Even though President Biden decided not to run for re-election, his administration's Bipartisan Infrastructure Law, passed in November 2021, continues to be good news for companies that build things or help others build things.

Sterling Infrastructure (NYSE: STRL) is experiencing significant growth amid the U.S. infrastructure boom. The company's Q1 2024 financial results surpassed expectations, with revenue reaching $440.36 million and earnings per share of $1.00. The project backlog stood at $2.35 billion, a 45% increase from Q1 2023. Management's 2024 guidance anticipates revenue between $2.125-2.215 billion and EPS of $5.00-5.30. They aim to improve EBITDA by 16%.

That's all pretty great news, right? And its share price has risen accordingly. STRL stock has shown remarkable performance, growing over 455% in the past three years and 102% in the last year.

Why Infrastructure Matters

In 2019, the World Economic Forum ranked the U.S. 13^th in overall infrastructure quality. From the 1960s up through 2021, public infrastructure investment fell by over 40%. As of mid-May of this year, the infrastructure law has provided almost $454 billion in funding for everything from roadway and bridge improvements and low-emission buses to climate change sustainability and replacing lead pipes. The infrastructure business is booming!

Sterling Infrastructure operates in three main sectors: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. The largest and fastest-growing segment, E-Infrastructure Solutions, focuses on site development for e-commerce, data centers, and power generation. This sector is poised for substantial expansion, with the global smart infrastructure market projected to grow at a 23.1% CAGR to nearly $1 trillion by 2032.

What The Analysts Are Saying

Sterling Infrastructure's success is attributed to its growth-through-acquisitions strategy, increasing profitability, and steady cash flow. The company's diverse portfolio, strong project backlog, and positioning in high-growth markets make it an attractive option for investors interested in the infrastructure sector, particularly those seeking Growth at a Reasonable Price (GARP) opportunities.

While Wall Street coverage is limited, analyst Brent Thielman from DA Davidson raised the price target to $130.00, maintaining a Neutral rating. Analysts rate STRL as a Hold. As of the market close on Tuesday, shares were at $124.48, and after hours, they traded up to $126.24.

Neither Sean Kelland nor Stocks.News have positions in this company.