Stock Price & Analysis

Hold STRL as it has a Zacks Rank #2 (Buy) with positive earnings revisions, but consider waiting for market conditions to stabilize given its high valuation and recent underperformance.

Price Prediction for STRL Stock in 2025

The price prediction for Sterling Infrastructure (STRL) stock in 2025 is expected to range between $140 and $150.

1. Strong Earnings and Guidance: Sterling Infrastructure reported strong Q4 earnings, beating analyst expectations with an EPS of $1.46 and provided optimistic 2025 revenue guidance of $2.00-$2.15 billion, signaling continued growth.
2. Valuation and Analyst Sentiment: The stock currently trades at a forward P/E of 15.76, slightly above its industry average, with a PEG ratio of 1.05, indicating fair valuation. Analysts have recently revised estimates upward, contributing to its Zacks Rank #2 (Buy).
3. Technical Analysis: The stock is trading near its Fibonacci pivot point of $122.30, with resistance levels at $137.13 and $146.30. Recent price action suggests bullish momentum with a current price of $133.5.

The predicted range of $140-$150 is supported by the company's strong earnings outlook and growth in high-margin segments like e-infrastructure.

The S1 support level for STRL Stock is $117.8 ,The R1 resistant level for STRL Stock is $132.45.

As of the end of day on 2025-03-27, the price of STRL Stock was $119.23.

The target price for STRL Stock according to analyst rating is 185.00, with the highest price target at 185.00 and the lowest at 185.00. Analysts have a Moderate Buy rating on STRL Stock overall.

The market cap of STRL is $3.6B.

Analysis and Insights

Sterling Infrastructure (STRL) appears to be overvalued based on several key metrics and recent performance. Here's a concise breakdown:

1. Valuation Metrics:

   • PE Ratio: STRL's PE ratio of 24.59 (Q3 2024) and 20.38 (Q4 2024) is significantly higher than the industry average of 15-20, indicating a premium valuation.
   • EV/EBITDA: At 12.79 (Q3) and 14.53 (Q4), the stock is trading at a higher multiple compared to industry peers, suggesting overvaluation.
   • PS Ratio: The price-to-sales ratio of 2.16 (Q3) and 2.48 (Q4) is elevated, reflecting high expectations for future growth.
   • PB Ratio: A price-to-book ratio of 6.21 (Q3) and 6.39 (Q4) is well above the industry average, further indicating overvaluation.

2. Dividend Yield:

   • The dividend yield is 0% for both Q3 and Q4 2024, indicating no return of capital to shareholders through dividends.

3. Recent Performance:

   • STRL has underperformed the market, with a 20.11% decline over the past month compared to the Construction sector's 9.25% loss and the S&P 500's 8.15% decline.

4. Leadership Changes:

   • The appointment of an interim CFO and the search for a permanent CFO may create uncertainty, potentially impacting investor confidence.

5. Market Sentiment:

   • The stock's underperformance and high valuations, combined with leadership changes, suggest overvaluation.

Conclusion

Based on the analysis, STRL appears overvalued due to high valuation metrics, lack of dividend yield, and recent underperformance. Investors should exercise caution and consider waiting for a price correction or improved fundamentals before investing.

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.

The price prediction for STRL stock by 2030 is approximately $200 per share. This forecast is based on Sterling Infrastructure's strong earnings performance, with a record backlog of $1.83 billion and a robust revenue outlook for 2025. The company's focus on high-margin segments like e-infrastructure and data centers, which currently account for over 60% of the segment's backlog, supports long-term growth. Additionally, the stock's current momentum and positive earnings guidance suggest sustained upward potential.

STRL has a total of 3000 employees.