We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Dycom Jumps 39% in 3 Months: Should You Buy, Sell or Hold the Stock?
Read MoreHide Full Article
Shares of Dycom Industries, Inc. (DY - Free Report) have demonstrated strong performance over the past three months, outpacing the Zacks Building Products - Heavy Construction industry. The stock has risen 38.9%, significantly surpassing the industry's 11.5% growth. The DY stock has also outperformed the broader Construction sector's rise of 1.6% and the S&P 500 index’s 1.1% fall during the same period.
This North America-based telecom infrastructure services provider recently reported first-quarter fiscal 2026 results, with adjusted earnings and Contract revenues surpassing the Zacks Consensus Estimate. The company’s top line increased 10.2% year over year, supported by strong contributions from AT&T and all other customers. Owing to strong momentum and the favorable demand outlook, the company raised its 2026 guidance. (read more: Q1 Earnings & Revenues Beat, Backlog Up Y/Y, FY26 View Raised).
DY Stock’s Past 3 Months’ Price Performance
Image Source: Zacks Investment Research
The DY stock has outperformed some other players in the past three months, including MasTec, Inc. (MTZ - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Fluor Corporation (FLR - Free Report) . In the said time frame, MasTec, EMCOR and Fluor have gained 20.2% and 15.1%, and 9.9%, respectively.
Technical indicators suggest continued strong performance for Dycom. From the graphical representation given below, it can be observed that DY stock is trading above both 50 and 200-day simple moving averages, signaling a bullish trend. The technical strength underscores positive market sentiment and confidence in its financial health and prospects.
DY Stock Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Let us take a closer look at the factors driving Dycom’s recent growth and what this may signal for the stock going forward.
The company continues to see growth in fiber-to-the-home projects and maintenance contracts. In the fiscal first quarter, Dycom benefited from customers increasing or reconfirming fiber deployment targets. Higher fiber passing volumes supported revenue growth. Ongoing project acceleration is expected to drive further momentum.
At the end of the fiscal first quarter, the backlog was $8.127 billion, up from $7.760 billion at the fiscal 2025-end and $6.364 billion as of the first quarter of fiscal 2025. Of the current backlog position, $4.685 billion is projected to be completed in the next 12 months.
Expanding Digital Infrastructure Services With Hyperscalers
The company is broadening its work with hyperscalers by connecting fiber networks and data centers. This expansion opens new markets and adds to the range of digital infrastructure services offered. The company is also pursuing opportunities to work directly with hyperscalers.
Hyperscalers have also reaffirmed commitments to AI-related data centers and digital infrastructure, with increasing capital expenditure for the calendar year 2025. The company views long-haul and middle-mile networks as a significant market opportunity over the long term. Dycom recently secured a multi-year contract from an ISP for middle-mile network work, marking progress in this developing area.
Strengthening Core Service & Maintenance Business
Dycom’s service and maintenance segment provides a steady source of recurring revenues. The service and maintenance business has grown steadily alongside its revenues in recent years. This growth is reflected in the fiscal first quarter’s results and the updated outlook for fiscal 2026. The company continues to focus on this segment and secured significant new contracts during the quarter.
The company aims to grow its service and maintenance segment while also expanding into fiber deployments, long-haul networks, hyperscaler projects and wireless equipment upgrades. This approach supports the company’s overall growth plans.
DY Stock Trades at a Premium
From a valuation standpoint, the company is currently trading at a premium relative to its industry and historical metrics, with the forward 12-month price-to-earnings (P/E) ratio sitting above the five-year average.
Image Source: Zacks Investment Research
Furthermore, DY also trades higher than some of its industry peers, such as MasTec, EMCOR and Fluor, which trade at 23.28X, 19X and 15.67X, respectively.
The company’s premium valuation comes amid rising concerns over cost pressures that could affect profitability.
Tariff Concerns Add Uncertainty to Project Costs
Despite Dycom’s positive outlook, ongoing tariffs and trade tensions continue to create risks for equipment costs and project margins. The company expects some increases in costs for equipment components sourced offshore. While the impact on current build plans is expected to be limited, these factors add uncertainty to expenses. Dycom is closely monitoring the situation and engaging with customers and suppliers to manage potential challenges.
Conclusion
Dycom continues to gain from ongoing fiber-to-the-home programs, steady maintenance and operations activity, along with growing involvement in hyperscaler-related fiber infrastructure work. Despite ongoing tariff-related and macroeconomic challenges, fiber-to-the-home and hyperscaler initiatives continue to support long-term growth visibility.
Existing stakeholders are advised to hold their positions in this Zacks Rank #3 (Hold) stock, while prospective investors should monitor how the company manages these challenges before investing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Dycom Jumps 39% in 3 Months: Should You Buy, Sell or Hold the Stock?
Shares of Dycom Industries, Inc. (DY - Free Report) have demonstrated strong performance over the past three months, outpacing the Zacks Building Products - Heavy Construction industry. The stock has risen 38.9%, significantly surpassing the industry's 11.5% growth. The DY stock has also outperformed the broader Construction sector's rise of 1.6% and the S&P 500 index’s 1.1% fall during the same period.
This North America-based telecom infrastructure services provider recently reported first-quarter fiscal 2026 results, with adjusted earnings and Contract revenues surpassing the Zacks Consensus Estimate. The company’s top line increased 10.2% year over year, supported by strong contributions from AT&T and all other customers. Owing to strong momentum and the favorable demand outlook, the company raised its 2026 guidance. (read more: Q1 Earnings & Revenues Beat, Backlog Up Y/Y, FY26 View Raised).
DY Stock’s Past 3 Months’ Price Performance
Image Source: Zacks Investment Research
The DY stock has outperformed some other players in the past three months, including MasTec, Inc. (MTZ - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Fluor Corporation (FLR - Free Report) . In the said time frame, MasTec, EMCOR and Fluor have gained 20.2% and 15.1%, and 9.9%, respectively.
Technical indicators suggest continued strong performance for Dycom. From the graphical representation given below, it can be observed that DY stock is trading above both 50 and 200-day simple moving averages, signaling a bullish trend. The technical strength underscores positive market sentiment and confidence in its financial health and prospects.
DY Stock Trades Above 50 & 200-Day Moving Averages
Image Source: Zacks Investment Research
Let us take a closer look at the factors driving Dycom’s recent growth and what this may signal for the stock going forward.
Fiber Projects & Contract Growth Drive Backlog Expansion
The company continues to see growth in fiber-to-the-home projects and maintenance contracts. In the fiscal first quarter, Dycom benefited from customers increasing or reconfirming fiber deployment targets. Higher fiber passing volumes supported revenue growth. Ongoing project acceleration is expected to drive further momentum.
At the end of the fiscal first quarter, the backlog was $8.127 billion, up from $7.760 billion at the fiscal 2025-end and $6.364 billion as of the first quarter of fiscal 2025. Of the current backlog position, $4.685 billion is projected to be completed in the next 12 months.
Expanding Digital Infrastructure Services With Hyperscalers
The company is broadening its work with hyperscalers by connecting fiber networks and data centers. This expansion opens new markets and adds to the range of digital infrastructure services offered. The company is also pursuing opportunities to work directly with hyperscalers.
Hyperscalers have also reaffirmed commitments to AI-related data centers and digital infrastructure, with increasing capital expenditure for the calendar year 2025. The company views long-haul and middle-mile networks as a significant market opportunity over the long term. Dycom recently secured a multi-year contract from an ISP for middle-mile network work, marking progress in this developing area.
Strengthening Core Service & Maintenance Business
Dycom’s service and maintenance segment provides a steady source of recurring revenues. The service and maintenance business has grown steadily alongside its revenues in recent years. This growth is reflected in the fiscal first quarter’s results and the updated outlook for fiscal 2026. The company continues to focus on this segment and secured significant new contracts during the quarter.
The company aims to grow its service and maintenance segment while also expanding into fiber deployments, long-haul networks, hyperscaler projects and wireless equipment upgrades. This approach supports the company’s overall growth plans.
DY Stock Trades at a Premium
From a valuation standpoint, the company is currently trading at a premium relative to its industry and historical metrics, with the forward 12-month price-to-earnings (P/E) ratio sitting above the five-year average.
Image Source: Zacks Investment Research
Furthermore, DY also trades higher than some of its industry peers, such as MasTec, EMCOR and Fluor, which trade at 23.28X, 19X and 15.67X, respectively.
The company’s premium valuation comes amid rising concerns over cost pressures that could affect profitability.
Tariff Concerns Add Uncertainty to Project Costs
Despite Dycom’s positive outlook, ongoing tariffs and trade tensions continue to create risks for equipment costs and project margins. The company expects some increases in costs for equipment components sourced offshore. While the impact on current build plans is expected to be limited, these factors add uncertainty to expenses. Dycom is closely monitoring the situation and engaging with customers and suppliers to manage potential challenges.
Conclusion
Dycom continues to gain from ongoing fiber-to-the-home programs, steady maintenance and operations activity, along with growing involvement in hyperscaler-related fiber infrastructure work. Despite ongoing tariff-related and macroeconomic challenges, fiber-to-the-home and hyperscaler initiatives continue to support long-term growth visibility.
Existing stakeholders are advised to hold their positions in this Zacks Rank #3 (Hold) stock, while prospective investors should monitor how the company manages these challenges before investing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.