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 Dycom's Pricing Discipline Drive Stronger Margins in FY27?
Read MoreHide Full Article
Key Takeaways
Pricing discipline and selective bidding are driving Dycom's steady margin expansion into fiscal 2027.
Strong backlog and BEAD funding improve pricing leverage despite labor and cost pressures.
Rational competition and execution focus support resilient and higher-margin growth ahead for Dycom.
Dycom Industries, Inc. (DY - Free Report) is going strong through fiscal 2026 with solid margins reflecting operational discipline, favorable pricing strategy and robust market trends, which are expected to continue into fiscal 2027. In the first nine months of fiscal 2026, its adjusted EBITDA increased year over year by 25.1% to $575.3 million, with adjusted EBITDA margin expanding 140 basis points (bps) to 14.1%.
Despite ongoing labor and equipment cost pressures across the construction and telecom services space, DY’s emphasis on selective bidding and holding onto higher-margin projects is keeping the trend afloat. A backlog of $8.22 billion, with nearly $5 billion expected to convert within the next 12 months, gives the company leverage in customer negotiations, allowing it to price projects in a way that reflects rising complexity, tighter labor markets and higher safety and compliance standards. Moreover, the positive trend across a strong public infrastructure funding environment and the optimism surrounding the Broadband Equity, Access and Deployment (BEAD) program also bodes well.
Importantly, margin expansion in fiscal 2027 does not depend solely on revenue growth but also on pricing discipline. Demand visibility is high, competition remains rational for large, complex programs and customers increasingly value execution certainty over lowest-cost bids. While weather, timing of BEAD awards and customer capital pacing remain variables, Dycom’s current margin trajectory indicates that disciplined pricing, supported by backlog strength and operational scale, can continue to push profitability higher.
The current approach positions Dycom not just for growth, but for stronger and more resilient margins through fiscal 2027 and beyond.
Earnings Estimate Trend Favors Dycom
Dycom’s earnings estimates for fiscal 2026 and fiscal 2027 have trended upward over the past 60 days. The estimated figures for fiscal 2026 and fiscal 2027 imply year-over-year growth of 26.9% and 35%, respectively.
Image Source: Zacks Investment Research
The robust market fundamentals and DY’s strategic in-house capabilities likely induced bullish sentiments among analysts.
Dycom’s Competitive Position
Dycom is emerging as one of the most direct beneficiaries of the next multi-year U.S. fiber and digital infrastructure build cycle. However, this does not alter the competitive aspect in this vast market with key players, including EMCOR Group, Inc. (EME - Free Report) and Quanta Services, Inc. (PWR - Free Report) .
EMCOR is strongest inside the data center footprint, particularly in mechanical and electrical systems, but has limited exposure to outside-plant fiber networks and BEAD-funded rural broadband. Contrastingly, Quanta offers a broader scale and deeper exposure to power transmission, renewable energy and long-haul infrastructure. Quanta’s advantage is resilience across cycles, but its upside from BEAD and last-mile fiber is less concentrated than Dycom’s.
Summing up, Dycom stands out as the most leveraged pure-play on U.S. fiber expansion, BEAD funding and hyperscaler-driven data center networking. On the other hand, its peers EMCOR and Quanta offer broader, but less targeted, infrastructure exposure.
DY Stock’s Price Performance & Valuation Trend
Shares of this specialty contracting firm, operating in the telecom industry, have surged 33.6% in the past six months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
DY stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.76, as evidenced by the chart below.
Image: Bigstock
Will Dycom's Pricing Discipline Drive Stronger Margins in FY27?
Key Takeaways
Dycom Industries, Inc. (DY - Free Report) is going strong through fiscal 2026 with solid margins reflecting operational discipline, favorable pricing strategy and robust market trends, which are expected to continue into fiscal 2027. In the first nine months of fiscal 2026, its adjusted EBITDA increased year over year by 25.1% to $575.3 million, with adjusted EBITDA margin expanding 140 basis points (bps) to 14.1%.
Despite ongoing labor and equipment cost pressures across the construction and telecom services space, DY’s emphasis on selective bidding and holding onto higher-margin projects is keeping the trend afloat. A backlog of $8.22 billion, with nearly $5 billion expected to convert within the next 12 months, gives the company leverage in customer negotiations, allowing it to price projects in a way that reflects rising complexity, tighter labor markets and higher safety and compliance standards. Moreover, the positive trend across a strong public infrastructure funding environment and the optimism surrounding the Broadband Equity, Access and Deployment (BEAD) program also bodes well.
Importantly, margin expansion in fiscal 2027 does not depend solely on revenue growth but also on pricing discipline. Demand visibility is high, competition remains rational for large, complex programs and customers increasingly value execution certainty over lowest-cost bids. While weather, timing of BEAD awards and customer capital pacing remain variables, Dycom’s current margin trajectory indicates that disciplined pricing, supported by backlog strength and operational scale, can continue to push profitability higher.
The current approach positions Dycom not just for growth, but for stronger and more resilient margins through fiscal 2027 and beyond.
Earnings Estimate Trend Favors Dycom
Dycom’s earnings estimates for fiscal 2026 and fiscal 2027 have trended upward over the past 60 days. The estimated figures for fiscal 2026 and fiscal 2027 imply year-over-year growth of 26.9% and 35%, respectively.
Image Source: Zacks Investment Research
The robust market fundamentals and DY’s strategic in-house capabilities likely induced bullish sentiments among analysts.
Dycom’s Competitive Position
Dycom is emerging as one of the most direct beneficiaries of the next multi-year U.S. fiber and digital infrastructure build cycle. However, this does not alter the competitive aspect in this vast market with key players, including EMCOR Group, Inc. (EME - Free Report) and Quanta Services, Inc. (PWR - Free Report) .
EMCOR is strongest inside the data center footprint, particularly in mechanical and electrical systems, but has limited exposure to outside-plant fiber networks and BEAD-funded rural broadband. Contrastingly, Quanta offers a broader scale and deeper exposure to power transmission, renewable energy and long-haul infrastructure. Quanta’s advantage is resilience across cycles, but its upside from BEAD and last-mile fiber is less concentrated than Dycom’s.
Summing up, Dycom stands out as the most leveraged pure-play on U.S. fiber expansion, BEAD funding and hyperscaler-driven data center networking. On the other hand, its peers EMCOR and Quanta offer broader, but less targeted, infrastructure exposure.
DY Stock’s Price Performance & Valuation Trend
Shares of this specialty contracting firm, operating in the telecom industry, have surged 33.6% in the past six months, outperforming the Zacks Building Products - Heavy Construction industry, the broader Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
DY stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 23.76, as evidenced by the chart below.
Image Source: Zacks Investment Research
Dycom stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.