Construction Partners, Inc. (ROAD) stock analysis

P/E below its 5-year median

Construction Partners's P/E of 33.0 is below its own 5-year median of 67.2.

P/E above the industry

Construction Partners's P/E of 33.0 is above the Heavy Construction Other Than Building Construction Contractors median of 28.1.

EV/EBITDA below its 5-year median

Construction Partners's EV/EBITDA of 21.7 is below its 5-year median of 22.7.

P/B below the industry

Construction Partners's price-to-book of 4.58 is below the Heavy Construction Other Than Building Construction Contractors median of 5.11.

Trading below fair value

The share price of $84.03 is below our fair value estimate of $92.10.

Margin of safety under 20%

The price is 8.8% below fair value, less than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 29.3% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 64.9% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 91.2% over the last twelve months, against a 5-year average of 20.4% a year.

Growing faster than the industry

Revenue grew 41.9% over the last twelve months; the Heavy Construction Other Than Building Construction Contractors median is 5.2%.

Guidance raised

Construction Partners raised its fiscal year 2026 Revenue outlook on Aug 7, 2026.

Gross margin improving

Gross margin was 15.8% over the last twelve months, against 14.8% a year earlier.

Return on equity under 15%

Return on equity was 15.0% over the last twelve months and averaged 9.3% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 9.2%, below the 10% that usually covers the cost of capital.

Return on equity above the industry

Construction Partners's return on equity of 15.0% is above the Heavy Construction Other Than Building Construction Contractors median of 14.8%.

Earnings grew over 5 years

Net income grew 20.4% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 4.1% over the last twelve months, against a 5-year average of 2.9%.

Net margin above the industry

Construction Partners's net margin of 4.1% is above the Heavy Construction Other Than Building Construction Contractors median of 1.6%.

High debt

Debt is 172% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 23.0% five years ago to 172%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 19.8% of total debt; we look for at least 20%.

Interest not well covered

Operating income covers interest expense 2.7 times; we look for at least 5.

Short-term assets cover short-term debts

Current assets are 1.57 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.66; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Construction Partners has not paid a dividend in the last twelve months.

Yield against Treasuries

No dividend.

Yield against the market

No dividend.

Dividend stability

No dividend.

Earnings cover

No dividend.

Cash-flow cover

No dividend.