Stock Price & Analysis

Based on the provided data and recent market activity, here's a concise analysis of STRL stock:

Technical Analysis

The stock has shown significant weakness recently, declining from $149.72 in early February to current levels around $124.27, representing a -17% drop. The stock is currently trading below both its 5-day and 10-day moving averages, indicating strong bearish momentum in the short term.

Fundamental Outlook

• Revenue Growth: Expected to reach $533.75 million in Q4 2024, representing a 9.83% YoY growth
• EPS Projection: Forecasted at $1.34 for Q4 2024, showing 3.08% YoY growth
• Key Business Segments:
  • E-Infrastructure Solutions (45% of revenue): Strong growth in data center projects
  • Transportation Solutions (38% of revenue): Benefiting from government infrastructure spending

Recent Developments

• The company has maintained a solid backlog of $2.1 billion
• Data center business showing particular strength with 90% YoY revenue growth
• Strong balance sheet with $326 million in net cash position

Recommendation

SELL - The current technical weakness combined with valuation concerns suggests taking profits or reducing positions:

1. Stock is trading at a premium valuation with PEG ratio over 2x compared to historical 1x
2. Technical indicators show continued downward momentum
3. Expected earnings growth slowdown to 8.14% in FY2025
4. Currently trading at nearly 30% premium to fair value according to some analysts

Based on the provided data and recent market analysis, here's the price prediction for STRL stock in 2025:

Sterling Infrastructure (STRL) is projected to reach $155-165 by end of 2025, representing a potential upside of 25-33% from current levels. This forecast is supported by strong earnings growth expectations of 14.8% in 2025 and the company's continued momentum in infrastructure projects. The recent pullback from $180+ levels provides an attractive entry point, while technical indicators suggest the stock is currently oversold with RSI at 30.73.

The price target is based on:

1. Positive industry outlook with construction sector expected to benefit from infrastructure spending
2. Company's strong execution with projected revenue growth of 9.83% and EPS growth of 3.08%
3. Current technical support level around $124 (Fibonacci S1) suggesting limited downside risk

The S1 support level for STRL Stock is $120.52 ,The R1 resistant level for STRL Stock is $148.74.

As of the end of day on 2025-02-21, the price of STRL Stock was $116.74.

The target price for STRL Stock according to analyst rating is 125.00, with the highest price target at 125.00 and the lowest at 125.00. Analysts have a Moderate Buy rating on STRL Stock overall.

The market cap of STRL is $3.6B.

Based on the comprehensive data analysis, STRL appears to be overvalued at its current price of $124.27 for several key reasons. The company's P/E ratio has nearly doubled from 10.37x in 2022 to 19.79x in 2023, indicating significant multiple expansion. The EV/EBITDA ratio also increased substantially from 5.86x to 9.79x, suggesting stretched valuation metrics. The price-to-sales ratio jumped from 0.57x to 1.39x, while price-to-book rose from 2.11x to 4.39x, both showing premium valuations compared to historical levels. Technical indicators reveal RSI at 30.73 and stochastic at 12.01, suggesting oversold conditions but continued downward momentum.

The stock has declined significantly from its recent highs, falling from $206.07 to current levels around $124.27. While the company maintains strong fundamentals with improving margins (gross margin increased from 14.72% to 16.35% YoY) and healthy revenue growth (11.5% YoY to $1.97B), the current valuation multiples appear to be pricing in much of this growth potential.

Recent analyst reports suggest a consensus price target of $191.50, indicating potential upside, but this target may need revision given the recent market correction and multiple compression across the construction sector. The company's focus on e-infrastructure and data centers provides strong growth drivers, but these positives appear largely reflected in the current valuation.

Sterling Infrastructure, Inc. operates through a variety of subsidiaries, specializing in E-Infrastructure, Transportation and Building Solutions in the United States. Its segments include E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. The E-Infrastructure Solutions segment is a provider of large-scale specialty site infrastructure improvement contracting services in the Southeastern, Northeastern and Mid-Atlantic United States. It serves large, blue-chip end users in the e-commerce, data center, distribution center, warehousing, energy sectors and more. The Transportation Solutions segment is comprised of heavy highway, aviation, and rail, and relies heavily on federal and state infrastructure spending. The principal markets of this segment are Arizona, Colorado, Hawaii, Nevada, Texas, and Utah. The Building Solutions segment is comprised of its residential and commercial businesses. It focuses on concrete construction of multifamily foundations.

Based on the recent market data and analyst reports, Sterling Infrastructure (STRL) is projected to reach $195-210 by 2030, driven by its strong infrastructure project pipeline and consistent earnings growth showing a 9.83% year-over-year revenue increase. The company's strategic positioning in the Engineering - R&D Services industry, coupled with its current Forward P/E ratio of 20.14 and PEG ratio of 1.34, suggests sustained growth potential. Technical indicators and market sentiment analysis point to a bullish long-term trajectory, supported by the company's successful execution of civil construction projects and positive analyst revisions.

STRL has a total of 3000 employees.