Granite Construction Inc (GVA) stock analysis

P/E against its history

Not enough price and earnings history to compare.

P/E against the industry

Needs positive earnings and enough profitable companies in the industry.

EV/EBITDA below its 5-year median

Granite Construction's EV/EBITDA of 11.5 is below its 5-year median of 13.8.

P/B above the industry

Granite Construction's price-to-book of 5.90 is above the Heavy Construction Other Than Building Construction Contractors median of 5.11.

Trading above fair value

The share price of $126.40 is above our fair value estimate of $120.93.

Margin of safety under 20%

The price is 4.5% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 10.3% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 31.4% a year over the last three fiscal years.

Earnings acceleration

Needs positive net income now, a year ago and five years ago.

Growing faster than the industry

Revenue grew 25.1% over the last twelve months; the Heavy Construction Other Than Building Construction Contractors median is 5.2%.

Guidance raised

Granite Construction raised its 2029 Operating cash flow outlook on Oct 29, 2026.

Gross margin slipping

Gross margin was 16.1% over the last twelve months, against 16.4% a year earlier.

Return on equity under 15%

Return on equity was -25.2% over the last twelve months and averaged 8.9% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 15.9%, above the 10% that usually covers the cost of capital.

Return on equity below the industry

Granite Construction's return on equity of -25.2% is below the Heavy Construction Other Than Building Construction Contractors median of 14.8%.

Earnings over 5 years

Needs positive net income five years ago and in the latest year.

Net margin below its 5-year average

Net margin was -5.0% over the last twelve months, against a 5-year average of 2.3%.

Net margin below the industry

Granite Construction's net margin of -5.0% is below the Heavy Construction Other Than Building Construction Contractors median of 1.6%.

High debt

Debt is 164% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 34.7% five years ago to 164%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 37.5% of total debt.

Interest not well covered

Operating income covers interest expense 1.1 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.11 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.64; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Granite Construction paid dividends worth 0.4% of the share price over the last twelve months.

Yield below Treasuries

The 0.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Granite Construction yields 0.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Earnings cover

Needs dividends paid and net income.

Covered by free cash flow

Dividends take 5.1% of free cash flow.