Sterling Infrastructure, Inc. (STRL) stock analysis

P/E below its 5-year median

Sterling Infrastructure's P/E of 17.1 is below its own 5-year median of 21.0.

P/E below the industry

Sterling Infrastructure's P/E of 17.1 is below the Heavy Construction Other Than Building Construction Contractors median of 28.1.

EV/EBITDA below its 5-year median

Sterling Infrastructure's EV/EBITDA of 10.4 is below its 5-year median of 11.3.

P/B above the industry

Sterling Infrastructure's price-to-book of 6.15 is above the Heavy Construction Other Than Building Construction Contractors median of 5.11.

Trading below fair value

The share price of $303.85 is below our fair value estimate of $404.83.

Margin of safety over 20%

The price is 24.9% below fair value, more than the 20% cushion we look for.

Revenue growing 10%+ a year

Revenue grew 12.1% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 39.2% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 75.5% over the last twelve months, against a 5-year average of 47.0% a year.

Growing faster than the industry

Revenue grew 93.1% over the last twelve months; the Heavy Construction Other Than Building Construction Contractors median is 5.2%.

Guidance raised

Sterling Infrastructure raised its Full Year 2026 Adjusted EBITDA outlook on Oct 28, 2026.

Gross margin improving

Gross margin was 23.8% over the last twelve months, against 23.1% a year earlier.

Return on equity over 15%

Return on equity was 43.3% over the last twelve months and averaged 27.5% over five years.

Return on capital over 10%

Return on invested capital was 51.1%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Sterling Infrastructure's return on equity of 43.3% is above the Heavy Construction Other Than Building Construction Contractors median of 14.8%.

Earnings grew over 5 years

Net income grew 47.0% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 12.9% over the last twelve months, against a 5-year average of 8.3%.

Net margin above the industry

Sterling Infrastructure's net margin of 12.9% is above the Heavy Construction Other Than Building Construction Contractors median of 1.6%.

Low debt

Debt is 6.3% of shareholders' equity, under the 40% we consider low.

Debt falling against equity

Debt to equity fell from 138% five years ago to 6.3%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 644% of total debt.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.04 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 5.43; above 3 is the safe zone and below 1.8 the distress zone.

No dividend

Sterling Infrastructure 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.