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This Texas-based dredging services provider is benefiting from solid backlog growth driven by large-scale projects across several areas in which it operates, alongside its disciplined bidding approach. Moreover, the company’s efficient project execution efforts are additionally catalyzing prospects, especially margin expansion. With these favorable aspects, accompanied by the new build program and liquidity position, GLDD is well-positioned to scale in the long term and ensure shareholder value, despite a challenging macroenvironment.
Image Source: Zacks Investment Research
Additionally, the recent three consecutive months of Fed rate cuts, from September to October 2025, are encouraging for public construction prospects in the United States. On Dec. 10, 2025, the Federal Reserve slashed its interest rates by another 0.25 percentage points, setting the benchmark between 3.5% and 3.75%. The reduction in borrowing rate catalyzes the ongoing favorable market trends, boosting more project initiations, leading to a promising future.
Let us decode the factors that are driving Great Lakes Dredge & Dock’s growth momentum.
Increased Project Opportunities
Great Lakes Dredge & Dock’s operations mainly focus on complex port deepening, LNG-related dredging and coastal resilience projects. The ongoing strength in the public infrastructure spending across the US is supporting these activities. Besides core dredging projects, the demand for maintenance dredging projects also saw growth in the first nine months of 2025, with the Maintenance backlog growing year over year by 53.9% to $147.6 million.
The company emphasized that prior-year bid discipline resulted in a backlog capable of sustaining high fleet utilization, allowing it to be selective in new bidding rather than pursuing volume for its own sake. This disciplined approach reduces execution risk and improves margin stability. The mix between federally funded and privately funded projects has improved diversification, lowering dependence on any single funding source and insulating operations from political or budgetary disruptions.
Fleet Modernization Strategy
Great Lakes Dredge & Dock has been investing in its multi-year fleet modernization strategy through the new build program since 2020. In the third quarter of 2025, the company welcomed its sixth hopper dredge, Amelia Island, reaching a significant milestone in its dredging new build program. With this delivery, GLDD now operates one of the most technologically advanced hopper dredge fleet in the United States, optimized for shallow and narrow coastal environments where demand for beach nourishment and resilience projects continues to grow.
Equally significant is the ongoing construction of the Acadia, the first US-flagged, Jones Act–compliant subsea rock installation vessel. Scheduled for delivery in the first quarter of 2026, the Acadia expands GLDD’s addressable market beyond traditional dredging into offshore energy and subsea infrastructure protection. During the third quarter of 2025 earnings call, the company confirmed that the vessel is fully booked for 2026, supporting offshore wind projects such as Empire Wind and Sunrise Wind, with additional opportunities being pursued internationally. As heavy construction spending tapers, the company expects materially higher free cash flow generation beginning in 2026, allowing it to transition from an investment phase to a harvest phase.
Improving Margins
GLDD’s effective approach across high fleet utilization, disciplined cost control and a favorable project mix skewed toward capital and coastal protection work is proving incremental for its margin growth. Large-scale projects generally involve more technical complexity and longer durations, allowing the company to absorb fixed costs and deploy its modernized fleet efficiently. Management repeatedly emphasized strong project execution as a core differentiator, noting that operational performance exceeded expectations even in periods of elevated maintenance activity.
During the first nine months of 2025, adjusted EBITDA margin expanded 310 basis points (bps) year over year to 20.2%. The increased gross profit position and top-line leverage aided this uptrend. During the same time frame, gross margin also expanded year over year by 380 bps to 23.7%. As newer vessels enter service and dry-docking intensity normalizes by 2026, Great Lakes Dredge & Dock expects margins to remain structurally strong rather than cyclical. This suggests that recent profitability improvements are not transitory but reflect a step-change in the earnings profile driven by fleet modernization and improved bidding discipline.
GLDD Trades at a Discount
GLDD stock is currently trading at a discount relative to its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 12.18, as shown in the chart below.
Image Source: Zacks Investment Research
Earnings Estimate Revision of GLDD
GLDD’s earnings estimates for 2025 have inched down in the past seven days to $1.09, while the same for 2026 have moved up in the past 60 days.
Image Source: Zacks Investment Research
The estimated figure for 2025 reflects 29.8% year-over-year growth, with the same for 2026 indicating a 0.2% inch-down.
Great Lakes Dredge & Dock Competitive Position
Great Lakes Dredge & Dock occupies a specialized competitive position, driven by strong demand for coastal resilience, port deepening, LNG-related dredging and growing offshore energy services. However, having such a strong market presence, it does face substantial competition from other market players, including Orion Group Holdings, Inc. (ORN - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Limbach Holdings, Inc. (LMB - Free Report) .
Orion Group is the most direct peer on marine and dredging work. Its long-tenured marine construction platform offers similar services, channel maintenance, port expansion and environmental dredging, so the two firms compete directly for many coastal and marine bids. Orion Group’s diversified marine capabilities provide institutional scale and breadth across project types, but GLDD’s newer, purpose-built hopper fleet and targeted subsea capability give it an operational timing and execution advantage on certain shallow-water coastal restorations and specialized offshore rock-placement assignments.
Conversely, EMCOR and Limbach operate mainly in mechanical, electrical and building-systems contracting. Their core markets, including MEP, data centers, facilities services and mission-critical systems, diverge from pure dredging. EMCOR’s scale and integrated services create a durable moat in industrial and facilities arenas, while Limbach’s mission-critical MEP focus serves different clients and contract cadences. Due to this market separation, direct competitive overlap with Great Lakes Dredge & Dock is limited and these firms are more complementary than head-to-head rivals in coastal dredging markets.
Thus, GLDD’s modern, purpose-built fleet, a high-quality capital-project backlog and proven project execution, aligned with favorable market trends in coastal protection and offshore energy, position it to sustain utilization, protect margins and generate stronger free cash flow as capex needs normalize.
Investment Choice for GLDD Stock
As discussed above, Great Lakes Dredge & Dock continues to benefit from a favorable public infrastructure backdrop, disciplined execution and a structurally improved asset base. Its expanding and high-quality backlog, supported by port deepening, coastal resilience, LNG-related and maintenance dredging projects, provides strong revenue visibility and supports high fleet utilization. Besides, operational leverage is translating into structurally higher margins, with adjusted EBITDA and gross margins expanding sharply in 2025.
Trading at a discounted forward P/E, GLDD offers an attractive valuation relative to peers, even though earnings estimate trends look uncertain.
Analysts’ optimism regarding GLDD stock is reflected in all four recommendations, pointing to a "Strong Buy”, representing 100% of all recommendations.
Image Source: Zacks Investment Research
Summing up, based on the strong execution, improving margins and long-term infrastructure tailwinds, this current Zacks Rank #1 (Strong Buy) stock stands as an appealing buy for investors now. You can see the complete list of today’s Zacks #1 Rank stocks here.
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Great Lakes Dredge & Dock Stock Climbs 12% in a Month: Buy or Fold?
Key Takeaways
Great Lakes Dredge & Dock Corporation’s (GLDD - Free Report) stock performance has moved up 12.3% in the past month, outperforming the Zacks Building Products - Heavy Construction industry, the broader Construction sector and the S&P 500 Index.
This Texas-based dredging services provider is benefiting from solid backlog growth driven by large-scale projects across several areas in which it operates, alongside its disciplined bidding approach. Moreover, the company’s efficient project execution efforts are additionally catalyzing prospects, especially margin expansion. With these favorable aspects, accompanied by the new build program and liquidity position, GLDD is well-positioned to scale in the long term and ensure shareholder value, despite a challenging macroenvironment.
Image Source: Zacks Investment Research
Additionally, the recent three consecutive months of Fed rate cuts, from September to October 2025, are encouraging for public construction prospects in the United States. On Dec. 10, 2025, the Federal Reserve slashed its interest rates by another 0.25 percentage points, setting the benchmark between 3.5% and 3.75%. The reduction in borrowing rate catalyzes the ongoing favorable market trends, boosting more project initiations, leading to a promising future.
Let us decode the factors that are driving Great Lakes Dredge & Dock’s growth momentum.
Increased Project Opportunities
Great Lakes Dredge & Dock’s operations mainly focus on complex port deepening, LNG-related dredging and coastal resilience projects. The ongoing strength in the public infrastructure spending across the US is supporting these activities. Besides core dredging projects, the demand for maintenance dredging projects also saw growth in the first nine months of 2025, with the Maintenance backlog growing year over year by 53.9% to $147.6 million.
The company emphasized that prior-year bid discipline resulted in a backlog capable of sustaining high fleet utilization, allowing it to be selective in new bidding rather than pursuing volume for its own sake. This disciplined approach reduces execution risk and improves margin stability. The mix between federally funded and privately funded projects has improved diversification, lowering dependence on any single funding source and insulating operations from political or budgetary disruptions.
Fleet Modernization Strategy
Great Lakes Dredge & Dock has been investing in its multi-year fleet modernization strategy through the new build program since 2020. In the third quarter of 2025, the company welcomed its sixth hopper dredge, Amelia Island, reaching a significant milestone in its dredging new build program. With this delivery, GLDD now operates one of the most technologically advanced hopper dredge fleet in the United States, optimized for shallow and narrow coastal environments where demand for beach nourishment and resilience projects continues to grow.
Equally significant is the ongoing construction of the Acadia, the first US-flagged, Jones Act–compliant subsea rock installation vessel. Scheduled for delivery in the first quarter of 2026, the Acadia expands GLDD’s addressable market beyond traditional dredging into offshore energy and subsea infrastructure protection. During the third quarter of 2025 earnings call, the company confirmed that the vessel is fully booked for 2026, supporting offshore wind projects such as Empire Wind and Sunrise Wind, with additional opportunities being pursued internationally. As heavy construction spending tapers, the company expects materially higher free cash flow generation beginning in 2026, allowing it to transition from an investment phase to a harvest phase.
Improving Margins
GLDD’s effective approach across high fleet utilization, disciplined cost control and a favorable project mix skewed toward capital and coastal protection work is proving incremental for its margin growth. Large-scale projects generally involve more technical complexity and longer durations, allowing the company to absorb fixed costs and deploy its modernized fleet efficiently. Management repeatedly emphasized strong project execution as a core differentiator, noting that operational performance exceeded expectations even in periods of elevated maintenance activity.
During the first nine months of 2025, adjusted EBITDA margin expanded 310 basis points (bps) year over year to 20.2%. The increased gross profit position and top-line leverage aided this uptrend. During the same time frame, gross margin also expanded year over year by 380 bps to 23.7%. As newer vessels enter service and dry-docking intensity normalizes by 2026, Great Lakes Dredge & Dock expects margins to remain structurally strong rather than cyclical. This suggests that recent profitability improvements are not transitory but reflect a step-change in the earnings profile driven by fleet modernization and improved bidding discipline.
GLDD Trades at a Discount
GLDD stock is currently trading at a discount relative to its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 12.18, as shown in the chart below.
Image Source: Zacks Investment Research
Earnings Estimate Revision of GLDD
GLDD’s earnings estimates for 2025 have inched down in the past seven days to $1.09, while the same for 2026 have moved up in the past 60 days.
Image Source: Zacks Investment Research
The estimated figure for 2025 reflects 29.8% year-over-year growth, with the same for 2026 indicating a 0.2% inch-down.
Great Lakes Dredge & Dock Competitive Position
Great Lakes Dredge & Dock occupies a specialized competitive position, driven by strong demand for coastal resilience, port deepening, LNG-related dredging and growing offshore energy services. However, having such a strong market presence, it does face substantial competition from other market players, including Orion Group Holdings, Inc. (ORN - Free Report) , EMCOR Group, Inc. (EME - Free Report) and Limbach Holdings, Inc. (LMB - Free Report) .
Orion Group is the most direct peer on marine and dredging work. Its long-tenured marine construction platform offers similar services, channel maintenance, port expansion and environmental dredging, so the two firms compete directly for many coastal and marine bids. Orion Group’s diversified marine capabilities provide institutional scale and breadth across project types, but GLDD’s newer, purpose-built hopper fleet and targeted subsea capability give it an operational timing and execution advantage on certain shallow-water coastal restorations and specialized offshore rock-placement assignments.
Conversely, EMCOR and Limbach operate mainly in mechanical, electrical and building-systems contracting. Their core markets, including MEP, data centers, facilities services and mission-critical systems, diverge from pure dredging. EMCOR’s scale and integrated services create a durable moat in industrial and facilities arenas, while Limbach’s mission-critical MEP focus serves different clients and contract cadences. Due to this market separation, direct competitive overlap with Great Lakes Dredge & Dock is limited and these firms are more complementary than head-to-head rivals in coastal dredging markets.
Thus, GLDD’s modern, purpose-built fleet, a high-quality capital-project backlog and proven project execution, aligned with favorable market trends in coastal protection and offshore energy, position it to sustain utilization, protect margins and generate stronger free cash flow as capex needs normalize.
Investment Choice for GLDD Stock
As discussed above, Great Lakes Dredge & Dock continues to benefit from a favorable public infrastructure backdrop, disciplined execution and a structurally improved asset base. Its expanding and high-quality backlog, supported by port deepening, coastal resilience, LNG-related and maintenance dredging projects, provides strong revenue visibility and supports high fleet utilization. Besides, operational leverage is translating into structurally higher margins, with adjusted EBITDA and gross margins expanding sharply in 2025.
Trading at a discounted forward P/E, GLDD offers an attractive valuation relative to peers, even though earnings estimate trends look uncertain.
Analysts’ optimism regarding GLDD stock is reflected in all four recommendations, pointing to a "Strong Buy”, representing 100% of all recommendations.
Image Source: Zacks Investment Research
Summing up, based on the strong execution, improving margins and long-term infrastructure tailwinds, this current Zacks Rank #1 (Strong Buy) stock stands as an appealing buy for investors now. You can see the complete list of today’s Zacks #1 Rank stocks here.