Why Sterling Infrastructure Shares Are Soaring Today
Sterling Infrastructure (NASDAQ: STRL) easily topped Wall Street estimates for the quarter and raised full-year guidance. Investors are buying in, sending shares of Sterling up 15% as of 10:45 Eastern.
Growth across the business
Sterling is a construction company focused on high-growth markets, including warehouses, data centers, and large infrastructure projects. The company earned $1 per share in the first quarter on revenue of $440.4 million, topping the $0.77 per share in earnings on sales of $412 million consensus estimate.
Revenue was up 9% year over year, and Sterling's gross margin improved by 220 basis points to 17.5% in the quarter. CEO Joe Cutillo said the results came despite difficult weather in January and February that delayed work on some key projects.
"Had the weather cooperated, the quarter would have been even better," Cutillo said. "We believe 2024 will be another excellent year for Sterling."
The company is forecasting earnings of $5 to $5.30 per share for all of 2024 on revenue of between $2.125 billion and $2.215 billion. Both ranges offer upside to the $4.99 per share in earnings on revenue of $2.15 billion that Wall Street had expected.
Is Sterling Infrastructure a buy after its strong report?
The company ended the quarter with a backlog of more than $2.35 billion in future business. Sterling is demonstrating its ability to turn that backlog into profitable revenue and should have many more opportunities up ahead.
Sterling has exposure to some important megatrends, from building data centers to handle an increase in artificial intelligence (AI) to warehouses to handle in-shoring and the continued growth of e-commerce. The need for infrastructure renewal is also well known, though up to the spending whims of government officials.
This stock is a good choice for those who would like to buy into those trends without having to purchase a number of different companies.
Should you invest $1,000 in Sterling Infrastructure right now?
Before you buy stock in Sterling Infrastructure, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Sterling Infrastructure wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $564,547!*
Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month. The Stock Advisor service has more than quadrupled the return of S&P 500 since 2002*.
*Stock Advisor returns as of May 6, 2024
Lou Whiteman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
