Construction Partners, Inc. (ROAD Quick QuoteROAD - Free Report) has gained 13.5% in the past month, outperforming the Zacks Building Products - Miscellaneous industry, the broader Construction sector and the S&P 500 index.

Recently, on May 8, 2026, the company reported its second-quarter fiscal 2026 earnings, which reflected strong momentum owing to the robust public infrastructure spending and surging private-sector activity tied to data centers, warehouses and manufacturing projects. The quarter’s adjusted earnings of 18 cents per share and revenues of $769.2 million topped the Zacks Consensus Estimate by 460% and 12%, respectively. The metrics even grew year over year by 125% and 34.5%, respectively, with gross profit growing 38.5% to $98.9 million.

Moreover, ROAD’s growing opportunities in effectively executing its ROAD 2030 plan and a disciplined capital allocation strategy with a stable balance sheet heighten the potential of surviving in an uncertain macro scenario.

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Although the increasing inflation, geopolitical risks and labor shortages are concerning, the company’s growing backlog and market opportunities are encouraging enough to beat the rising heat.

What is Driving ROAD’s Growth Momentum?

Effective ROAD 2030 Strategy: Construction Partners appears to be accelerating toward its ambitious ROAD 2030 objectives faster than expected. Strong execution, disciplined acquisitions and organic expansion are helping drive this momentum. The company completed its fourth acquisition of fiscal 2026 with Four Star Paving in Tennessee, marking its 17th acquisition since fiscal 2024.

At the same time, ROAD continues investing in greenfield facilities and vertical integration initiatives to strengthen margins and operational scale. With 11% organic revenue growth in the latest quarter and expanding profitability, the company’s decentralized “family of companies” model is proving highly scalable across fast-growing Sunbelt markets. Management reaffirmed confidence in its long-term plan to double the company’s size, generating $1 billion in annual EBITDA and expanding EBITDA margins to roughly 17%.

Record Backlog Supports Visibility: Construction Partners continues to benefit from favorable infrastructure and commercial construction trends across the Sunbelt. Public transportation funding remains healthy, while private-sector investment tied to data centers, manufacturing facilities and warehouses is creating additional growth opportunities. Management highlighted multiple data center-related projects in Texas and Alabama, reflecting growing AI and digital infrastructure demand.

These favorable trends helped drive project backlog to a record $3.14 billion as of March 31, 2026, up from $2.84 billion a year earlier. Importantly, approximately 80-85% of the next 12 months’ expected contract revenues are already secured in backlog, providing strong visibility heading into the peak construction season and reinforcing confidence in sustained revenue growth.

Raised Fiscal 2026 Outlook Reflects Confidence: Following stronger-than-expected second-quarter fiscal 2026 execution, Construction Partners raised its fiscal 2026 guidance across all major financial metrics. It now expects fiscal 2026 revenues between $3.59 billion and $3.65 billion (from $3.48-$3.56 billion), adjusted EBITDA between $552 million and $564 million (from $534-$550 million) and adjusted EBITDA margins between 15.38% and 15.45% (from 15.34-15.45%).

Management attributed the stronger outlook to favorable weather, efficient project execution, strong acquisition integration and resilient end-market demand. Importantly, management continues to see a compelling long-term demand environment supported by infrastructure modernization, roadway capacity expansion and reindustrialization trends across the Sunbelt. The company also emphasized that federal transportation reauthorization discussions could provide an additional long-term catalyst if infrastructure spending increases further. Together, these factors position Construction Partners for continued profitable expansion over the coming years.

Solid Liquidity Position Supports Shareholder Value: ROAD maintains a healthy financial position that supports both growth investments and long-term shareholder value creation. At the end of the quarter, the company held approximately $77 million in cash and cash equivalents, along with $150 million available under its credit facility. Management also highlighted strong cash generation, with operating cash flow rising to $65.2 million during the quarter. Construction Partners continues to target a leverage ratio near 2.5x over time, reflecting disciplined balance-sheet management despite active acquisition activity. Combined with strong EBITDA growth, expanding margins and vertical integration benefits, the company’s liquidity profile provides flexibility to pursue strategic acquisitions, expand operations and compound long-term shareholder returns.

Earnings Estimate Trend Favors ROAD

ROAD’s earnings estimates for fiscal 2026 and fiscal 2027 have moved upward in the past seven days to $2.95 and $3.72 per share, respectively. The revised estimates for fiscal 2026 and fiscal 2027 imply year-over-year growth of 34.1% and 25.9%, respectively.

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Is Construction Partners Winning the Infrastructure Race?

Construction Partners is capitalizing on booming Sunbelt infrastructure demand through asphalt paving and road construction. Market competitors like Sterling Infrastructure, Inc. (STRL Quick QuoteSTRL - Free Report) , Quanta Services, Inc. (PWR Quick QuotePWR - Free Report) and AECOM (ACM Quick QuoteACM - Free Report) are pursuing broader engineering and construction management opportunities tied to mega infrastructure and mission-critical projects.

Sterling Infrastructure has evolved beyond traditional civil construction into a high-growth e-infrastructure player, capitalizing on booming AI-driven data center and semiconductor construction demand. Sterling Infrastructure’s transportation business remains solid, but hyperscale digital infrastructure projects are increasingly driving backlog and earnings momentum. On the other hand, Quanta is benefiting from massive utility grid modernization, renewable energy expansion and AI-related power infrastructure spending. Record backlog levels reflect rising demand for transmission, substation and energy infrastructure work tied to electrification and data center growth.

Meanwhile, AECOM remains more focused on engineering, consulting and construction management services. The company continues to gain from large transportation, environmental and urban infrastructure programs globally, supported by record backlog, margin expansion initiatives and a relatively asset-light operating model.

ROAD Stock Trades at a Premium

ROAD stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 37.92, as the trend lines suggest below.

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Should You Invest in ROAD Stock Now?

Construction Partners continues to execute well against a highly favorable infrastructure backdrop, supported by accelerating Sunbelt population growth, public roadway spending and rising private-sector demand tied to data centers and manufacturing expansion. Record backlog visibility, disciplined acquisitions and vertical integration initiatives continue to strengthen the company’s long-term earnings profile. Importantly, management’s decision to raise fiscal 2026 guidance across revenue, EBITDA and margin metrics signals confidence in execution despite lingering macro uncertainties. Besides, upward revisions in fiscal 2026 and 2027 earnings estimates further reinforce the positive earnings trajectory.

However, investors should not ignore valuation concerns. ROAD stock currently trades at a premium relative to peers, suggesting much of the near-term optimism may already be reflected in the stock price.

Still, backed by strong infrastructure fundamentals, rising AI-related commercial activity and disciplined capital allocation, ROAD stock appears well-positioned for continued long-term growth. Given the strong momentum and Zacks Rank #2 (Buy), long-term investors can consider buying the stock, though near-term pullbacks may provide more attractive entry opportunities. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.