Stock (Symbol) |
Sterling Construction (STRL) |
Stock Price |
$210 |
Sector |
| Industrials & Energy |
Data is as of |
| June 16, 2025 |
Expected to Report |
| August 4 |
Company Description |
 Sterling Infrastructure, Inc. operates through a variety of subsidiaries, specializing in E-Infrastructure, Transportation and Building Solutions in the United States.
Its segments include E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. The E-Infrastructure Solutions segment is a provider of large-scale specialty site infrastructure improvement contracting services in the Southeastern, Northeastern and Mid-Atlantic United States. It serves large, blue-chip end users in the e-commerce, data center, distribution center, warehousing, energy sectors and more. The Transportation Solutions segment is comprised of heavy highway, aviation, and rail, and relies heavily on federal and state infrastructure spending. The principal markets of this segment are Arizona, Colorado, Hawaii, Nevada, Texas, and Utah. The Building Solutions segment is comprised of its residential and commercial businesses. It focuses on concrete construction of multifamily foundations. Source: Refinitiv |
Sharek’s Take |
 Sterling Construction (STRL) is an old-school construction company that has newfound profits in constructing datacenters. The company is known for highway construction and pouring concrete foundations. Then around a decade ago it got into making distribution centers and data centers. In 2023 the stock started to rise in a big way, and went from $30 to $200 by the end of 2024. Then in early 2025, fears if an AI spending slowdown sent the shares back below $100. But AI spending remained strong, and the shares have since roared back to $250 a share. Last qtr the company delivered 28% profit growth on just 7% revenue growth as profit margins expanded. E-Infrastructure Solutions segment led segment growth last quarter, as revenue grew 18% year over year driven by large data center projects. Data centers now make up over 65% of the segment’s backlog.
Sterling Construction is a construction company that works with heavy machinery to tackle huge construction projects, like expanding highways and building water infrastructure. Sterling Construction is a heavy civil construction company founded in 1955 and based in Texas. The company’s building projects include roadways, airports, office and residential areas, highway rest stops, and schools. Although these projects are good for revenue, civil construction has low-profit margins. In 2016, management dedicated itself to growing high-margin projects and expanding into other markets. STRL has extended its services to building high-tech data centers, as well as e-commerce structures, including warehouses and distribution centers for clients such as Amazon, Facebook, Home Depot and FedEx. The move into other areas of construction has been excellent for profits, which jumped 69% in 2020, 48% in 2021, 55% in 2022, 28% in 2023, and 38% in 2024. Today, Sterling has three business segments:
Sterling infrastructure has an Estimated Long Term Growth Rate of just 11% but profits have been growing at a much faster rate. My guess is this company is a 25% grower right now. When I updated my spreadsheet on STRL this qtr, I thought the stock is deserving of a 20 P/E which is $147 a share. This is obviously wrong, as the shares went past $250 today. STRL does not pay a dividend, but does buy back stock using an opportunistic approach. I have STRL on the radar and may add it to the Growth Portfolio. But I dropped rhe ball not buying in when the stock went from $200 to $100. |
One Year Chart |
 This chart is from 6/16 when STRL was $210. Today, 7/17, the stock is $251. Notice how the stock cratered earlier this year.
Qtrly profit growth has been excellent for a construction company. That’s due in part to higher profit margins. The Est. LTG is just 11%. It seems like this company is growing profits around 25% right now. The P/E of 29 makes the stock seem overvalued in my opinion. But that take has proven to be wrong. |
Earnings Table |
 Last qtr, Sterling Construction delivered profit growth of 28% and beat estimates of 26%. Revenue grew 7% (excluding RHB from a year ago). Gross margin increased to 22.0% from 17.5% a year ago due to improvements in E-infrastructure and Transportation. Operating margin was 23.0%, up from 16.8% a year ago.
Annual Profit Estimates are up this quarter, and have been trending higher. Management guidance for 2025 includes 12% revenue growth and 22% profit growth. Qtrly profit Estimates are for 21%, 24%, -52% and 15% profit growth the next 4 qtrs. Analysts think revenue will grow 10% next quarter. |
Fair Value |
 This company really pulled it together in 2020 as profits jumped 69% to record highs of $1.52 per share. STRL has been in a groove since.
But note this stock had a P/E of just 14 last year. With the stock at $251 now, that’s a 34 P/E. Note the P/E is 29 in this table as the stock was $210 when this table was done. |
Bottom Line |
 Sterling Construction (STRL) has a pretty ten-year chart, but that hasn’t always been the case. What’s not shown here is between 2003 and 2005 the stock went from $2 to $25. That’s a big move in a short period of time. STRL set an all-time high of $33 in 2006, then trended lower until it sank to $2 in 2015 (shown here). Management’s decision to evolve into other areas of construction turned the stock around.
Sterling is rolling right now. But the stock’s scorching hot and I’m not buying it. STRL is on the radar for the Growth Portfolio. |
Power Rankings |
Growth Stock Portfolio
N/AAggressive Growth Portfolio N/AConservative Stock Portfolio N/A |
