Sterling Infrastructure, Inc. (STRL Quick QuoteSTRL - Free Report) is scheduled to report first-quarter 2026 results on May 4, after the market close. The upcoming release is likely to reflect a mix of continued strength in mission-critical end markets, and some seasonal and housing-related pressures.

In the last reported quarter, Sterling reported strong results, with adjusted earnings per share (EPS) and revenues beating the Zacks Consensus Estimate by 15.8% and 16.6%, respectively. Revenues rose to about $755.6 million, up more than 50% year over year, driven primarily by robust growth in the E-Infrastructure segment, especially data center-related work. Profitability improved significantly, with adjusted EPS jumping 78% to $3.08 and adjusted EBITDA increasing around 70%, supported by a favorable mix shift toward higher-margin projects.

This Texas-based e-infrastructure solutions, building solutions and transportation solutions provider has an impressive record of surpassing earnings expectations, exceeding the consensus mark in the last four quarters. The average surprise over this period is 15.7%, as shown in the chart below.

Image Source: Zacks Investment Research

How Are Estimates Placed for STRL?

The Zacks Consensus Estimate for first-quarter EPS has decreased to $2.29 from $2.32 over the past 30 days. The estimated figure implies 40.5% growth from the year-ago reported figure. The consensus mark for revenues is pegged at $585.4 million, indicating 35.8% year-over-year growth.

For 2026, Sterling is expected to register a 25.6% increase in revenues from a year ago. Its bottom line is likely to grow 26.5% from a year ago. Below is what to expect from the STRL stock.

Image Source: Zacks Investment Research

What the Zacks Model Unveils for Sterling Stock

Our proven model does not conclusively predict an earnings beat for Sterling for the quarter to be reported. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen, which is not the case here.

Earnings ESP: STRL has an Earnings ESP of -2.32%. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.

Zacks Rank: The company currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Factors Likely to Shape Sterling’s Q1 Results

Factors Influencing Top Line: Sterling’s first-quarter revenues are expected to have been supported by strong momentum in its E-Infrastructure Solutions segment (which accounted for 69% of fourth-quarter 2025 revenues), which has emerged as the primary growth engine. The company continues to benefit from robust demand for data center, semiconductor and large-scale manufacturing projects, with mission-critical work accounting for a significant portion of the backlog. The data center market, in particular, remains a key driver, alongside geographic expansion into regions like Texas and the Pacific Northwest.

The contribution from the CEC acquisition is also likely to have supported revenue growth, especially in electrical services tied to large data center campuses. Sterling entered 2026 with strong backlog visibility of roughly $3 billion, supplemented by unsigned awards and a growing pipeline, providing solid execution visibility for the quarter.  The Zacks Consensus Estimate for E-Infrastructure Solutions revenues for the to-be-reported quarter is pegged at $400 million, up from $218 million reported a year ago.

Transportation Solutions (which accounted for 20% of total fourth-quarter 2025 revenues) is expected to have delivered modest growth, supported by healthy bid activity and ongoing project execution in core markets like the Rocky Mountains. However, top-line growth in this segment may have been partially tempered by the company’s strategic downsizing of low-margin heavy highway work in Texas. The consensus mark for Transportation Solutions revenues is pegged at $125 million, indicating a decrease of 3.6% year over year.

On the downside, Building Solutions (which accounted for 11% of total fourth-quarter 2025 revenues) likely remained a drag on overall revenues due to continued softness in the residential housing market. Affordability challenges and elevated mortgage rates have constrained new home construction activity, leading to weaker demand in this segment. The consensus mark for Building Solutions revenues is pegged at $78 million, implying an increase of 15.2% year over year.

Seasonality is another factor, as the first quarter is typically the weakest period of the year for Sterling due to weather disruptions and lower construction activity.

Factors Influencing Margins and Bottom Line: Margins in the first quarter are expected to have benefited from Sterling’s ongoing shift toward higher-margin, mission-critical projects, particularly within E-Infrastructure. The company’s focus on large, complex projects and strong execution capabilities has historically supported margin expansion. The Zacks Consensus Estimate for E-Infrastructure Solutions’ operating income for the to-be-reported quarter is pegged at $71 million, up from $46.64 million reported a year ago.

Further support may come from an improving mix in Transportation Solutions, where the exit from low-bid work is expected to enhance profitability over time. Integration benefits from the CEC acquisition and increasing scale in electrical services could have also contributed to margin improvement. The consensus mark for Transportation Solutions’ operating income is pegged at $11.4 million, indicating an increase of 1.3% year over year.

However, some headwinds may have persisted. Seasonal inefficiencies in the first quarter typically pressure margins due to lower utilization and weather-related delays. Continued weakness in the Building Solutions segment, which carries lower margins amid housing softness, may have weighed on overall profitability. The consensus mark for Building Solutions’ operating income is pegged at $6.6 million, calling for a decline of 46.6% year over year.

Higher operating costs tied to growth investments, including increased CapEx and integration expenses, could have also limited margin expansion in the near term.

STRL Stock Price Performance

Shares of Sterling have surged 68.4% year to date (YTD), significantly outperforming the Zacks Engineering – R&D Services industry’s 31.1% growth. The stock has further outperformed the broader Construction sector and the S&P 500, as shown below.

STRL Price Performance (YTD)

Image Source: Zacks Investment Research

STRL stock has outpaced some other players, including AECOM (ACM Quick QuoteACM - Free Report) , Fluor Corporation (FLR Quick QuoteFLR - Free Report) and KBR, Inc. (KBR Quick QuoteKBR - Free Report) YTD. In the said time frame, Fluor has gained 34.6%, while AECOM and KBR have lost 11.8% and 6.7%, respectively.

Valuation Trend for STRL Stock

Sterling shares are currently trading at a forward 12-month price-to-earnings (P/E) ratio of 35.58, a premium to the industry average of 27.54.

STRL stock also appears overvalued compared with other peer companies. AECOM, Fluor and KBR have a forward P/E of 13.16, 18.37 and 9.04, respectively.

STRL’s P/E Ratio (Forward 12 Months) vs. Industry

Image Source: Zacks Investment Research

Why Is STRL Stock a Buy for Now?

Sterling presents a compelling buy case, driven by strong exposure to high-growth, mission-critical markets like data centers and advanced manufacturing. Its E-Infrastructure segment continues to deliver robust momentum, supported by a solid $3 billion backlog and an expanding project pipeline, ensuring strong revenue visibility. The company’s strategic shift toward higher-margin projects and exit from low-return work is supporting sustained margin expansion. Consistent earnings beats and strong growth outlook — mid-20% gains expected in 2026 —reinforce execution strength. Despite a premium valuation, STRL’s superior growth profile, improving mix and leadership in data center infrastructure position it well for continued outperformance.