ROAD Overview

Quarterly Financial Results: Construction Partners Inc reported mixed fourth-quarter results, with earnings of $1.02 per share falling short of the $1.09 consensus estimate, while sales of $899.849 million exceeded expectations of $892.713 million.

Sales Guidance: The company reaffirmed its fiscal year 2026 sales guidance, projecting between $3.400 billion and $3.500 billion.

CEO's Statement: CEO Fred J. (Jule) Smith, III highlighted strong growth and margin expansion, attributing success to disciplined execution and strong market demand across their Sunbelt operations.

Stock Performance and Analyst Ratings: Following the earnings announcement, Construction Partners shares dipped 0.4% to $100.06, with analysts adjusting price targets; B of A Securities lowered its target from $120 to $115, while Baird maintained an Outperform rating and reduced its target from $131 to $124.

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Management Overview: Construction Partners, Inc. (CPI) experienced a transformational year in 2025, achieving 54% revenue growth and a 92% increase in EBITDA, driven by strategic acquisitions in Texas, Oklahoma, and Tennessee, along with organic growth. The company ended the year with a record project backlog of $3 billion.

Fiscal 2026 Outlook: For fiscal year 2026, CPI projects revenue between $3.4 billion and $3.5 billion, with an adjusted EBITDA target of $520 million to $540 million. The company aims to expand EBITDA margins to 17% by 2030 as part of its ROAD 2030 strategic plan.

Financial Performance: In Q4 2025, CPI reported revenue of $900 million, a 67% year-over-year increase, and an adjusted EBITDA margin of 17.1%. The company also highlighted a gross profit of $439.1 million for the year, reflecting a 70% increase from the previous year.

Analyst Sentiment and Challenges: Analysts expressed cautious optimism regarding CPI's integration strategy and cash flow, while management acknowledged challenges in workforce retention and inflation. The company remains focused on reducing leverage to approximately 2.5x by late 2026.

Market Opening: U.S. stock markets are set to open in two hours.

Exact Sciences Corp. Performance: Exact Sciences Corp. (EXAS) saw a 17.3% increase in pre-market trading.

Applied Digital Corp. Performance: Applied Digital Corp. (APLD) experienced an 11.2% rise in pre-market trading.

Overall Market Sentiment: The significant gains in these stocks indicate positive market sentiment ahead of the market opening.