] - The CEC acquisition is expected to add nearly $400 million to Sterling Infrastructure's topline this year alone and over $50 million in EBITDA [5] - Sterling Infrastructure has secured several AI related projects, including one with a reward of up to $100 million for a massive data center development in the southeastern United States [5] - The company focuses on high margin projects such as AI endeavors and the Hyundai engineering America facility in Georgia [6] Financial Outlook - Sterling Infrastructure's total sales are expected to dip 1% in fiscal 2025 to around $209 billion, but are expected to rebound in fiscal year 26 and rise about 8% to a new peak of $226 billion [9] - Sterling Infrastructure's bottom line is slated to expand 41% in fiscal year 25 to new peaks of $861 per share from record EPS of $610 last year [9] - Fiscal year 26 EPS is projected to spike another 10% to $948 [10] Valuation - Sterling Infrastructure stock trades at 281% times forward earnings, a slight premium to the benchmark S&P 500's 242% times forward earnings multiple and it Zach's engineering R&D services industry average of 227% times [11]

Core Insights - Sterling Infrastructure, Inc. (STRL) is focusing on large-scale mission-critical projects, particularly data centers, due to a weak housing market, which is positively impacting its revenue visibility and bottom line [1][4] - The demand for data center projects is strong, driven by the rise of Artificial Intelligence and digital transformation, with mission-critical projects making up 51% of the E-Infrastructure segment's backlog [2][3] - STRL's total backlog increased to $2.13 billion, with a year-over-year growth of 27% in the E-Infrastructure segment, indicating robust market trends [2][9] Company Performance - STRL's legacy residential business saw a 19% decline year-over-year, reflecting challenges in the housing market due to high mortgage rates and inflation [3][9] - The company is optimistic about its strategic shift towards mission-critical projects, which is expected to provide continuous revenue flow and mitigate profitability risks [3][4] - STRL raised its 2025 EPS guidance to $8.40-$8.90, indicating a 25.5% growth amid favorable infrastructure trends [9] Competitive Landscape - STRL faces competition from firms like Quanta Services, Inc. and MasTec Inc. in the public infrastructure sector, particularly in mission-critical infrastructure solutions [5] - Quanta's backlog grew 19.6% year-over-year to $16.37 billion, while MasTec's backlog increased by 23.7% year-over-year to $15.88 billion, showcasing strong competition in the market [6][7] Stock Performance - STRL's stock has surged 71.8% in the past three months, outperforming the Zacks Engineering - R and D Services industry and the broader market [8] - The stock is currently trading at a forward P/E ratio of 26.6, indicating a premium valuation compared to industry peers, reflecting strong market potential [11] - Earnings estimates for 2025 and 2026 remain unchanged at $8.61 and $9.48 per share, respectively, with year-over-year growth of 41.2% and 10.1% [13]

Core Viewpoint - Sterling Infrastructure (STRL) stock has reached new all-time highs, raising questions about whether to buy, hold, or take profits at over $240 per share [1] Performance Summary - STRL has increased nearly +100% over the last year, with a more than +40% rise year to date, and has gained nearly +2,400% over the last five years [2] Acquisition and Growth Strategy - Sterling Infrastructure announced the acquisition of CEC Facilities Group for $505 million, pending regulatory approval, which is expected to close in Q3 and add nearly $400 million to revenue this year and over $50 million in EBITDA [5][6] - The company is benefiting from the AI boom, securing several AI-related projects, including a $100 million contract for a data center development in the Southeastern United States [6] Project Focus and Backlog - The company is concentrating on high-margin projects, such as AI initiatives and the Hyundai Engineering America facility in Georgia, aimed at boosting EV and hybrid car production [7] - Sterling Infrastructure's total backlog currently stands at around $2 billion, providing a solid cushion for future revenue [9] Financial Outlook - Total sales are expected to dip 1% in fiscal 2025 to $2.09 billion, but are projected to rebound by 8% in FY26 to $2.26 billion [11] - The bottom line is expected to expand 41% in FY25 to $8.61 per share, with FY26 EPS projected to rise another 10% to $9.48 [13] Earnings Estimates - Current Zacks Consensus Estimates for FY25 EPS is $8.61, with year-over-year growth estimated at 41.15% [14] Valuation Metrics - STRL trades at 28.1X forward earnings, slightly above the S&P 500's 24.2X and the Zacks Engineering-R and D Services Industry Average of 22.7X [15] Strategic Insights - Following a significant rally, STRL holds a Zacks Rank 3 (Hold), indicating it remains a valuable asset in advancing America's infrastructure, though there is temptation to take profits at all-time highs [17] - Analysts have become bullish after the CEC acquisition announcement, suggesting STRL may serve as a prime buy-the-dip target [18]

Core Insights - Sterling Infrastructure, Inc. and Tutor Perini Corporation are capitalizing on a strong infrastructure cycle, focusing on large-scale public and civil projects, supported by federal and state spending programs like the Infrastructure Investment and Jobs Act (IIJA) [1][2][23] - Both companies have healthy backlogs and are experiencing consistent award wins, which are crucial for sustaining long-term earnings momentum [2][23] Sterling Infrastructure, Inc. (STRL) - Sterling is enhancing its position as a diversified infrastructure provider, focusing on high-margin design-build and e-infrastructure solutions in growth-heavy regions [2][4] - In Q1 2025, Sterling's E-Infrastructure Solutions segment saw revenues increase by 18% year-over-year, with adjusted operating income rising by 61% and segment margins exceeding 23% [5] - The total backlog for Sterling reached $2.1 billion, with the E-Infrastructure portion at $1.2 billion, reflecting a 27% year-over-year increase [6] - The Transportation Solutions segment's backlog stood at $861 million, up 11% year-over-year, indicating strong revenue visibility [7] - Management anticipates mid-single-digit revenue growth and mid-teen operating profit growth for 2025, supported by robust pipelines in specific markets [8] - Ongoing federal investment under the IIJA enhances Sterling's long-term growth prospects, with a book-to-burn ratio above 2X [9][10] Tutor Perini Corporation (TPC) - Tutor Perini is expanding its portfolio of civil and specialty construction projects, aligning with national funding priorities to benefit from multi-year government investments [11][12] - In Q1 2025, Tutor Perini secured approximately $2 billion in new awards, pushing its backlog to a record $19.4 billion, nearly doubling from the previous year [12] - The company is experiencing steady commercial demand across various sectors, including healthcare and education, which adds balance to its backlog [13] - Tutor Perini raised its 2025 earnings guidance, emphasizing disciplined bidding and execution efficiency [14] - The company is well-positioned to pursue profitable growth in 2026 and beyond due to its solid pipeline and sustained market demand [14] Share Price Performance - Year-to-date, Tutor Perini's share price has increased by 102.4%, significantly outperforming Sterling's 43.5% gain and the broader Construction sector's 2.7% rise [15] Valuation and Earnings Estimates - Tutor Perini is trading at a lower forward 12-month price-to-earnings (P/E) ratio compared to Sterling [17] - The Zacks Consensus Estimate for 2025 earnings per share indicates a 41.2% improvement for Sterling and a 155.9% increase for Tutor Perini [19] Conclusion - Both companies are well-positioned to benefit from strong infrastructure spending and expanding project pipelines, making them attractive options for investors seeking durable growth in the construction sector [23][24] - Tutor Perini's more attractive valuation and stronger projected EPS growth for 2025 suggest it may be the more compelling investment choice [25]

Group 1: Small-Cap Market Outlook - Small-cap stocks are expected to break out in the second half of 2025 due to potential interest rate cuts, improving macroeconomic conditions, and attractive valuations [1] - Institutional investors are beginning to rotate into small-cap stocks after two years of underperformance compared to large-cap peers [1] Group 2: Boot Barn (BOOT) - Boot Barn reported a 5% year-over-year growth in consolidated same-store sales for FY 2025 and projects a 2% growth for the current year while planning to increase store count by 14% [2] - The company anticipates a total net sales growth of 13%, but this guidance is contingent on raising prices due to tariffs, particularly from China and Mexico [3][4] - Despite tariff concerns slowing institutional buying in Q2 2025, Boot Barn's stock has increased over 35% in the last 12 months and over 11% in 2025, with a market cap exceeding $5 billion [5][6] Group 3: Sterling Infrastructure (STRL) - Sterling Infrastructure has seen its stock rise over 2,300% in the past five years, leading to a market cap of over $7 billion [7] - The company serves large blue-chip clients in e-commerce and data centers and has announced plans to acquire CEC Facilities Group to expand its opportunities [8] - Institutional buying for STRL reached $46 million in the current quarter, significantly outpacing institutional selling of $1 million [9] Group 4: Tactile Systems Technology (TCMD) - Tactile Systems, with a market cap of $230 million, specializes in home therapy solutions for chronic edema and related conditions, targeting a $10 billion total addressable market [11][12] - The company has shown steady revenue growth but is not consistently profitable, with TCMD stock down 41% in 2025 due to skepticism about its market size [13] - Institutional buying has slowed, but notable support comes from Congresswoman Tina Smith, who has made two purchases of the stock [14]

Core Insights - Sterling Infrastructure, Inc. has appointed B. Andrew Rose and David Schulz to its Board of Directors, effective July 10, 2025, enhancing the board's expertise in finance and operations [1] Group 1: Board Appointments - B. Andrew Rose has over 30 years of experience in finance, private equity, and industrial manufacturing, previously serving as President and CEO of Worthington Enterprises [2] - David Schulz brings over 25 years of leadership experience in finance and operations, currently serving as Executive Vice President and CFO at Wesco International [3] Group 2: Leadership Remarks - CEO Joe Cutillo expressed confidence in the new board members, highlighting their leadership and financial expertise as valuable for the company's growth [4] - Chairman Roger Cregg emphasized the combination of operational excellence and financial expertise that Rose and Schulz bring, which will strengthen the board's governance [4] Group 3: Company Overview - Sterling operates through subsidiaries in three segments: E-Infrastructure, Transportation, and Building Solutions, primarily in the Southern, Northeastern, Mid-Atlantic, Rocky Mountain regions, and the Pacific Islands [5] - The company is committed to sustainability and improving society's quality of life through responsible operations [5][6]

Core Viewpoint - Wall Street analysts' recommendations significantly influence investor decisions, but their reliability is questionable, particularly for Sterling Infrastructure (STRL) [1][5]. Group 1: Brokerage Recommendations - Sterling Infrastructure has an average brokerage recommendation (ABR) of 1.00, indicating a Strong Buy based on three brokerage firms' recommendations, all of which are Strong Buy [2]. - The ABR suggests a favorable outlook for Sterling Infrastructure, but relying solely on this metric may not be advisable due to the historical ineffectiveness of brokerage recommendations in predicting stock price appreciation [5][10]. Group 2: Analyst Bias and Zacks Rank - Brokerage analysts often exhibit a strong positive bias in their ratings, with a tendency to issue five "Strong Buy" recommendations for every "Strong Sell" [6][10]. - The Zacks Rank, which is based on earnings estimate revisions, is presented as a more reliable indicator of near-term stock performance compared to the ABR [8][11]. - The Zacks Rank is updated more frequently and reflects timely changes in earnings estimates, unlike the ABR, which may not always be current [13]. Group 3: Current Earnings Estimates and Recommendations - The Zacks Consensus Estimate for Sterling Infrastructure remains unchanged at $8.61, suggesting stable analyst views on the company's earnings prospects [14]. - Due to the unchanged consensus estimate and other factors, Sterling Infrastructure currently holds a Zacks Rank of 3 (Hold), indicating a cautious approach despite the Buy-equivalent ABR [15].

Core Insights - Sterling Infrastructure, Inc. is strategically focusing on high-value infrastructure projects, which is enhancing its margin profile and earnings quality [1] - The company reported a gross margin of 22% in Q1 2025, an increase of 400 basis points from the previous year [1][9] - The E-Infrastructure segment's adjusted operating margins expanded nearly 618 basis points year over year to 23.2%, driven by a focus on mission-critical projects like data centers [1][9] Company Strategy - Sterling's disciplined project selection strategy prioritizes large, complex builds, allowing it to avoid lower-margin work [2] - The shift towards aviation and rail projects in Transportation Solutions, along with reduced exposure to low-bid heavy highway work, has contributed to margin expansion [2] Future Outlook - The company expects full-year infrastructure growth supported by a multi-year backlog visibility, with the E-Infrastructure segment holding a backlog of $1.2 billion [3] - The total pipeline is nearing $2 billion when including future phase work, weighted towards higher-margin projects, indicating potential for sustained profitability [3] Industry Context - Competitors like Quanta Services, Inc. and EMCOR Group, Inc. are also focusing on high-return sectors such as data centers and transportation [5] - Quanta Services reported a 12-month backlog of $16.37 billion as of March 31, 2025, reflecting growing demand for electric grid upgrades and AI-driven infrastructure needs [6] - EMCOR Group's U.S. Electrical Construction and Facilities Services segment reported an operating margin of 12.5%, while the U.S. Mechanical Construction and Facilities Services segment posted an operating margin of 11.9% [7] Performance Metrics - Sterling's stock has gained 107.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry's growth of 48% [8] - The company is currently trading at a price-to-earnings ratio of 26.14X, compared to the industry's average of 21.56X [11] - The Zacks Consensus Estimate for Sterling's EPS indicates year-over-year growth of 41.2% and 10.1% for 2025 and 2026, respectively [13]