Value
4.6/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 1.9 |
| P/S | 5.2 |
| EV/EBITDA | 0.0 |
| Fwd P/E | 4.8 |
| PEG | 6.2 |
| Analyst target | 7.5 |
- ▸Forward P/E: 25.9x
- ▸PEG: 1.20
STRL · Why this verdict
Why Sterling Infrastructure (STRL) is rated BUY WAIT
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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VerdictBUY WAIT
Overall score6.0/10
ConfidenceMEDIUM
MacroNEUTRAL
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The company has been assigned a wide economic moat with an excellent ROE of 37%, a strong Piotroski F-Score of 7 out of 9, and best-in-class margins within its industry, suggesting durable competitive advantages in engineering and construction. Quality breakdown | ROE remains above 30% and gross margins remain at or above current levels over the next 12 months, supporting the moat assessment. | →Stable |
| CounterEngineering and construction businesses face cyclical revenue tied to infrastructure spending; a slowdown in state Department of Transportation budgets could compress margins and ROE rapidly. | ||
The top four state Departments of Transportation account for 58% of revenues in the Transportation Solutions segment, creating a material dependency on public-sector budget cycles that can shift with political and fiscal conditions. Bear case | Customer concentration in the top 4 state clients falls below 50% as the company diversifies its project pipeline over the next 12 months. | →Stable |
| CounterGovernment infrastructure contracts are typically multi-year and not easily cancelled, providing revenue visibility that partially offsets the headline concentration risk. | ||
Sterling has beaten earnings estimates in all 4 of the last 4 quarters, with the most recent quarter delivering a 63.9% upside surprise of $3.59 versus the $2.19 estimate, demonstrating consistent ability to outperform expectations. Earnings | The company beats earnings estimates in at least 3 of the next 4 quarters, maintaining a beat streak and average surprise above 10%. | →Stable |
| CounterA 4-quarter perfect beat streak often reflects conservative guidance rather than operational outperformance; analysts may adjust upward, making future beats harder to achieve. | ||
With 92% year-over-year earnings growth priced into a forward P/E of 37.4x and the current price 5.5% above the analyst consensus target, the stock appears to have already captured near-term fundamental improvement. Valuation breakdown | Analyst consensus price target rises above $920, more than 6% above the current $866.67, as earnings growth sustains the premium multiple. | →Stable |
| CounterHigh-quality compounders with consistent earnings beats historically trade at elevated multiples for extended periods; the forward P/E may understate earnings power if growth continues at the current pace. | ||
The company has been assigned a wide economic moat with an excellent ROE of 37%, a strong Piotroski F-Score of 7 out of 9, and best-in-class margins within its industry, suggesting durable competitive advantages in engineering and construction.
→StableQuality breakdown
- Expectation
- ROE remains above 30% and gross margins remain at or above current levels over the next 12 months, supporting the moat assessment.
CounterEngineering and construction businesses face cyclical revenue tied to infrastructure spending; a slowdown in state Department of Transportation budgets could compress margins and ROE rapidly.
The top four state Departments of Transportation account for 58% of revenues in the Transportation Solutions segment, creating a material dependency on public-sector budget cycles that can shift with political and fiscal conditions.
→StableBear case
- Expectation
- Customer concentration in the top 4 state clients falls below 50% as the company diversifies its project pipeline over the next 12 months.
CounterGovernment infrastructure contracts are typically multi-year and not easily cancelled, providing revenue visibility that partially offsets the headline concentration risk.
Sterling has beaten earnings estimates in all 4 of the last 4 quarters, with the most recent quarter delivering a 63.9% upside surprise of $3.59 versus the $2.19 estimate, demonstrating consistent ability to outperform expectations.
→StableEarnings
- Expectation
- The company beats earnings estimates in at least 3 of the next 4 quarters, maintaining a beat streak and average surprise above 10%.
CounterA 4-quarter perfect beat streak often reflects conservative guidance rather than operational outperformance; analysts may adjust upward, making future beats harder to achieve.
With 92% year-over-year earnings growth priced into a forward P/E of 37.4x and the current price 5.5% above the analyst consensus target, the stock appears to have already captured near-term fundamental improvement.
→StableValuation breakdown
- Expectation
- Analyst consensus price target rises above $920, more than 6% above the current $866.67, as earnings growth sustains the premium multiple.
CounterHigh-quality compounders with consistent earnings beats historically trade at elevated multiples for extended periods; the forward P/E may understate earnings power if growth continues at the current pace.
TrendMatrix Research · core thesis
Engine thesis — one sentence
Sterling Infrastructure has delivered 4 consecutive earnings beats with an average surprise of 28.7% and 92% year-over-year earnings growth, supported by a wide economic moat and best-in-class industry margins, though the stock now trades above analyst targets with limited near-term price upside.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Per-dimension breakdown
Quality
6.5/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 10.0 |
| ROA | 8.6 |
| Gross margin | 0.7 |
| Op margin | 6.9 |
| Net margin | 6.0 |
| Current ratio | 4.3 |
| FCF quality | 7.0 |
| Moat | 7.5 |
| Piotroski F | 7.8 |
- ▸Excellent ROE: 37%
- ▸Wide economic moat
- ▸Compounder quality: strong returns + growth
- ▸Strong Piotroski F-Score: 7/9
Growth
10.0/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 10.0 |
| EPS growth | 10.0 |
- ▸Strong growth: 92% YoY
Momentum
3.3/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 7.9 |
| MACD | 0.0 |
| OBV | 1.0 |
| MA position | 4.0 |
| Volume | 3.8 |
- ▸Uptrend pullback (RSI 36) - buy opportunity
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| LLM sentiment | 5.8 |
| Analyst rating | 5.0 |
| Price target | 8.9 |
- ▸Analyst upside: 34%
Insider
4.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 3.0 |
| holder change | 5.1 |
- ▸Notable insider selling — $24,878,635 (0.116% of mkt cap)
Peer rank
4.5/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 0.8 |
| quality rank | 8.3 |
| growth rank | 9.1 |
- ▸Superior ROE vs peers
- ▸Best-in-class margins
Technical
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 10.0 |
| support resistance | 9.7 |
| 52w position | 3.9 |
| gap | 5.0 |
Risk (lower is worse)
4.3/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 6.8 |
| days to cover | 8.3 |
| volatility | 0.0 |
| put call | 2.4 |
| implied vol | 0.0 |
| beta | 3.9 |
| debt equity | 8.9 |
- ▸Elevated put/call: 1.65
- ▸High IV: 99%
- ▸Concentration risks: 1 HIGH, 3 MED (10-K Item 1A — sized via position_sizing, validated via buy_confidence)
Catalyst
7.6/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 10.0 |
| news activity | 8.0 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more. | News modifier +2 (HOLD_IF_HOLDING → STRONG_BUY_WAIT).
Engine technical detail
verdict_path:
L4:PATH_F_HOLD|L3:NEWS_MOD=+2|ENTRY_STICKY:WITHIN_BANDPassed (5)
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:30d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (2)
- MOMENTUM:3.3<4.5
- ASYMMETRY:1.1<1.5@spot
Warning (1)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
1.12
Upside
+16.8%
Downside
15.0%
Sizing output
STARTER
Setup— — No clear chart pattern; technical signals are mixed
EdgeNo clear edge — No clear edge identified
SuitabilityAggressive — Beta 1.83>1.3
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: INSIDER:OK. Top dim: Growth at 10.0; weakest: Momentum at 3.3. No conviction either direction.
The strongest dimensions are Growth at 10.0, Catalyst at 7.6, and Technical at 7.1; the weakest are Momentum at 3.3, Insider at 4.0, and Risk (lower is worse) at 4.3. The V9 engine flagged 2 failed gates with 1 warning, producing an asymmetric reward-to-risk of 1.12 and an engine sizing output of STARTER.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Streak
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, breaking the current 4-quarter beat streak.
- P2Wide Economic Moat Quality
Trip ifROE falls below 25%, declining more than 12 percentage points from the current 37% level.
- P3Customer Concentration State Dots
Trip ifRevenue from the top 4 state clients rises above 65%, exceeding the current 58% concentration and increasing dependency further.
- P4Valuation Above Analyst Target
Trip ifPrice drops below $750, more than 13% below the current $866.67, indicating the market is re-rating the multiple lower.