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. 13th 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.
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Julie Stoller
Contributing Writer
As a professional writer since 2012, Julie Stoller has covered many industries, from healthcare and technology to consumer products and industrials. She has written about IPOs, spinoffs, ETFs, stock splits, commodities, legislative actions impacting investors, and macroeconomic issues. While keeping up with the latest meme stocks and trends, Julie's special interests are discovering ...