Sterling Infrastructure, Inc. Just Beat Revenue Estimates By 31%
A week ago, Sterling Infrastructure, Inc. (NASDAQ:STRL) came out with a strong set of third-quarter numbers that could potentially lead to a re-rate of the stock. Statutory earnings performance was extremely strong, with revenue of US$1.6b beating expectations by 31% and earnings per share (EPS) of US$6.92, an impressive 23%ahead of expectations. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Sterling Infrastructure after the latest results.
Following the latest results, Sterling Infrastructure's eight analysts are now forecasting revenues of US$5.43b in 2027. This would be a sizeable 26% improvement in revenue compared to the last 12 months. Per-share earnings are expected to surge 39% to US$25.20. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$5.02b and earnings per share (EPS) of US$23.80 in 2027. So there seems to have been a moderate uplift in sentiment following the latest results, given the upgrades to both revenue and earnings per share forecasts for next year.
View our latest analysis for Sterling Infrastructure
As a result, it might be a surprise to see thatthe analysts have cut their price target 5.6% to US$790, which could suggest the forecast improvement in performance is not expected to last. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. Currently, the most bullish analyst values Sterling Infrastructure at US$1,000 per share, while the most bearish prices it at US$680. These price targets show that analysts do have some differing views on the business, but the estimates do not vary enough to suggest to us that some are betting on wild success or utter failure.
These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Sterling Infrastructure's past performance and to peers in the same industry. The period to the end of 2027 brings more of the same, according to the analysts, with revenue forecast to display 20% growth on an annualised basis. That is in line with its 18% annual growth over the past five years. Compare this with the broader industry, which analyst estimates (in aggregate) suggest will see revenues grow 14% annually. So although Sterling Infrastructure is expected to maintain its revenue growth rate, it's definitely expected to grow faster than the wider industry.
The Bottom Line
The most important thing here is that the analysts upgraded their earnings per share estimates, suggesting that there has been a clear increase in optimism towards Sterling Infrastructure following these results. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. The consensus price target fell measurably, with the analysts seemingly not reassured by the latest results, leading to a lower estimate of Sterling Infrastructure's future valuation.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Sterling Infrastructure going out to 2028, and you can see them free on our platform here..
Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.
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