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.
Will Strong Cash Flow Support STRL's Next Growth Phase?
Read MoreHide Full Article
Key Takeaways
STRL posted $85M in quarterly operating cash flow and $170.3M in six-month cash generation.
A $699M cash balance and $298M debt give STRL over $400M net cash to fund growth initiatives.
The $450M CEC deal expands STRL's electrical and mechanical offerings for mission-critical projects.
Sterling Infrastructure, Inc. (STRL - Free Report) posted strong results in second-quarter 2025, highlighting not just top-line expansion but also robust cash flow generation. The company reported operating cash flow of $85 million for the quarter and $170.3 million for the first six months of 2025, nearly matching last year’s pace despite higher capital expenditures and acquisition-related outflows.
This consistent cash generation is critical as STRL positions itself for the next phase of growth. With $699 million in cash and only $298 million of debt at quarter-end, Sterling boasts a net cash position of more than $400 million. Such financial strength provides flexibility to fund both organic initiatives, like expanding E-Infrastructure capabilities, and inorganic moves, including the pending $450 million acquisition of CEC Facilities Group. Management noted that CEC will add electrical and mechanical services, broadening Sterling’s end-to-end offerings in mission-critical projects.
At the same time, the company continues to return capital to its shareholders. Earlier in 2025, Sterling repurchased $43.8 million in shares, signaling confidence in its valuation and future earnings trajectory. Importantly, management extended and expanded its credit facility to 2028, further bolstering liquidity.
Looking ahead, cash flow discipline will be key to sustaining growth. Demand in E-Infrastructure, particularly from data centers and e-commerce facilities, is expected to remain strong. With rising backlog and improved margins, Sterling appears well-positioned. However, execution on acquisitions and navigating cyclical headwinds in the Building Solutions segment will test how effectively STRL can deploy its cash to maximize long-term shareholder value.
Competitors Balancing Growth and Cash Discipline
Two notable peers in the infrastructure and specialty contracting space, Jacobs Solutions (J - Free Report) and Quanta Services (PWR - Free Report) , offer useful comparisons to Sterling Infrastructure’s cash flow-driven strategy.
Jacobs, a global engineering and consulting leader, has leveraged its strong cash position to expand in high-growth areas, including critical infrastructure, water solutions and digital engineering. Its ability to deploy cash into strategic acquisitions while maintaining a healthy balance sheet mirrors Sterling’s approach as it looks to scale the E-Infrastructure footprint.
Meanwhile, Quanta Services, a dominant player in utility and renewable infrastructure, has demonstrated how disciplined capital allocation can support large-scale, complex projects. Like Sterling, Quanta invests heavily in expanding capabilities to capture long-cycle opportunities in power and data-driven markets.
Both peers highlight the importance of sustainable cash generation to fuel innovation, acquisitions and margin expansion, factors that Sterling must continue to leverage to stay competitive.
STRL’s Price Performance, Valuation and Estimates
Shares of this Texas-based infrastructure services provider have surged 49.4% in the past three months, outperforming the Zacks Engineering - R and D Services industry’s decline of 2.5%.
Price Performance
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 34.46, as shown in the chart below.
P/E (F12M)
Image Source: Zacks Investment Research
For 2025 and 2026, STRL’s earnings estimates have trended upward in the past 30 days to $9.57 and $10.98 per share, respectively. The revised estimated figures indicate 56.9% and 14.7% year-over-year growth, respectively.
Image: Bigstock
Will Strong Cash Flow Support STRL's Next Growth Phase?
Key Takeaways
Sterling Infrastructure, Inc. (STRL - Free Report) posted strong results in second-quarter 2025, highlighting not just top-line expansion but also robust cash flow generation. The company reported operating cash flow of $85 million for the quarter and $170.3 million for the first six months of 2025, nearly matching last year’s pace despite higher capital expenditures and acquisition-related outflows.
This consistent cash generation is critical as STRL positions itself for the next phase of growth. With $699 million in cash and only $298 million of debt at quarter-end, Sterling boasts a net cash position of more than $400 million. Such financial strength provides flexibility to fund both organic initiatives, like expanding E-Infrastructure capabilities, and inorganic moves, including the pending $450 million acquisition of CEC Facilities Group. Management noted that CEC will add electrical and mechanical services, broadening Sterling’s end-to-end offerings in mission-critical projects.
At the same time, the company continues to return capital to its shareholders. Earlier in 2025, Sterling repurchased $43.8 million in shares, signaling confidence in its valuation and future earnings trajectory. Importantly, management extended and expanded its credit facility to 2028, further bolstering liquidity.
Looking ahead, cash flow discipline will be key to sustaining growth. Demand in E-Infrastructure, particularly from data centers and e-commerce facilities, is expected to remain strong. With rising backlog and improved margins, Sterling appears well-positioned. However, execution on acquisitions and navigating cyclical headwinds in the Building Solutions segment will test how effectively STRL can deploy its cash to maximize long-term shareholder value.
Competitors Balancing Growth and Cash Discipline
Two notable peers in the infrastructure and specialty contracting space, Jacobs Solutions (J - Free Report) and Quanta Services (PWR - Free Report) , offer useful comparisons to Sterling Infrastructure’s cash flow-driven strategy.
Jacobs, a global engineering and consulting leader, has leveraged its strong cash position to expand in high-growth areas, including critical infrastructure, water solutions and digital engineering. Its ability to deploy cash into strategic acquisitions while maintaining a healthy balance sheet mirrors Sterling’s approach as it looks to scale the E-Infrastructure footprint.
Meanwhile, Quanta Services, a dominant player in utility and renewable infrastructure, has demonstrated how disciplined capital allocation can support large-scale, complex projects. Like Sterling, Quanta invests heavily in expanding capabilities to capture long-cycle opportunities in power and data-driven markets.
Both peers highlight the importance of sustainable cash generation to fuel innovation, acquisitions and margin expansion, factors that Sterling must continue to leverage to stay competitive.
STRL’s Price Performance, Valuation and Estimates
Shares of this Texas-based infrastructure services provider have surged 49.4% in the past three months, outperforming the Zacks Engineering - R and D Services industry’s decline of 2.5%.
Price Performance
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 34.46, as shown in the chart below.
P/E (F12M)
Image Source: Zacks Investment Research
For 2025 and 2026, STRL’s earnings estimates have trended upward in the past 30 days to $9.57 and $10.98 per share, respectively. The revised estimated figures indicate 56.9% and 14.7% year-over-year growth, respectively.
Image Source: Zacks Investment Research
The company currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.