Value
6.0/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 2.9 |
| P/S | 9.4 |
| EV/EBITDA | 1.8 |
| Fwd P/E | 6.4 |
| PEG | 10.0 |
| Analyst target | 4.0 |
- ▸Forward P/E: 20.1x
- ▸PEG: 0.17
GVA · Why this verdict
Why Granite Construction Incorporat (GVA) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictSELL
Overall score5.9/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
Granite Construction is delivering exceptional revenue and earnings growth — 30% top-line expansion and a four-quarter beat streak averaging 40% above consensus — against a technically strong backdrop; the case for new capital is constrained by a quality score below the minimum investable threshold, a thin 2.9% upside to target, and a 70% customer concentration in government agencies that creates a single-source dependency risk.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
Government agencies represent 70% of customer revenue, classified as a high-concentration risk — a level of dependency that leaves the business acutely sensitive to shifts in public infrastructure spending, budget cycles, or contract award timing. Bear case | Government-sector revenue should remain stable or grow, with no single awarded contract accounting for more than 30% of total revenue, as evidence that the concentration is diversified across multiple agency relationships. | →Stable |
| CounterGovernment contracts often come with long-dated, predictable payment schedules and low counterparty default risk — the concentration may provide revenue visibility that a more fragmented private-sector customer base would not. | ||
Revenue grew 30% year over year while the company beat earnings estimates in each of the last four quarters with an average positive surprise of nearly 40%, including a standout most-recent quarter where actual results exceeded estimates by 136% — a combination of top-line momentum and delivery well above expectations. Growth breakdown | Revenue growth should sustain above 15% year over year and earnings surprises should remain positive for at least two more consecutive quarters, confirming that the growth profile is durable rather than one-quarter-driven. | →Stable |
| CounterThe earnings quality note flags that free cash flow runs at only 70% of net income, meaning a portion of reported earnings is not converting into cash — if this gap widens, the headline growth may overstate the real economic improvement. | ||
Four consecutive earnings beats with an average positive surprise of 39.79% demonstrate a pattern of consistently under-promising and over-delivering, including a most-recent quarter where the company turned an expected loss into a small gain. Catalyst breakdown | The beat streak should extend for at least two more quarters with surprises above 5%, maintaining the pattern of reliable outperformance against consensus estimates. | →Stable |
| CounterA beat that converts an expected loss to a small gain, as seen in the most recent quarter, may reflect a one-time item rather than operational strength — if the underlying business reverts to consensus-tracking behavior, the streak loses its signal value. | ||
Business quality scores below the minimum investable floor, and the current price sits just 2.9% below the take-profit target — leaving a reward-to-risk ratio of 0.27, far below the minimum bar of 1.5 — making a new entry inadvisable even against an otherwise attractive growth backdrop. Warnings | Quality metrics would need to improve above the minimum threshold and upside to the price target would need to recover above 10% before the entry setup becomes investable. | →Stable |
| CounterThe technical setup is a breakout configuration with a golden cross, above all major moving averages and RSI at 68 — the momentum profile is among the strongest in the investable universe and can carry a name past a thin near-term target. | ||
Government agencies represent 70% of customer revenue, classified as a high-concentration risk — a level of dependency that leaves the business acutely sensitive to shifts in public infrastructure spending, budget cycles, or contract award timing.
→StableBear case
- Expectation
- Government-sector revenue should remain stable or grow, with no single awarded contract accounting for more than 30% of total revenue, as evidence that the concentration is diversified across multiple agency relationships.
CounterGovernment contracts often come with long-dated, predictable payment schedules and low counterparty default risk — the concentration may provide revenue visibility that a more fragmented private-sector customer base would not.
Revenue grew 30% year over year while the company beat earnings estimates in each of the last four quarters with an average positive surprise of nearly 40%, including a standout most-recent quarter where actual results exceeded estimates by 136% — a combination of top-line momentum and delivery well above expectations.
→StableGrowth breakdown
- Expectation
- Revenue growth should sustain above 15% year over year and earnings surprises should remain positive for at least two more consecutive quarters, confirming that the growth profile is durable rather than one-quarter-driven.
CounterThe earnings quality note flags that free cash flow runs at only 70% of net income, meaning a portion of reported earnings is not converting into cash — if this gap widens, the headline growth may overstate the real economic improvement.
Four consecutive earnings beats with an average positive surprise of 39.79% demonstrate a pattern of consistently under-promising and over-delivering, including a most-recent quarter where the company turned an expected loss into a small gain.
→StableCatalyst breakdown
- Expectation
- The beat streak should extend for at least two more quarters with surprises above 5%, maintaining the pattern of reliable outperformance against consensus estimates.
CounterA beat that converts an expected loss to a small gain, as seen in the most recent quarter, may reflect a one-time item rather than operational strength — if the underlying business reverts to consensus-tracking behavior, the streak loses its signal value.
Business quality scores below the minimum investable floor, and the current price sits just 2.9% below the take-profit target — leaving a reward-to-risk ratio of 0.27, far below the minimum bar of 1.5 — making a new entry inadvisable even against an otherwise attractive growth backdrop.
→StableWarnings
- Expectation
- Quality metrics would need to improve above the minimum threshold and upside to the price target would need to recover above 10% before the entry setup becomes investable.
CounterThe technical setup is a breakout configuration with a golden cross, above all major moving averages and RSI at 68 — the momentum profile is among the strongest in the investable universe and can carry a name past a thin near-term target.
Per-dimension breakdown
Quality
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 6.7 |
| ROA | 3.5 |
| Gross margin | 0.0 |
| Op margin | 0.0 |
| Net margin | 2.0 |
| Current ratio | 4.3 |
| FCF quality | 5.3 |
| Moat | 6.0 |
| Piotroski F | 6.7 |
- ▸Earnings quality warning: 69% FCF/NI
Growth
10.0/10data confidence 33%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
- ▸Strong growth: 30% YoY
Momentum
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 4.4 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Overbought (RSI 73)
- ▸Volume accumulation (rising OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 8.0 |
| Analyst rating | 5.0 |
| Price target | 6.0 |
- ▸LLM news sentiment: +0.60 (n=1)
Insider
3.8/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| insider conviction | 3.2 |
| holder change | 5.1 |
- ▸Notable insider selling — $7,589,825 (0.114% of mkt cap)
Peer rank
4.3/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 5.6 |
| quality rank | 4.7 |
| growth rank | 7.0 |
Technical
3.8/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.0 |
| support resistance | 0.2 |
| 52w position | 9.9 |
| gap | 5.0 |
Risk (lower is worse)
5.2/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 1.8 |
| days to cover | 4.9 |
| volatility | 4.4 |
| put call | 10.0 |
| implied vol | 7.6 |
| max pain risk | 3.0 |
| beta | 5.7 |
| debt equity | 4.4 |
- ▸High short interest justified: 17%
- ▸Above max pain $85
- ▸Concentration risks: 1 HIGH (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.0/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 6.5 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| dividend safety | 5.2 |
| news activity | 5.0 |
- ▸Perfect beat streak: 4Q
- ▸Dividend: 34.0%
How the verdict was assembled
Engine trigger
Quality below minimum threshold.
Engine technical detail
verdict_path:
L1:HARD_BLOCKPassed (7)
- MOMENTUM:6.7>=5.5
- INSIDER:OK
- 8K:CLEAN
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:41d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.5=NEGATIVE
Warning (0)
none
Reward-to-Risk
-0.49
Upside
-7.4%
Downside
14.9%
Sizing output
AVOID
SetupUNKNOWN — No clear chart pattern; technical signals are mixed
EdgeNO_EDGE — No clear edge identified
SuitabilityAGGRESSIVE — Beta 1.33>1.3
Investment implication
The L1 gate blocked the positive-verdict path: a hard-floor threshold was breached, so dimensional pillars — including Growth at 10.0 could not lift the engine output above the verdict floor. Failed gate signal: ASYMMETRY:-0.5=NEGATIVE.
The strongest dimensions are Growth at 10.0, Catalyst at 7.0, and Momentum at 6.7; the weakest are Technical at 3.8, Insider at 3.8, and Quality at 3.8. The V9 engine flagged 1 failed gate, producing an asymmetric reward-to-risk of -0.49 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Revenue grew 30% year over year while the company beat earnings estimates in each of the last four quarters with an average positive surprise of nearly 40%, including a standout most-recent quarter where actual results exceeded estimates by 136% — a combination of top-line momentum and delivery well above expectations.
Trip ifRevenue growth falls below 15% year over year for 2 consecutive quarters.
- P2Four consecutive earnings beats with an average positive surprise of 39.79% demonstrate a pattern of consistently under-promising and over-delivering, including a most-recent quarter where the company turned an expected loss into a small gain.
Trip ifEarnings surprise falls below 0% for 2 consecutive quarters.
- P3Government agencies represent 70% of customer revenue, classified as a high-concentration risk — a level of dependency that leaves the business acutely sensitive to shifts in public infrastructure spending, budget cycles, or contract award timing.
Trip ifGovernment-sector customer revenue falls below 50% of total revenue, indicating meaningful diversification of the concentration risk.
- P4Business quality scores below the minimum investable floor, and the current price sits just 2.9% below the take-profit target — leaving a reward-to-risk ratio of 0.27, far below the minimum bar of 1.5 — making a new entry inadvisable even against an otherwise attractive growth backdrop.
Trip ifUpside to the take-profit target recovers above 10% from the current 2.9% level.