Have you been paying attention to shares of Sterling Infrastructure (STRL - Free Report) ? Shares have been on the move with the stock up 46.3% over the past month. The stock hit a new 52-week high of $116.36 in the previous session. Sterling Infrastructure has gained 26.6% since the start of the year compared to the 10.6% move for the Zacks Construction sector and the 10.4% return for the Zacks Engineering - R and D Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 26, 2024, Sterling Infrastructure reported EPS of $1.3 versus consensus estimate of $1 while it missed the consensus revenue estimate by 7.77%.
For the current fiscal year, Sterling Infrastructure is expected to post earnings of $4.98 per share on $2.2 billion in revenues. This represents a 11.41% change in EPS on a 11.68% change in revenues. For the next fiscal year, the company is expected to earn $5.64 per share on $2.47 billion in revenues. This represents a year-over-year change of 13.15% and 12.3%, respectively.
Valuation Metrics
Sterling Infrastructure may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Sterling Infrastructure has a Value Score of C. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.6X. On a trailing cash flow basis, the stock currently trades at 17.3X versus its peer group's average of 15.3X. Additionally, the stock has a PEG ratio of 1.12. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Sterling Infrastructure currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sterling Infrastructure fits the bill. Thus, it seems as though Sterling Infrastructure shares could have a bit more room to run in the near term.
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Have you been paying attention to shares of Sterling Infrastructure (STRL - Free Report) ? Shares have been on the move with the stock up 46.3% over the past month. The stock hit a new 52-week high of $116.36 in the previous session. Sterling Infrastructure has gained 26.6% since the start of the year compared to the 10.6% move for the Zacks Construction sector and the 10.4% return for the Zacks Engineering - R and D Services industry.
What's Driving the Outperformance?
The stock has a great record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on February 26, 2024, Sterling Infrastructure reported EPS of $1.3 versus consensus estimate of $1 while it missed the consensus revenue estimate by 7.77%.
For the current fiscal year, Sterling Infrastructure is expected to post earnings of $4.98 per share on $2.2 billion in revenues. This represents a 11.41% change in EPS on a 11.68% change in revenues. For the next fiscal year, the company is expected to earn $5.64 per share on $2.47 billion in revenues. This represents a year-over-year change of 13.15% and 12.3%, respectively.
Valuation Metrics
Sterling Infrastructure may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Sterling Infrastructure has a Value Score of C. The stock's Growth and Momentum Scores are A and F, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 22.4X current fiscal year EPS estimates, which is a premium to the peer industry average of 18.6X. On a trailing cash flow basis, the stock currently trades at 17.3X versus its peer group's average of 15.3X. Additionally, the stock has a PEG ratio of 1.12. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to consider the stock's Zacks Rank, as this supersedes any trend on the style score front. Fortunately, Sterling Infrastructure currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Sterling Infrastructure fits the bill. Thus, it seems as though Sterling Infrastructure shares could have a bit more room to run in the near term.
Just Released: Zacks Top 10 Stocks for 2024
Hurry – you can still get in early on our 10 top tickers for 2024. Hand-picked by Zacks Director of Research, Sheraz Mian, this portfolio has been stunningly and consistently successful. From inception in 2012 through November, 2023, the Zacks Top 10 Stocks gained +974.1%, nearly TRIPLING the S&P 500’s +340.1%. Sheraz has combed through 4,400 companies covered by the Zacks Rank and handpicked the best 10 to buy and hold in 2024. You can still be among the first to see these just-released stocks with enormous potential.
See New Top 10 Stocks >>
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