Key Takeaways Jacobs posted Q2 EPS of $1.75 ( 22% y/y) and gross revenues of $3.7B ( 27%), both above estimates.Jacobs' backlog hit a record $27B ( 22%), fueled by data center, semiconductor, water, power and transit wins.Jacobs raised FY26 net revenue growth, EBITDA margin and EPS outlook; repurchased $220M shares. Jacobs Solutions Inc. (J - Free Report) delivered strong second-quarter fiscal 2026 (ended March 27, 2026) results, with adjusted earnings and revenues topping the Zacks Consensus Estimate and improving year over year.
Jacobs delivered strong top-line growth as healthy demand persisted across priority markets, led by data center and semiconductor activity, with additional support from water, power and transportation. Growth within Infrastructure & Advanced Facilities remained broad-based, highlighted by notable wins including a major wastewater treatment program in San Francisco, a water regulation contract in the United Kingdom, and multiple hyperscaler-related data center awards.
Inside Jacobs’ Q2 ResultsThe company reported adjusted earnings per share (EPS) of $1.75, up 22.4% from the year-ago level, and beat the consensus mark of $1.64 by 6.7%.
Gross revenues rose 27% year over year to $3.7 billion and surpassed the consensus estimate of $3.25 billion by 13.8%. Adjusted net revenues of $2.3 billion were also up 8.8% year over year.
Backlog increased 21.7% year over year to a record $27 billion, underscoring healthy award activity and visibility.
Jacobs Expands Margins on Solid ExecutionProfitability improved year over year as Jacobs benefited from operating discipline and a favorable mix. Adjusted EBITDA rose 14.2% from a year ago to $327.2 million, while adjusted EBITDA margin expanded 70 basis points to 14.1% on adjusted net revenues.
At the segment level, Infrastructure & Advanced Facilities operating profit improved, with margin expanding modestly as project execution held up. PA Consulting also remained a margin-accretive contributor, with operating profit rising and margin staying above 22%, helping lift consolidated profitability despite integration-related items tied to the PA transaction.
Jacobs’ Q2 Segment DetailsInfrastructure & Advanced Facilities (I&AF): Segment revenues totaled $3.34 billion, up 28.2% year over year from $2.60 billion. Excluding $1.37 billion of pass-through revenues, adjusted net revenues were $1.97 billion.
I&AF segment operating profit increased 11.4% year over year to $225.2 million from $203.3 million. Operating profit as a percentage of adjusted net revenues improved to 11.4% from 11.1% a year ago, reflecting modest margin expansion. Backlog in the segment rose 21.9% year over year to $26.54 billion as of March 27, 2026.
PA Consulting: Segment revenues were $358.6 million, up 16.5% year over year from $307.7 million, driven primarily by growth in PA’s public services businesses, including public services and defense and security.
Operating profit rose 18.6% year over year to $79.9 million from $67.3 million, and operating profit as a percentage of revenues improved to 22.3% from 21.9% in the prior-year quarter. PA Consulting backlog increased to $427 million from $392 million a year ago, supported by organic growth.
Jacobs’ Cash Flow and Balance Sheet Reflect PA TimingCash generation was mixed in the quarter, influenced by acquisition-related timing items. Management noted an adjusted free cash outflow of $272 million in the second quarter, partly tied to a favorable first-quarter timing item that reversed, bringing first-half adjusted free cash flow to $93 million.
The balance sheet expanded following the PA transaction and related financing. Jacobs ended the quarter with cash and cash equivalents of $1.37 billion, up from $1.24 billion at the fiscal 2025 end (Sept. 26, 2025). While long-term debt rose to $4.08 billion from $2.24 billion at the fiscal 2025-end. Management also highlighted a net leverage ratio of 2.1x and reiterated its intent to move back below 2.0x by fiscal year-end and toward its longer-term leverage target thereafter.
Net cash used for operating activities was $103.4 million in the first six months of fiscal 2026, compared with net cash provided by operating activities of $11 million in the year-ago period.
J Raises FY26 Outlook AgainEncouraged by first-half momentum, Jacobs raised its fiscal 2026 targets again. The company now expects adjusted net revenues to grow 8.0-10.5% year over year (previously projected to grow between 6.5% and 10%). Adjusted EBITDA margin projected at 14.6-14.9% (versus prior forecast of 14.4% to 14.7%). Adjusted earnings are now expected in the $7.10-$7.35 range, up from the previous expectation of 6.95 to $7.3, while adjusted free cash flow margin is still projected at 7.0-8.5%.
Capital returns remained active, with the company repurchasing $220 million of shares during the quarter and declaring a quarterly dividend of $0.36 per share. Management also discussed leverage and cash generation dynamics following the PA transaction, including near-term cash flow noise tied to acquisition-related payments and a plan to bring leverage back down as earnings and cash flow ramp through fiscal 2027.
Jacobs’ Zacks Rank & Recent Construction ReleasesJacobs currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Vulcan Materials Company (VMC - Free Report) posted exceptional first-quarter 2026 results with adjusted earnings and total revenues beating the Zacks Consensus Estimate and increasing year over year. The quarter’s results reflect benefits realized from the aggregates-led business and consistent focus on its strategic disciplines. Besides, efforts to incorporate top-tier innovation and technology advancements also aided the quarter’s financial performance.
Vulcan reiterated its full-year adjusted EBITDA outlook of $2.4-$2.6 billion and cited a healthy backlog supported by large projects and public construction activity.
EMCOR Group, Inc. (EME - Free Report) reported impressive first-quarter 2026 results, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year on strong demand across its core markets.
EMCOR’s quarterly results reflect continued momentum across key end markets and customers’ confidence in the company’s ability to execute complex and mission-critical projects. Strong activity in sectors like Network and Communications, Institutional, Healthcare, and Water and Wastewater supported growth and drove higher remaining performance obligations. EMCOR now expects revenues between $18.50 billion and $19.25 billion, and diluted earnings per share are projected in the range of $28.25 to $29.75.
Comfort Systems USA, Inc. (FIX - Free Report) delivered a sharp first quarter of 2026, with earnings and revenues topping the Zacks Consensus Estimate and increasing year over year. The quarter reflected strong market conditions, led by heavier technology-sector activity, particularly for data centers.
Comfort Systems also highlighted that recent bookings and underlying persistent demand supported a higher backlog even with increased project burn rates, an important indicator that volume remains strong across key end markets. The backlog as of March 31, 2026, totaled $12.45 billion, increasing 4.3% from $11.94 billion on Dec. 31, 2025, and jumping 80.8% from $6.89 billion reported a year ago.
Growth investors focus on stocks that are seeing above-average financial growth, as this feature helps these securities garner the market's attention and deliver solid returns. But finding a great growth stock is not easy at all.
By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.
However, the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects, makes it pretty easy to find cutting-edge growth stocks.
Jacobs Solutions (J - Free Report) is one such stock that our proprietary system currently recommends. The company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Studies have shown that stocks with the best growth features consistently outperform the market. And for stocks that have a combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy), returns are even better.
Here are three of the most important factors that make the stock of this construction and technical services company a great growth pick right now.
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Jacobs Solutions is 0.2%, investors should actually focus on the projected growth. The company's EPS is expected to grow 17.1% this year, crushing the industry average, which calls for EPS growth of 10.8%.
Impressive Asset Utilization RatioGrowth investors often overlook asset utilization ratio, also known as sales-to-total-assets (S/TA) ratio, but it is an important feature of a real growth stock. This metric exhibits how efficiently a firm is utilizing its assets to generate sales.
Right now, Jacobs Solutions has an S/TA ratio of 1.14, which means that the company gets $1.14 in sales for each dollar in assets. Comparing this to the industry average of 0.86, it can be said that the company is more efficient.
In addition to efficiency in generating sales, sales growth plays an important role. And Jacobs Solutions is well positioned from a sales growth perspective too. The company's sales are expected to grow 13.6% this year versus the industry average of 4.3%.
Promising Earnings Estimate RevisionsSuperiority of a stock in terms of the metrics outlined above can be further validated by looking at the trend in earnings estimate revisions. A positive trend is of course favorable here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
There have been upward revisions in current-year earnings estimates for Jacobs Solutions. The Zacks Consensus Estimate for the current year has surged 0.8% over the past month.
Bottom LineWhile the overall earnings estimate revisions have made Jacobs Solutions a Zacks Rank #2 stock, it has earned itself a Growth Score of A based on a number of factors, including the ones discussed above.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination indicates that Jacobs Solutions is a potential outperformer and a solid choice for growth investors.
Church & Dwight (NYSE:CHD) Director Robert Shearer Sells 8,600 SharesChurch & Dwight Co., Inc. (NYSE:CHD - Get Free Report) Director Robert Shearer sold 8,600 shares of the business's stock in a transaction on Thursday, June 11th. The shares were sold at an average price of $97.97, for a total transaction of $842,542.00. Following the completion of the sale, the director directly owned 30,678 shares in the company, valued at $3,005,523.66. This trade represents a 21.90% decrease in their position. The sale was disclosed in a document filed with the Securities & Exchange Commission, which is accessible through the SEC website.
DALLAS--(BUSINESS WIRE)-- #OurJacobs--Jacobs awarded a sole‑source EPCM contract by Hut 8, an energy infrastructure platform, to deliver a second U.S. AI data center campus.
On May 13, 2026, Jacobs Solutions Inc J shares fell 3.6% to a current price of $114.15. The stock has experienced significant price fluctuations, with a 52-week range of $114.14 to $168.44, reflecting a volatile market sentiment towards the company.
GF Value™ verdict: The current price is $114.15, while GF Value™ estimates fair value at $143.41, indicating a 20.4% undervaluation.GF Score™ of 81/100 suggests a strong overall performance based on multiple factors.Insider activity shows a net sale of $0.2M in the last three months, indicating cautious sentiment among insiders. Is J Overvalued or Undervalued? Jacobs Solutions Inc J is currently trading at $114.15, which is significantly below the GF Value™ of $143.41. This presents a margin of safety of 20.4%, indicating that the stock may be undervalued relative to its intrinsic worth. The GF Valuation label classifies the stock as "Modestly Undervalued," suggesting that there may be potential upside for investors. GF Value™ is GuruFocus' proprietary measure of intrinsic value, calculated from historical trading multiples, past business growth, and future performance estimates.
While the undervaluation presents an opportunity, it is essential to approach this with caution, considering the recent price drops and the overall market conditions. Such fluctuations can indicate underlying risks that may affect future performance.
How Does J's Valuation Compare to Its History? Metric Current Historical P/E (TTM) 35.1x 26.3x Forward P/E 15.9x N/A Jacobs Solutions Inc's current P/E (TTM) of 35.1x is 34% above its 5-year median P/E of 26.3x, suggesting that the stock is trading above its historical valuation. This analysis appears to disagree with the GF Value™ verdict, which indicates undervaluation. Investors should consider this discrepancy when evaluating the stock's potential.
What Does J's GF Score™ Tell Us? Metric Rating GF Score™ 81 Financial Strength 6/10 Profitability 6/10 Growth 7/10 Valuation 8/10 Momentum 5/10 The GF Score™ of 81/100 indicates a strong overall performance, with particularly high ratings in Valuation (8/10) and Growth (7/10). However, the Momentum rank of 5/10 and Financial Strength and Profitability ranks of 6/10 suggest areas for improvement. This mixed performance indicates a balance between solid growth potential and the need for better financial stability.
What Are Insiders Doing with J Stock? In the past three months, insider activity at Jacobs Solutions Inc has shown that insiders sold $0.2M worth of stock while no purchases were made. This net selling could indicate a lack of confidence among insiders regarding the company's near-term prospects or possibly a strategy to capitalize on recent price peaks. This trend should be monitored closely, as insider sentiment can often reflect expectations for the company's future performance.
What This Means for Investors Based on the analysis of GF Value™, Jacobs Solutions Inc J is currently undervalued. However, investors should be cautious due to recent price declines and mixed signals from both valuation metrics and insider activity.
For the complete analysis, visit the Jacobs Solutions Inc J stock page. You can also explore the GF Value™ page for detailed valuation methodology, or use the GuruFocus Stock Screener to find similar opportunities.
Frequently Asked Questions What is J's GF Score™?
J's GF Score™ is 81/100, indicating a strong overall performance based on key financial metrics.
Is J overvalued or undervalued?
Jacobs Solutions Inc is currently undervalued, with a GF Value™ of $143.41 compared to its current price of $114.15.
What is J's P/E ratio?
Jacobs Solutions Inc has a P/E (TTM) ratio of 35.1x, which is above its 5-year median P/E of 26.3x, indicating the stock is trading at a premium relative to its historical valuation.
This stock alert was generated using automated technology and GuruFocus financial data to provide readers with timely and accurate market reporting. This content was reviewed by GuruFocus editorial team prior to publication. Please send any questions or comments about this story to [email protected].
DALLAS--(BUSINESS WIRE)-- #OurJacobs--Jacobs appoints Cheryl Lim as chief human resources officer, reporting directly to Chair and Chief Executive Officer Bob Pragada.
Jacobs (NYSE: J) has been selected by Great British Energy – Nuclear to provide environmental services for the Oldbury site in South Gloucestershire, supporting the potential development of new nuclear generation in the U.K.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20260521657672/en/
The Oldbury site in South Gloucestershire, U.K. Image: Great British Energy - Nuclear
Jacobs will develop environmental baseline data across terrestrial and marine environments, along with environmental assessments, Habitats Regulations Assessment and associated activities to inform future potential planning, design and permitting decisions. Jacobs will deliver the services with AtkinsRéalis and AECOM as subconsultants, bringing together a multidisciplinary team to support environmental surveys, impact assessments and regulatory approvals.
Jacobs Executive Vice President Richard Sanderson said: “Strengthening the U.K.’s energy security and advancing lower-carbon power requires new civil nuclear development at pace. Jacobs has supported some of the most complex nuclear programs in the U.K. and globally, working across the full lifecycle from early development through delivery. We bring that experience to Great British Energy – Nuclear at Oldbury, helping lay the environmental foundations needed to support long-term project success.”
Great British Energy - Nuclear Chief Executive Simon Roddy added: “As part of our role to position Oldbury for nuclear development, it’s important we continue to deepen our understanding of the site with various packages of work, such as ground investigations and archaeological surveys. I'm pleased to welcome Jacobs and their partners to the team to better our knowledge of Oldbury through environmental assessments, which will be key to informing future planning decisions.”
The contract builds on initial site characterization activities and will help assess the suitability of the Oldbury site for potential nuclear development. The work will support the evidence base needed to inform planning and consenting decisions, as well as future design and construction considerations.
Jacobs’ appointment builds on more than 60 years of experience delivering global civil nuclear solutions across the full asset lifecycle in highly regulated environments—from new build programs to decommissioning and waste management and disposal. The company continues to play a leading role in the U.K.’s civil nuclear industry, contributing to major programs such as Sizewell C, Hinkley Point C and Sellafield. This experience planning for nuclear technologies will also have increasing relevance across the globe as the energy sector looks to keep pace with demand.
At Jacobs, we're challenging today to reinvent tomorrow – delivering outcomes and solutions for the world’s most complex challenges. With approximately $12 billion in annual revenue and a talent force of approximately 47,000, we provide end-to-end services in advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. From advisory and consulting, feasibility, planning, design, program and lifecycle management, we’re creating a more connected and sustainable world. See how at jacobs.com and connect with us on LinkedIn, Instagram, X and Facebook.
Jacobs employs more than 6,000 people across the U.K., operating from 15 core offices and more than 35 additional sites. Working with HM Government, local authorities and the private sector, Jacobs helps shape and deliver the nation’s most critical infrastructure, energy, environmental and community programs — creating social value by improving resilience, driving economic growth and enhancing quality of life.
Certain statements contained in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," and similar words are intended to identify forward-looking statements. We base these forward-looking statements on management's current estimates and expectations, as well as currently available competitive, financial and economic data. Forward-looking statements, however, are inherently uncertain. There are a variety of factors that could cause business results to differ materially from our forward-looking statements including, but not limited to, uncertainties as to, the timing of the award of projects and funding and potential changes to the amounts provided for under the Infrastructure Investment and Jobs Act and other legislation and executive orders related to governmental spending, including any directive to federal agencies to reduce federal spending or the size of the federal workforce, and changes in U.S. or foreign tax laws, including the tax legislation enacted in the U.S. in July 2025, statutes, rules, regulations or ordinances, including the impact of, and changes to tariffs and retaliatory tariffs or trade policies, that may adversely impact our future financial positions or results of operations, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets, the possibility of a recession or economic downturn, and increased uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, among others. For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements, see our filings with the U.S. Securities and Exchange Commission. The company is not under any duty to update any of the forward-looking statements after the date of this press release to conform to actual results, except as required by applicable law.
View source version on businesswire.com: https://www.businesswire.com/news/home/20260521657672/en/
Key Takeaways Jacobs JV with Stantec will support Greater Western Water's 5-year water infrastructure program.Jacobs' JV will provide design, advisory and assessment services for water, wastewater, plants and dams.Jacobs' backlog rose 22% YoY to $27B, with management lifting fiscal 2026 revenue guidance. The joint venture (JV) of Jacobs Solutions Inc. (J - Free Report) and Stantec has been selected to be the engineering services partner for a five-year Infrastructure Planning and Delivery Program for Greater Western Water.
The JV will work to support the planning, design and delivery of critical water infrastructure across Melbourne’s fast-growing western region. For Jacobs, the contract strengthens its position in the water infrastructure sector while providing long-term revenue visibility through a multi-year project pipeline.
The multi-year program is designed to modernize and scale up the utility network to keep pace with rapid population and commercial growth across Melbourne’s western suburbs.
Following the news, shares of Jacobs inched up 1% during yesterday’s trading session.
Modernization Investments to Drive GrowthThe JV in discussion will offer engineering and advisory services, including options assessment, functional and detailed design for water and wastewater networks, treatment plants and dams. Additionally, the partnership might support groundwater and surface water assessments, discharge quality analysis, contaminated land investigations, construction-phase services and the development of engineering standards. The program will operate under a new integrated project delivery model, where partners collaborate closely from planning through execution to improve coordination, reduce inefficiencies and deliver stronger long-term outcomes for customers and local communities.
The program is expected to enhance water resilience and support reliable water and sewerage services across Greater Western Water’s service area, which covers more than 580,000 customers across a 3,700-square-kilometer service area.
For Jacobs, the contract further strengthens its position in the water infrastructure market and extends its eight-year relationship with Greater Western Water. The win also aligns with the company’s broader momentum in infrastructure, supported by strong bookings and a record backlog.
Jacobs’ Backlog Strength Supports Growth TrendJacobs’ record-breaking backlog performance during the second quarter of fiscal 2026 serves as the primary engine driving its accelerating long-term growth trend. The company expanded its consolidated backlog by 22% year over year to an unprecedented $27 billion. This accumulation of work is backed by a trailing 12-month book-to-bill ratio of 1.4x on gross revenue and 1.2x on net revenues, highlighting five consecutive quarters of bookings outperforming revenue burn.
Furthermore, high-profile wins in critical infrastructure, such as the Terminal S expansion at Dallas Fort Worth International Airport and municipal wastewater projects in San Francisco, ensure a reliable, long-tail design and construction cycle. Management has confidently raised its full-year fiscal 2026 organic net revenue growth guidance to a range of 8% to 10.5%, proving that its record backlog is successfully translating into predictable, high-margin top and bottom-line growth.
J’s Share Price PerformanceJacobs’ stock has declined 12.5% year to date compared with the Zacks Building Products - Miscellaneous industry’s 2.4% fall. Near-term prospects remain pressured by risks tied to policy-driven infrastructure funding, currency translation headwinds and higher leverage following the PA Consulting acquisition.
Image Source: Zacks Investment Research
Nonetheless, the company continues to benefit from a growing backlog and healthy demand across transportation, water, energy and advanced manufacturing markets.
J’s Zacks Rank & Key PicksJacobs currently carries a Zacks Rank #3 (Hold).
Some better-ranked stocks from the Construction sector are:
Comfort Systems USA, Inc. (FIX - Free Report) flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 39.3%, on average. FIX stock has surged 101.8% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Comfort Systems’ fiscal 2026 sales and earnings per share (EPS) indicates growth of 30.7% and 48%, respectively, from the prior-year levels.
Sterling Infrastructure, Inc. (STRL - Free Report) flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. STRL stock has jumped 155.9% year to date.
The Zacks Consensus Estimate for Sterling’s 2026 sales and EPS indicates growth of 47.4% and 63.3%, respectively, from the prior-year levels.
Quanta Services, Inc. (PWR - Free Report) flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average. PWR stock has climbed 75.9% year to date.
The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS indicates growth of 21.4% and 29.8%, respectively, from the prior-year levels.
DALLAS--(BUSINESS WIRE)-- #OurJacobs--Jacobs selected for multiple frameworks supporting the modernization and security of the north of Scotland's electricity transmission network.
A month has gone by since the last earnings report for Jacobs Solutions (J - Free Report) . Shares have lost about 4.2% in that time frame, underperforming the S&P 500.
But investors have to be wondering, will the recent negative trend continue leading up to its next earnings release, or is Jacobs Solutions due for a breakout? Well, first let's take a quick look at its latest earnings report in order to get a better handle on the recent catalysts for Jacobs Solutions Inc. before we dive into how investors and analysts have reacted as of late.
Jacobs Q2 Earnings & Revenues Top Estimates, Up Y/Y, FY26 View RaisedJacobs delivered strong second-quarter fiscal 2026 (ended March 27, 2026) results, with adjusted earnings and revenues topping the Zacks Consensus Estimate and improving year over year.
Jacobs delivered strong top-line growth as healthy demand persisted across priority markets, led by data center and semiconductor activity, with additional support from water, power and transportation. Growth within Infrastructure & Advanced Facilities remained broad-based, highlighted by notable wins including a major wastewater treatment program in San Francisco, a water regulation contract in the United Kingdom, and multiple hyperscaler-related data center awards.
Inside Jacobs’ Q2 ResultsThe company reported adjusted earnings per share (EPS) of $1.75, up 22.4% from the year-ago level, and beat the consensus mark of $1.64 by 6.7%.
Gross revenues rose 27% year over year to $3.7 billion and surpassed the consensus estimate of $3.25 billion by 13.8%. Adjusted net revenues of $2.3 billion were also up 8.8% year over year.
Backlog increased 21.7% year over year to a record $27 billion, underscoring healthy award activity and visibility.
Jacobs Expands Margins on Solid ExecutionProfitability improved year over year as Jacobs benefited from operating discipline and a favorable mix. Adjusted EBITDA rose 14.2% from a year ago to $327.2 million, while adjusted EBITDA margin expanded 70 basis points to 14.1% on adjusted net revenues.
At the segment level, Infrastructure & Advanced Facilities operating profit improved, with margin expanding modestly as project execution held up. PA Consulting also remained a margin-accretive contributor, with operating profit rising and margin staying above 22%, helping lift consolidated profitability despite integration-related items tied to the PA transaction.
Jacobs’ Q2 Segment DetailsInfrastructure & Advanced Facilities (I&AF): Segment revenues totaled $3.34 billion, up 28.2% year over year from $2.60 billion. Excluding $1.37 billion of pass-through revenues, adjusted net revenues were $1.97 billion.
I&AF segment operating profit increased 11.4% year over year to $225.2 million from $203.3 million. Operating profit as a percentage of adjusted net revenues improved to 11.4% from 11.1% a year ago, reflecting modest margin expansion. Backlog in the segment rose 21.9% year over year to $26.54 billion as of March 27, 2026.
PA Consulting: Segment revenues were $358.6 million, up 16.5% year over year from $307.7 million, driven primarily by growth in PA’s public services businesses, including public services and defense and security.
Operating profit rose 18.6% year over year to $79.9 million from $67.3 million, and operating profit as a percentage of revenues improved to 22.3% from 21.9% in the prior-year quarter. PA Consulting backlog increased to $427 million from $392 million a year ago, supported by organic growth.
Jacobs’ Cash Flow and Balance Sheet Reflect PA TimingCash generation was mixed in the quarter, influenced by acquisition-related timing items. Management noted an adjusted free cash outflow of $272 million in the second quarter, partly tied to a favorable first-quarter timing item that reversed, bringing first-half adjusted free cash flow to $93 million.
The balance sheet expanded following the PA transaction and related financing. Jacobs ended the quarter with cash and cash equivalents of $1.37 billion, up from $1.24 billion at the fiscal 2025 end (Sept. 26, 2025). While long-term debt rose to $4.08 billion from $2.24 billion at the fiscal 2025-end. Management also highlighted a net leverage ratio of 2.1x and reiterated its intent to move back below 2.0x by fiscal year-end and toward its longer-term leverage target thereafter.
Net cash used for operating activities was $103.4 million in the first six months of fiscal 2026, compared with net cash provided by operating activities of $11 million in the year-ago period.
J Raises FY26 Outlook AgainEncouraged by first-half momentum, Jacobs raised its fiscal 2026 targets again. The company now expects adjusted net revenues to grow 8.0-10.5% year over year (previously projected to grow between 6.5% and 10%). Adjusted EBITDA margin projected at 14.6-14.9% (versus prior forecast of 14.4% to 14.7%). Adjusted earnings are now expected in the $7.10-$7.35 range, up from the previous expectation of 6.95 to $7.3, while adjusted free cash flow margin is still projected at 7.0-8.5%.
Capital returns remained active, with the company repurchasing $220 million of shares during the quarter and declaring a quarterly dividend of 36 cents per share. Management also discussed leverage and cash generation dynamics following the PA transaction, including near-term cash flow noise tied to acquisition-related payments and a plan to bring leverage back down as earnings and cash flow ramp through fiscal 2027.
How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended downward during the past month.
The consensus estimate has shifted -5.23% due to these changes.
VGM ScoresAt this time, Jacobs Solutions has a subpar Growth Score of D, a score with the same score on the momentum front. Charting a somewhat similar path, the stock has a score of C on the value side, putting it in the middle 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been broadly trending downward for the stock, and the magnitude of these revisions indicates a downward shift. Interestingly, Jacobs Solutions has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
Performance of an Industry PlayerJacobs Solutions is part of the Zacks Building Products - Miscellaneous industry. Over the past month, United Rentals (URI - Free Report) , a stock from the same industry, has gained 9.6%. The company reported its results for the quarter ended March 2026 more than a month ago.
United Rentals reported revenues of $3.99 billion in the last reported quarter, representing a year-over-year change of +7.2%. EPS of $9.71 for the same period compares with $8.86 a year ago.
United Rentals is expected to post earnings of $11.60 per share for the current quarter, representing a year-over-year change of +10.8%. Over the last 30 days, the Zacks Consensus Estimate has changed +0.1%.
United Rentals has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
Key Takeaways Jacobs won multiple SSEN Transmission frameworks to modernize and secure northern Scotland's grid.OT framework: J to design secure substation environments using segmentation and real-time threat monitoring.Digital Services: Jacobs will use AI-enabled data to improve efficiency and management on SSEN's network. Jacobs Solutions Inc. (J - Free Report) has been selected by SSEN Transmission for multiple strategic frameworks to support the modernization and security of the electricity transmission network in northern Scotland. The work, with a combined potential value of more than $1 billion, spans operational technology, cybersecurity, substation design and digital services and is aimed at improving grid resilience while enabling greater renewable energy integration.
The frameworks come as the U.K. continues to prioritize energy security, grid modernization and decarbonization. By combining its energy, power, program advisory, digital and data capabilities with PA Consulting’s expertise, Jacobs will support SSEN Transmission in building more secure, efficient and data-driven energy infrastructure.
Following the news, shares of Jacobs inched up 1.9% during yesterday’s trading session.
SSEN Frameworks Expand Energy Transition OpportunitiesUnder the Operational Technology framework, Jacobs will help design, deploy and assure secure OT environments across substations. The scope includes cyber-by-design principles, network segmentation and real-time threat monitoring, supporting the protection of critical infrastructure and safe, reliable grid operations.
Through the Digital Services framework, Jacobs will apply AI-enabled digital and data solutions to improve operational efficiency, asset management and decision-making across SSEN’s network. The work supports SSEN’s RIIO-T3 transformation program, which focuses on expanding the north of Scotland’s transmission network, supporting renewable integration and advancing decarbonization.
The awards further highlight Jacobs’ ability to combine strategic consulting, engineering, cybersecurity and digital innovation for large-scale infrastructure programs. They also strengthen the company’s position in the growing grid modernization and energy transition markets.
Backlog Strength Supports Jacobs’ Growth OutlookJacobs’ recent financial performance adds further support to its long-term growth outlook. In the second quarter of fiscal 2026, the company reported a record backlog of $27 billion, up 22% year over year, with a trailing 12-month book-to-bill ratio of 1.4x on gross revenues and 1.2x on adjusted net revenues.
During the said quarter, Jacobs also raised its fiscal 2026 organic net revenue growth guidance to 8-10.5%, reflecting continued business momentum. Management pointed to strength across data centers, semiconductors, water, energy and power, and transportation, supported by recent wins such as the Dallas Fort Worth International Airport Terminal S expansion and the San Francisco Southeast Wastewater Treatment Plant project.
J’s Share Price PerformanceJacobs’ stock has declined 6.7% year to date against the Zacks Building Products - Miscellaneous industry’s 0.2% growth. Near-term performance may remain constrained by uncertainties surrounding infrastructure funding policies, foreign exchange headwinds and elevated leverage following the PA Consulting acquisition.
Despite these challenges, the company continues to benefit from a robust backlog and solid demand across key end markets, including transportation, water, energy and advanced manufacturing.
J’s Zacks Rank & Key PicksJacobs currently carries a Zacks Rank #3 (Hold).
Some top-ranked stocks from the Construction sector are:
Comfort Systems USA, Inc. (FIX - Free Report) flaunts a Zacks Rank #1 (Strong Buy) at present. The company delivered a trailing four-quarter earnings surprise of 39.3%, on average. FIX stock has surged 101.8% year to date. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Comfort Systems’ fiscal 2026 sales and earnings per share (EPS) indicates growth of 30.5% and 49.1%, respectively, from the prior-year levels.
Sterling Infrastructure, Inc. (STRL - Free Report) flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 29.1%, on average. STRL stock has jumped 155.9% year to date.
The Zacks Consensus Estimate for Sterling’s 2026 sales and EPS indicates growth of 48% and 65%, respectively, from the prior-year levels.
Quanta Services, Inc. (PWR - Free Report) flaunts a Zacks Rank of 1 at present. The company delivered a trailing four-quarter earnings surprise of 10.3%, on average. PWR stock has climbed 75.9% year to date.
The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS indicates growth of 21.5% and 30%, respectively, from the prior-year levels.
Supporting data-driven decision-making and long-term resilience across water services
DALLAS--(BUSINESS WIRE)--Jacobs (NYSE: J) has been appointed to Yorkshire Water’s artificial intelligence services framework, supporting the utility’s use of data and artificial intelligence (AI) to improve operational performance, customer outcomes and long-term resilience across its water and wastewater services. Yorkshire Water estimates the overall framework has a total value of up to approximately $45 million (£32M) over five years.
"Supports Yorkshire Water’s ambition to apply data-driven tools in practical ways that improve performance, reliability and long-term service delivery."
Share The appointment comes as the U.K. water sector prepares for Asset Management Period 8 (AMP8), with water companies increasing investment in digital and AI capabilities to meet tighter regulatory requirements, strengthen resilience and manage affordability pressures.
Under the framework, Jacobs will provide specialist digital and artificial intelligence consulting services, working collaboratively with Yorkshire Water to co-develop scalable solutions and digital products that support decision-making, asset performance and operational efficiency. The appointment builds on Jacobs’ ongoing work with Yorkshire Water.
Drawing on its water industry and digital consulting experience, in the past several years Jacobs has advanced digital solutions to leverage AI across the asset lifecycle, from planning and operations to maintenance and performance optimization, with demonstrated reductions long-term operating costs.
Jacobs Executive Vice President Amer Battikhi said: “Utilities are increasingly focused on moving artificial intelligence from testing environments into day-to-day operations. This framework supports Yorkshire Water’s ambition to apply data-driven tools in practical ways that improve performance, reliability and long-term service delivery.”
Following significant investment in its data platform and internal data science capability, Yorkshire Water is entering a new phase of AI adoption focused on operational deployment. Jacobs will support this transition by scaling applied, data-driven solutions across the business.
Jacobs supports water utilities in the U.K. and globally with integrated digital, data and engineering services that address resilience, regulatory and affordability challenges while improving outcomes for customers and communities. Projects include providing operational technology cybersecurity to support critical infrastructure security for Hampton Roads Sanitation District, a major U.S. wastewater utility; creating the first digital twin of PUB's Changi Water Reclamation Plant in Singapore; to improving wastewater network outcomes at United Utilities in the U.K. using predictive analytics.
At Jacobs, we're challenging today to reinvent tomorrow – delivering outcomes and solutions for the world’s most complex challenges. With approximately $12 billion in annual revenue and a talent force of approximately 47,000, we provide end-to-end services in advanced manufacturing, cities & places, energy, environmental, life sciences, transportation and water. From advisory and consulting, feasibility, planning, design, program and lifecycle management, we’re creating a more connected and sustainable world. See how at jacobs.com and connect with us on LinkedIn, Instagram, X and Facebook.
Jacobs employs more than 6,000 people across the U.K., operating from 15 core offices and over 35 additional sites. Working with HM Government, local authorities and the private sector, Jacobs helps shape and deliver the nation’s most critical infrastructure, energy, environmental and community programs — creating social value by improving resilience, driving economic growth and enhancing quality of life.
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Certain statements contained in this press release constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that do not directly relate to any historical or current fact. When used herein, words such as "expects," "anticipates," "believes," "seeks," "estimates," "plans," "intends," "future," "will," "would," "could," "can," "may," and similar words are intended to identify forward-looking statements. We base these forward-looking statements on management's current estimates and expectations, as well as currently available competitive, financial and economic data. Forward-looking statements, however, are inherently uncertain. There are a variety of factors that could cause business results to differ materially from our forward-looking statements including, but not limited to, uncertainties as to, the timing of the award of projects and funding and potential changes to the amounts provided for under the Infrastructure Investment and Jobs Act and other legislation and executive orders related to governmental spending, including any directive to federal agencies to reduce federal spending or the size of the federal workforce, and changes in U.S. or foreign tax laws, including the tax legislation enacted in the U.S. in July 2025, statutes, rules, regulations or ordinances, including the impact of, and changes to tariffs and retaliatory tariffs or trade policies, that may adversely impact our future financial positions or results of operations, as well as general economic conditions, including inflation and the actions taken by monetary authorities in response to inflation, changes in interest rates and foreign currency exchange rates, changes in capital markets, the possibility of a recession or economic downturn, and increased uncertainty and risks, including policy risks and potential civil unrest, relating to the outcome of elections across our key markets and elevated geopolitical tension and conflicts, among others. For a description of these and additional factors that may occur that could cause actual results to differ from our forward-looking statements, see our filings with the U.S. Securities and Exchange Commission. The company is not under any duty to update any of the forward-looking statements after the date of this press release to conform to actual results, except as required by applicable law.
Key Takeaways FIX backlog jumped 80.8% year over year as AI-driven data center demand boosted HVAC activity.STRL expects 2026 revenues of $3.70B-$3.80B as AI data center projects fuel growth.PWR raised 2026 guidance and posted record $48.5B backlog tied to power and data centers. The artificial intelligence (AI) frenzy remains intact as the AI infrastructure space remains rock solid, supported by an extremely bullish demand scenario. Research firm McKinsey & Co. has estimated that global AI-powered data center infrastructure capex will reach around $7 trillion by 2030.
Four major hyperscalers have decided to invest a massive $725 billion in 2026 as capital expenditure for AI-powered data center infrastructure development, higher than the $670 billion estimated earlier.
Here, we have narrowed our search to three Zacks top-ranked AI-powered construction giants that have posted solid first-quarter 2026 earnings results and guidance. These stocks have skyrocketed year to date, yet they have double-digit upside potential for the short term.
These stocks are: Comfort Systems USA Inc. (FIX - Free Report) , Sterling Infrastructure Inc. (STRL - Free Report) and Quanta Services Inc. (PWR - Free Report) . Each of our picks currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The chart below shows the price performance of our three picks year to date.
Image Source: Zacks Investment Research
Comfort Systems USA Inc.Comfort Systems operates primarily in the commercial and industrial heating, ventilation and air conditioning (HVAC) markets, and performs most of its services within manufacturing plants, office buildings, retail centers, apartment complexes, and healthcare, education and government facilities.
The data center boom, driven by AI, cloud computing, and high-performance computing, is fueling demand for specialized HVAC solutions from FIX. Cooling systems for these facilities should deliver precise and reliable performance, prompting investments in advanced technologies such as liquid cooling and modular units.
This segment is becoming a significant growth driver for FIX, offering high-margin growth and attracting M&A activity. HVAC firms with capabilities in precision cooling and energy-efficient infrastructure are well-positioned to capture share in this fast-expanding niche.
Strong Guidance The last reported quarter reflected strong market conditions, led by heavier technology-sector activity, particularly for data centers. Management highlighted that recent bookings and underlying persistent demand supported a higher backlog even with increased project burn rates, an important indicator that volume remains strong across key end markets.
Backlog as of March 31, 2026, totaled $12.45 billion, increasing 4.3% from $11.94 billion at Dec. 31, 2025, and jumping 80.8% from $6.89 billion reported a year ago. On a same-store basis, backlog climbed to $12.21 billion from $6.89 billion in the year-ago period.
Solid Estimate Revisions and Price UpsideComfort Systems USA has an expected revenue and earnings growth rate of 30.7% and 48%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 17% in the last 30 days.
The short-term average price target of brokerage firms for the stock represents an increase of 13.7% from the last closing price of $1,828.25. The brokerage target price is currently in the range of $1,910-$2,518. This indicates a maximum upside of 37.7% and no downside. The risk/reward ratio is extremely favorable.
Sterling Infrastructure Inc.Sterling Infrastructure operates in E-Infrastructure, Building and Transportation Solutions principally in the United States, across the South, Northeast, Mid-Atlantic and the Rocky Mountain States, California and Hawaii.
STRL specializes in constructing complex data centers, e-commerce distribution facilities, and manufacturing sites. The company is a major provider of high-density, AI-Powered data centers. STRL is a notable beneficiary of the massive AI data center boom.
E-Infrastructure Solutions projects develop advanced, large-scale site development systems and services for data centers, e-commerce distribution centers, warehousing, transportation, energy and more.
Building Solutions projects include residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs and other concrete work. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, light rail, water, wastewater and storm drainage systems.
Strong Guidance STRL projected 2026 total revenues in the range of $3.70-$3.80 billion. Adjusted net income will be around $572-592 million. Adjusted EPS is likely to be in the range of $18.40 to $19.05. Adjusted EBITDA will be around $843-$873 million.
Solid Estimate Revisions and Price UpsideSterling Infrastructure has an expected revenue and earnings growth rate of 47.4% and 63.3%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 29% over the last 30 days.
The short-term average price target of brokerage firms for the stock represents an increase of 24.6% from the last closing price of $732.94. The brokerage target price is currently in the range of $875-$956. This indicates a maximum upside of 30.4% and no downside. The risk/reward ratio is extremely favorable.
Quanta Services Inc.Quanta Services’ mix across transmission and distribution, grid hardening, renewable integration and generation gives it multiple paths to participate as those plans become multi-year capital programs. Surging AI-related power demand and expanding utility investments are driving data center project opportunities, making data centers a central pillar of PWR’s long-term growth strategy.
PWR achieved a record total backlog of $48.5 billion as of March 31, 2026, providing a clear and durable runway for long-term growth. This record includes a 12-month backlog of $28.2 billion and remaining performance obligations of $26.2 billion. The Electric Power Infrastructure Services segment accounted for $40.1 billion of the total backlog.
PWR is heavily investing in deepening its vertical supply chain to offset the ongoing global uncertainties and rising inflation. The company expects to invest $500-$700 million over the next several years in power transformer manufacturing facilities and related strategy, which is intended to double transformer manufacturing capacity.
Strong Guidance PWR raised full-year 2026 expectations. Quanta now forecasts consolidated revenues of $34.7-$35.2 billion (compared with the prior expectations of $33.25 billion-$33.75 billion) and adjusted EPS of $13.55-$14.25 (compared with the earlier projection of $12.65–$13.35). Adjusted EBITDA is projected in the range of $3.49-$3.65 billion, up from the earlier expectation of $3.34-3.50 billion.
On a segment basis, Electric Infrastructure Solutions is expected to generate $28.2-$28.5 billion of revenues with an operating income margin of 10.1-10.5%, while Underground Utility and Infrastructure Solutions is projected to deliver $6.50-$6.70 billion of revenue with an operating margin of about 8.25-8.5%. PWR also reaffirmed free cash flow expectations of $1.55-$2.05 billion for 2026.
Solid Estimate Revisions and Price UpsideQuanta Services has an expected revenue and earnings growth rate of 21.4% and 29.8%, respectively, for the current year. The Zacks Consensus Estimate for the current year’s earnings has improved 6.1% over the last 30 days.
The short-term average price target of brokerage firms for the stock represents an increase of 11.2% from the last closing price of $723.44. The brokerage target price is currently in the range of $693-$901. This indicates a maximum upside of 24.5% and a downside of 4.2%. The risk/reward ratio is 1:5.8.
Key Takeaways Sterling ended Q1 2026 with $512M cash, about $224M net cash, and its $150M revolver still unused.STRL is exploring acquisitions to broaden reach and services in data center, semiconductor and critical work.Sterling's backlog surged 131% to $5.2B; the opportunity pool nears $6.5B as CEC joint wins arrive early. Sterling Infrastructure, Inc.’s (STRL - Free Report) massive cash pile could become one of the company’s biggest strategic weapons in the AI infrastructure boom. At the end of the first quarter of 2026, Sterling reported cash holdings of $511.9 million, up from $390.7 million at year-end 2025, while total debt declined slightly to $287 million from $291 million. This left the company with a net cash position of approximately $224 million, while its entire $150 million revolving credit facility remained undrawn.
Management made it clear that this balance-sheet strength is not sitting idle. Sterling is actively evaluating acquisitions that can expand both its geographic reach and service capabilities, especially in high-growth infrastructure markets tied to data centers, semiconductors and mission-critical construction. The strategy is increasingly important as customer expansion trends continue to broaden Sterling’s geographic footprint. Management highlighted growing opportunities in Texas, the Pacific Northwest and the Midwest as hyperscale customers accelerate multiyear AI infrastructure spending plans.
The successful integration of CEC may further strengthen investor confidence in Sterling’s M&A playbook. CEC has already accelerated Sterling’s cross-selling strategy between site development and electrical services, with joint project wins arriving six to eight months earlier than expected. Management also expects CEC margins to improve by 300 to 500 basis points over the next 12 to 18 months as lower-margin operations are phased out. Combined with its rapidly expanding backlog — which surged 131% year over year to $5.2 billion, including unsigned awards — and visibility into a total opportunity pool approaching $6.5 billion, STRL has both the financial capacity and strategic rationale to become more acquisitive.
If Sterling can continue deploying capital into acquisitions that deepen vertical integration, expand regional reach and improve labor capacity, its $512 million cash position may become a key catalyst behind the company’s next phase of AI infrastructure-driven growth.
Sterling’s Acquisition Firepower: Balance Sheet Strength as a DifferentiatorSterling is increasingly differentiating itself through a focused expansion strategy aimed at high-growth AI infrastructure and mission-critical construction markets. This focused approach contrasts with the broader, scale-driven strategies of peers MasTec, Inc. (MTZ - Free Report) and EMCOR Group, Inc. (EME - Free Report) , allowing Sterling to align more closely with mission-critical demand trends.
MasTec is also preparing to use M&A more actively, but with a broader infrastructure mandate. The company reported approximately $1.8 billion of liquidity and net leverage of 1.8x, giving it room to support organic growth while pursuing acquisitions. MasTec now expects acquisitions to play a larger role in expanding key platforms such as clean energy, power delivery, communications and data-center-related infrastructure.
EMCOR, meanwhile, continues to use acquisitions to strengthen its already large electrical, mechanical and building-services platform. The company reported $916 million of cash and said its balance sheet enables it to fund organic growth, pursue strategic M&A and return capital to shareholders. EMCOR’s acquisition focus remains primarily on low- to mid-voltage electrical construction, mechanical services, fire protection, building controls and select fabrication capabilities.
STRL Stock’s Price Performance & Valuation TrendShares of this Texas-based infrastructure services provider have gained 139.3% year to date, outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 37.33, as shown in the chart below.
Image Source: Zacks Investment Research
Earnings Estimate Revision of STRLSTRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $17.77 and $22.43 per share, respectively. The revised estimates for 2026 and 2027 imply year-over-year growth of 63.3% and 26.2%, respectively.
Image Source: Zacks Investment Research
Sterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The recommendations of Wall Street analysts are often relied on by investors when deciding whether to buy, sell, or hold a stock. Media reports about these brokerage-firm-employed (or sell-side) analysts changing their ratings often affect a stock's price. Do they really matter, though?
Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Sterling Infrastructure (STRL - Free Report) .
Sterling Infrastructure currently has an average brokerage recommendation (ABR) of 1.29, on a scale of 1 to 5 (Strong Buy to Strong Sell), calculated based on the actual recommendations (Buy, Hold, Sell, etc.) made by seven brokerage firms. An ABR of 1.29 approximates between Strong Buy and Buy.
Of the seven recommendations that derive the current ABR, six are Strong Buy, representing 85.7% of all recommendations.
Brokerage Recommendation Trends for STRL
Check price target & stock forecast for Sterling Infrastructure here>>>
The ABR suggests buying Sterling Infrastructure, but making an investment decision solely on the basis of this information might not be a good idea. According to several studies, brokerage recommendations have little to no success guiding investors to choose stocks with the most potential for price appreciation.
Do you wonder why? As a result of the vested interest of brokerage firms in a stock they cover, their analysts tend to rate it with a strong positive bias. According to our research, brokerage firms assign five "Strong Buy" recommendations for every "Strong Sell" recommendation.
This means that the interests of these institutions are not always aligned with those of retail investors, giving little insight into the direction of a stock's future price movement. It would therefore be best to use this information to validate your own analysis or a tool that has proven to be highly effective at predicting stock price movements.
Zacks Rank, our proprietary stock rating tool with an impressive externally audited track record, categorizes stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), and is an effective indicator of a stock's price performance in the near future. Therefore, using the ABR to validate the Zacks Rank could be an efficient way of making a profitable investment decision.
ABR Should Not Be Confused With Zacks RankIn spite of the fact that Zacks Rank and ABR both appear on a scale from 1 to 5, they are two completely different measures.
Broker recommendations are the sole basis for calculating the ABR, which is typically displayed in decimals (such as 1.28). The Zacks Rank, on the other hand, is a quantitative model designed to harness the power of earnings estimate revisions. It is displayed in whole numbers -- 1 to 5.
It has been and continues to be the case that analysts employed by brokerage firms are overly optimistic with their recommendations. Because of their employers' vested interests, these analysts issue more favorable ratings than their research would support, misguiding investors far more often than helping them.
On the other hand, earnings estimate revisions are at the core of the Zacks Rank. And empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
Furthermore, the different grades of the Zacks Rank are applied proportionately across all stocks for which brokerage analysts provide earnings estimates for the current year. In other words, at all times, this tool maintains a balance among the five ranks it assigns.
Another key difference between the ABR and Zacks Rank is freshness. The ABR is not necessarily up-to-date when you look at it. But, since brokerage analysts keep revising their earnings estimates to account for a company's changing business trends, and their actions get reflected in the Zacks Rank quickly enough, it is always timely in indicating future price movements.
Should You Invest in STRL?Looking at the earnings estimate revisions for Sterling Infrastructure, the Zacks Consensus Estimate for the current year has increased 39.2% over the past month to $17.77.
Analysts' growing optimism over the company's earnings prospects, as indicated by strong agreement among them in revising EPS estimates higher, could be a legitimate reason for the stock to soar in the near term.
The size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, has resulted in a Zacks Rank #1 (Strong Buy) for Sterling Infrastructure. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Therefore, the Buy-equivalent ABR for Sterling Infrastructure may serve as a useful guide for investors.
Growth stocks are attractive to many investors, as above-average financial growth helps these stocks easily grab the market's attention and produce exceptional returns. But finding a growth stock that can live up to its true potential can be a tough task.
By their very nature, these stocks carry above-average risk and volatility. Moreover, if a company's growth story is over or nearing its end, betting on it could lead to significant loss.
However, it's pretty easy to find cutting-edge growth stocks with the help of the Zacks Growth Style Score (part of the Zacks Style Scores system), which looks beyond the traditional growth attributes to analyze a company's real growth prospects.
Our proprietary system currently recommends Sterling Infrastructure (STRL - Free Report) as one such stock. This company not only has a favorable Growth Score, but also carries a top Zacks Rank.
Research shows that stocks carrying the best growth features consistently beat the market. And returns are even better for stocks that possess the combination of a Growth Score of A or B and a Zacks Rank #1 (Strong Buy) or 2 (Buy).
While there are numerous reasons why the stock of this civil construction company is a great growth pick right now, we have highlighted three of the most important factors below:
Earnings GrowthArguably nothing is more important than earnings growth, as surging profit levels is what most investors are after. And for growth investors, double-digit earnings growth is definitely preferable, and often an indication of strong prospects (and stock price gains) for the company under consideration.
While the historical EPS growth rate for Sterling Infrastructure is 45.9%, investors should actually focus on the projected growth. The company's EPS is expected to grow 63.3% this year, crushing the industry average, which calls for EPS growth of 13.4%.
Cash Flow GrowthWhile cash is the lifeblood of any business, higher-than-average cash flow growth is more important and beneficial for growth-oriented companies than for mature companies. That's because, growth in cash flow enables these companies to expand their businesses without depending on expensive outside funds.
Right now, year-over-year cash flow growth for Sterling Infrastructure is 52.5%, which is higher than many of its peers. In fact, the rate compares to the industry average of -3.7%.
While investors should actually consider the current cash flow growth, it's worth taking a look at the historical rate too for putting the current reading into proper perspective. The company's annualized cash flow growth rate has been 38% over the past 3-5 years versus the industry average of 11.4%.
Promising Earnings Estimate RevisionsBeyond the metrics outlined above, investors should consider the trend in earnings estimate revisions. A positive trend is a plus here. Empirical research shows that there is a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
The current-year earnings estimates for Sterling Infrastructure have been revising upward. The Zacks Consensus Estimate for the current year has surged 39.2% over the past month.
Bottom LineSterling Infrastructure has not only earned a Growth Score of B based on a number of factors, including the ones discussed above, but it also carries a Zacks Rank #1 because of the positive earnings estimate revisions.
You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
This combination positions Sterling Infrastructure well for outperformance, so growth investors may want to bet on it.
Key Takeaways STRL posted Q1 2026 adjusted EPS of $3.59 compared with $1.63, with revenue up 92% to $825.7M.Sterling's E-Infrastructure Solutions revenue rose 174% on data centers, CEC acquisition & expanding margins.STRL's signed backlog hit $3.8B; combined backlog $5.15B, with nearly $6.5B of potential work in view. Sterling Infrastructure (STRL - Free Report) delivered one of the strongest quarters in its history, and its 120% year-over-year adjusted EPS growth is a key reason investors are paying close attention. In the first quarter of 2026, adjusted earnings per share (EPS) surged to $3.59 from $1.63 a year earlier, while revenue jumped 92% to $825.7 million. Adjusted EBITDA also climbed 107%, highlighting broad-based strength across the business.
The significance of Sterling’s EPS growth goes beyond a single quarter. It reflects the company’s ability to convert strong demand into profitable growth. The E-Infrastructure Solutions segment, which serves data centers, semiconductor facilities and other mission-critical projects, remained the primary growth engine. Segment revenue soared 174%, supported by robust data center activity, contributions from the CEC acquisition and expanding margins.
Importantly, Sterling’s earnings growth is supported by a strong pipeline of future work. Signed backlog reached a record $3.8 billion, while combined backlog rose to $5.15 billion. Including future phase opportunities, management now sees visibility into nearly $6.5 billion of potential work. The company recently secured the first phase of a large semiconductor fabrication campus and continues to benefit from accelerating AI-driven data center construction.
Management’s confidence is evident in its raised 2026 outlook. Sterling now expects adjusted EPS in the range of $18.40-$19.05, representing roughly 72% growth over 2025 levels. With expanding margins, record backlog and strong demand across mission-critical infrastructure markets, Sterling’s triple-digit EPS growth underscores the company’s growing earnings power and long-term investment appeal.
How Do Sterling's Growth Trends Compare With Its Peers?Among infrastructure and engineering companies benefiting from the AI and mission-critical construction boom, EMCOR Group (EME - Free Report) and Comfort Systems USA (FIX - Free Report) are two notable peers. However, Sterling’s recent earnings momentum has been particularly impressive.
EMCOR continues to benefit from strong demand for electrical and mechanical construction services tied to data centers, manufacturing facilities and healthcare projects. EMCOR has consistently delivered solid earnings growth through strong execution and a growing backlog. Nevertheless, EMCOR's growth profile remains more diversified and mature, making its earnings expansion generally less explosive than Sterling’s recent triple-digit EPS increase. As AI infrastructure spending accelerates, EMCOR remains well-positioned, but Sterling is currently growing at a faster rate.
Comfort Systems has also emerged as a major beneficiary of data center, semiconductor and advanced manufacturing investments. Comfort Systems has posted impressive revenue and profit growth in recent quarters, supported by a robust project pipeline and expanding margins. Like Sterling, Comfort Systems is capitalizing on mission-critical infrastructure demand. However, Comfort Systems' business mix is more focused on mechanical and HVAC systems, whereas Sterling combines site development, electrical services and transportation infrastructure.
Both EMCOR and Comfort Systems remain strong long-term infrastructure plays. Yet Sterling’s 120% adjusted EPS growth, record backlog and expanding exposure to AI-driven projects suggest it is currently among the fastest-growing beneficiaries of the infrastructure investment cycle.
STRL Stock’s Price Performance & Valuation TrendShares of this Texas-based infrastructure services provider have gained 181.1% year to date, outperforming the Zacks Engineering - R and D Services industry, the broader Zacks Construction sector and the S&P 500 Index.
STRL Price Performance (YTD)
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 43.68, as shown in the chart below.
STRL Valuation (P/E F12M)
Image Source: Zacks Investment Research
Earnings Estimate Revision of STRLSTRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $17.77 and $22.43 per share, respectively. The revised estimates for 2026 and 2027 imply year-over-year growth of 63.3% and 26.2%, respectively.
Image Source: Zacks Investment Research
Sterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Sterling's combined backlog rose 131% to $5.2B as of Q1 2026, with visibility approaching $6.5B.E-Infrastructure Solutions generated 72% of Q1 revenue as mission-critical projects fueled growth.CEC acquisition added scale, backlog gains and supports margin expansion through integrated delivery. Sterling Infrastructure, Inc. (STRL - Free Report) is in a cycle where visibility matters as much as velocity. The company is converting mission-critical demand into a deeper backlog, while expanding scope through integrated site and electrical delivery. That combination is showing up in results, guidance and a shifting margin profile.
With a Zacks Rank #1 (Strong Buy), Sterling is positioned around multi-year capital spending in data centers, advanced manufacturing, and semiconductors. You can see the complete list of today’s Zacks #1 Rank stocks here.
STRL’s Mission-Critical Backlog Is Driving VisibilitySterling exited the first quarter of 2026 with signed backlog up 78% year over year to $3.8 billion. Combined backlog climbed 131% to $5.2 billion. Beyond signed awards, management highlighted “future phases” that lift total visibility toward nearly $6.5 billion. More than 90% of the signed E-Infrastructure segment’s backlog is tied to mission-critical work, including data centers, large manufacturing and semiconductors. Management also reiterated that data center demand is expected to continue for the foreseeable future.
This depth aligns Sterling with customers executing multi-year capital plans. It supports steadier revenue conversion and pricing discipline beyond 2026, particularly as large projects move through phased execution into 2027.
Sterling’s Integrated Model is Scaling Faster Than PlannedSterling’s combined offering of site development and mission-critical electrical services is gaining traction ahead of schedule. In the first quarter of 2026, management said two data center campuses moved to integrated execution six-eight months earlier than planned.
Pulling integration forward can change outcomes. It validates cross-sell traction and supports schedule compression, which can improve execution certainty on time-sensitive projects. That also tends to support better win rates as customers prioritize delivery confidence and fewer handoffs.
Sterling is also investing in tools and processes that reinforce this model. Management cited Artificial Intelligence tools that increased project manager capacity by about 15%, and a modular manufacturing program expected to triple capacity within roughly 18 months. These initiatives are designed to reduce field labor intensity and improve quality and efficiency.
Sterling’s Segment Mix Shows Where Momentum Is ConcentratedMomentum is concentrated in the E-Infrastructure Solutions segment, which represented 72% of first-quarter 2026 revenue. Segment revenues jumped to $597.7 million from $218.3 million a year ago, and adjusted operating income rose to $140.3 million from $50.6 million as mission-critical mix and execution improved profitability.
Transportation Solutions segment showed steady progress in the first quarter of 2026. Revenues increased to $132.9 million from $120.7 million, and operating income rose to $17.1 million from $13.6 million, supported by strength in the Rocky Mountain market and a strategic shift toward higher-margin projects.
However, the Building Solutions segment remained a headwind during the first quarter of 2026. Revenues edged up to $95.1 million, but operating margin fell to 6.5% from 13.4% amid affordability pressure that management expects to persist through 2026. That mix dynamic matters for consolidated momentum, making E-Infrastructure’s growth and margin trajectory the key swing factor. In the broader group, Quanta Services, Inc. (PWR - Free Report) , which flaunts a Zacks Rank of 1 and MasTec, Inc. (MTZ - Free Report) , which holds a Zacks Rank #3 (Hold), reinforce how investors are rewarding scaled infrastructure platforms with clearer execution paths.
STRL’s Q1 Beat Shows Operating Leverage in ActionFirst-quarter 2026 results underscored how operating leverage is emerging in the model. Adjusted earnings were $3.59 per share, up 56.8% from the Zacks Consensus Estimate of $2.29. Revenue was up 41.1% to $825.7 million from the $585 million consensus mark, and increased 92% year over year.
Margins improved with the growth. Gross margin expanded to 23.5%, and adjusted EBITDA margin rose to 20.2%. Adjusted EBITDA increased 107% year over year to $166.6 million, reflecting profit growth that outpaced the top line.
E-Infrastructure execution and the added scale from CEC were central drivers, while Transportation also contributed through a higher-margin mix and favorable timing. The quarter supported management’s raised 2026 outlook, including revenue guidance of $3.70 to $3.80 billion and adjusted earnings per share guidance of $18.40 to $19.05.
Sterling’s CEC Wins Add Scale and DurationThe acquisition of CEC Facilities Group on Sep. 1, 2025, broadened the E-Infrastructure platform and added electrical scale. In the first quarter of 2026, the acquired business contributed $156.1 million of revenue, giving Sterling more capacity to pursue larger, integrated opportunities. Since the acquisition, management said CEC secured several large project awards that contributed to a $1.2 billion increase in CEC’s combined backlog. The wins reflect traction in mission-critical electrical services and expand the volume of secured work feeding future revenue.
Duration is becoming a differentiator. Management pointed to an initial phase award for a major semiconductor fabrication campus expected to run through late 2027 or early 2028. That kind of multi-year award improves line of sight and supports the integrated delivery strategy across phases.
STRL’s Margin Levers Extend Beyond a Single QuarterSterling is framing margin expansion as a multi-part, self-help roadmap. For E-Infrastructure, the company is targeting adjusted operating margins in the mid-20% range in 2026, with further improvement expected over time as projects scale in complexity and size.
CEC has its own profitability plan. Management is targeting 300-500 basis points of CEC margin expansion over 12-18 months as lower-margin end markets are exited and joint site plus electrical delivery expands. The goal is to move electrical from a scale driver toward a margin contributor as normalization plays out through 2026 and 2027.
Sterling is also reshaping the Transportation portfolio by winding down Texas low-bid heavy highway work and shifting to higher-margin opportunities, while redeploying assets into E-Infrastructure. Together with modularization and productivity tools, these actions support sustained consolidated margin improvement as the mix tilts toward higher-value work.
Key Takeaways STRL trades at 42.86x forward earnings, above industry, sector and S&P 500 valuation levels.Sterling raised 2026 revenue, adjusted EPS and EBITDA guidance on strong award activity.Mission-critical projects dominate the E-Infrastructure Solutions backlog, supporting future growth. Sterling Infrastructure, Inc. (STRL - Free Report) is up 176.1% year to date, a move that dwarfs the Zacks sub-industry’s 37.9% growth, the Zacks Construction sector’s 12.2% rise and the S&P 500’s 11.1% advance over the same period.
The key question is whether the fundamentals have improved enough to justify chasing the run. Sterling’s operational profile has shifted as mission-critical E-Infrastructure scales and the CEC Facilities Group acquisition adds electrical capacity, backlog and revenues.
STRL Has Rallied Hard, but Fundamentals Also Re-RatedThe stock’s surge is not just a multiple story. Sterling is benefiting from multi-year visibility as mission-critical activity in data centers, advanced manufacturing and semiconductors drives a deeper, higher-margin backlog. In the first quarter of 2026, signed backlog rose 78% year over year to $3.8 billion and combined backlog increased 131% to $5.2 billion, with total visibility approaching nearly $6.5 billion after adding future phases.
The company also broadened its E-Infrastructure platform through the Sep. 1, 2025, acquisition of CEC Facilities Group. In the first quarter of 2026, CEC contributed $156.1 million of revenues, helping power outsized E-Infrastructure growth and reinforcing Sterling’s ability to take on larger, time-sensitive work.
Sterling’s Raised 2026 Guidance is the Core Bull CaseManagement’s revised 2026 outlook is the clearest signal that momentum is not limited to one quarter. Sterling raised 2026 revenue guidance to $3.70-$3.80 billion, up from its prior $3.05-$3.20 billion range. Adjusted earnings per share are now expected at $18.40-$19.05, up from the prior outlook of $13.45-$14.05. Management also raised adjusted EBITDA guidance to $843-$873 million from $626-$659 million.
The raise is tied to strong award activity and improved visibility from backlog and awards. Sterling also cited a growing pipeline of high-probability future phases that exceeds $1.3 billion, supporting line of sight as signed work converts.
STRL’s Valuation Now Assumes Continued ExecutionThe valuation case is straightforward: investors are paying up for a company that is executing at a higher level, but the bar is now higher. Sterling trades at 42.86 times forward 12-month earnings compared with 31.99 times for the Zacks sub-industry, 21.47 times for the Zacks sector, and 22.26 times for the S&P 500 Index. Moreover, the price target framework implies further upside but also embeds expectations. The $973 target reflects 49.34 times forward 12-month earnings.
At these multiples, investors must believe Sterling can sustain a higher-margin mix, maintain delivery discipline and keep converting mission-critical demand into revenue. Backlog quality supports that view, with more than 90% of signed E-Infrastructure backlog tied to mission-critical work, and management expecting data center demand to continue for the foreseeable future.
Sterling’s Short-Term Signal and Style ProfileFor near-term investors, Sterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Style Scores help explain the tradeoff. Sterling currently has a Growth Score of B and a Momentum Score of C, alongside a Value Score of F and a VGM Score of D. This combination typically fits a stock where growth expectations are strong, but value characteristics are weaker at the current price. In practical terms, the market is rewarding the growth narrative and execution, while leaving less room for disappointment if project timing or margins wobble.
STRL’s Balance Sheet Adds Flexibility, Not Leverage RiskSterling’s liquidity profile supports continued investment without leaning on leverage. As of the first quarter of 2026, the company held $512 million of cash against $287 million of debt, with an undrawn $150 million revolver, leaving it in a net cash posture.
That flexibility matters because Sterling is scaling capacity and integrating CEC. Management expects continued strength in operating cash flow in 2026 while keeping capital expenditures at $100-$110 million. The balance sheet also supports capital returns. Sterling has $362 million of share repurchase authorization remaining and bought back $12.3 million of stock in the first quarter at an average price of $305.14 per share.
Sterling’s Key Risks to Watch Before Chasing the RunThe biggest risk is mixed drag from residential exposure. Sterling expects affordability headwinds in residential to persist through 2026, with Building Solutions revenues modestly down for the year and margins in the low double digits. In the first quarter of 2026, Building Solutions’ operating margin declined to 6.5% from 13.4%.
A second risk is near-term dilution and execution strain as electrical capacity ramps. Tight labor availability can constrain the pace of integrated site and electrical delivery, creating quarterly variability and pressure on schedule adherence as larger integrated awards increase complexity.
Finally, project timing and seasonality can swing results. First and fourth quarters are historically Sterling’s lowest, and the growing mix of large, multi-year projects means phasing and start dates can materially influence quarterly burn. Delays in data center or semiconductor schedules would have an outsized impact on near-term revenue recognition and margins.
For investors looking across the broader infrastructure space, EMCOR Group, Inc. (EME - Free Report) , which carries a Zacks Rank #2 (Buy) and AECOM (ACM - Free Report) , which carries a Zacks Rank #3 (Hold), offer useful reference points for how the market is pricing execution-driven growth.
Key Takeaways Sterling's signed backlog rose 78% to $3.8B, while combined backlog reached $5.2B.STRL's integrated site and electrical services model secured earlier-than-expected data center awards.A mega-fab project extending into 2027-2028 adds long-term revenue visibility for Sterling. Sterling Infrastructure, Inc. (STRL - Free Report) has become a direct way to play the next leg of mission-critical construction. Management is leaning into structurally expanding end markets, with demand tied to large-scale data centers, semiconductor fabs and advanced manufacturing.
Momentum is already visible in the numbers. In the first quarter of 2026, signed backlog climbed 78% year over year to $3.8 billion, while combined backlog increased 131% to $5.2 billion, with total visibility approaching nearly $6.5 billion after adding future phases.
With a Zacks Rank #1 (Strong Buy), the setup is compelling for investors focused on near-term estimate momentum and durable multiyear demand signals. You can see the complete list of today’s Zacks #1 Rank stocks here.
STRL is Leveraged to Mission-Critical Construction CyclesSterling’s growth engine is increasingly concentrated in E-Infrastructure Solutions, which contributed 59% of total revenues in 2025 and serve data centers, semiconductor fabs, large manufacturing and related power-intensive builds.
What makes this cycle different is the duration. Customers are executing multiyear capital plans, and more than 90% of signed E-Infrastructure backlog is tied to mission-critical work. Management has reiterated that data center demand is expected to continue for the foreseeable future, supporting revenue conversion and pricing discipline beyond 2026.
That’s a useful context frame when comparing peers exposed to infrastructure buildouts such as Quanta Services, Inc. (PWR - Free Report) and EMCOR Group, Inc. (EME - Free Report) , which also operate in complex, labor-constrained project environments where schedule certainty can drive win rates and margin outcomes.
Sterling’s Integrated Site and Electrical Model Is the DifferentiatorThis buildout cycle is rewarding contractors who can reduce handoffs and compress schedules. Sterling’s integrated offering, combining site development with mission-critical electrical capabilities, is scaling faster than expected and is showing up in improving win rates and better execution certainty. A key proof point came in the first quarter of 2026, when two data center campuses moved to integrated execution six-eight months earlier than planned. Management tied the shift to cross-sell traction and schedule compression benefits, which matter in time-sensitive customer environments where delays can cascade into commissioning timelines.
Integration also supports backlog quality. With disciplined bid selection and expanding scope, Sterling can capture a larger share of wallet on the same campus, improving the mix toward higher-value work and reinforcing its targeted margin trajectory over time.
STRL’s Mega-Fab Award Extends the Timeline Into 2027-2028Sterling’s visibility is not only deep but also extensive. Management highlighted a first-phase award for a mega-fab campus that is expected to run through late 2027 or early 2028, adding duration and a clearer line of sight beyond the near-term construction cadence.
That duration matters because it smooths the revenue bridge as projects phase in and out. It also reinforces the idea that Sterling’s mission-critical demand is not limited to a single pocket of activity but spans multiple end markets with overlapping build cycles.
The longer-term semiconductor trend adds another tailwind. Management expects the broader U.S. semiconductor wave to accelerate near decade-end, around 2029 to 2030, which supports the argument that fab-related work can remain additive even after the current tranche of awards burns through.
Sterling’s Modularization and AI Tools Aim at ProductivityOperational enablers are a central part of Sterling’s margin story. Management cited AI tools that have already increased project manager capacity by about 15%, a direct productivity lever that can help scale execution without matching overhead growth one-for-one.
Sterling is also investing in modular manufacturing to reduce field labor intensity and improve schedule and quality outcomes. The modular manufacturing program is expected to triple capacity within roughly 18 months under a newly leased facility, with additional U.S. locations planned over a similar timeframe. Those initiatives support the broader profitability roadmap inside E-Infrastructure, where adjusted operating margins are targeted in the mid-20% range for 2026, with further improvement anticipated as projects grow in complexity and scale.
STRL’s Workforce Scaling is Both a Catalyst and a ConstraintSterling is also investing directly in labor capacity. Management has pointed to efforts to expand electrician capacity through apprenticeship programs and acquisitions, aligning workforce buildout with the rising mix of integrated site and electrical delivery. At the same time, tight labor availability is a real constraint. The scale-up period can pressure ramp timing, schedules and margins during 2026, particularly as larger integrated awards increase operational complexity and the company works through inherited, lower-margin electrical work.
This is where execution discipline will be the separator. The combination of modularization, training and bid selectivity is designed to mitigate bottlenecks, but quarterly variability can still emerge when phasing shifts or project starts to move.
Sterling’s “Trend Checklist” for Investors Tracking 2026The first item to watch is backlog conversion: signed backlog levels, combined backlog momentum and the book-to-burn trajectory that signals whether awards are replenishing burn at an attractive rate.
Next is monitor mix and margin progress in the electrical platform. Management targets 300-500 basis points of margin expansion within 12-18 months as lower-margin categories exit and integrated delivery scales, shifting electrical from a scale driver toward a margin contributor.
Finally, it is prudent keep an eye on quarterly volatility risk from project phasing and seasonality. Management notes that the first and fourth quarters are historically the lowest, and Texas low-bid highway work is winding down as resources redeploy toward E-Infrastructure, which can create uneven quarter-to-quarter comparisons even when the multi-year trajectory remains intact.
Vanguard Growth ETF (VUG +1.77%) provides low-cost exposure to large-cap leaders, while iShares Morningstar Small-Cap Growth ETF (ISCG +2.98%) captures a diversified basket of smaller emerging companies with different sector concentrations.
Both funds target growth-oriented companies but operate on opposite ends of the market-capitalization spectrum. While ISCG hunts for high-potential small caps, VUG tracks the established giants of the American economy. This choice depends on whether an investor seeks the stability of mega caps or the volatility of small-cap growth.
Snapshot (cost & size)MetricISCGVUGIssueriSharesVanguardExpense ratio0.06%0.03%1-yr return (as of June 1, 2026)33.30%31.70%Dividend yield0.60%1.80%Beta1.131.22AUM$966.1 million$365.0 billionBeta measures price volatility relative to the S&P 500; beta is calculated from five-year monthly returns. The 1-yr return represents total return over the trailing 12 months. Dividend yield is the trailing-12-month distribution yield.
Cost-conscious investors may find the Vanguard fund more appealing due to its 0.03% expense ratio, which is half that of the iShares fund. Additionally, the Vanguard fund offers a significantly higher dividend yield at 1.80%, compared to 0.60% for ISCG.
Performance & risk comparisonMetricISCGVUGMax drawdown (5 yr)(37.80%)(35.60%)Growth of $1,000 over 5 years (total return)$1,299$2,060
What's insideVanguard Growth ETF concentrates its portfolio on 166 holdings, leaning heavily into technology at 54%, communication services at 17%, and consumer cyclical at 12%. Its largest positions include Nvidia (NVDA +2.30%) at 13.33%, Apple (AAPL +1.39%) at 11.53%, and Microsoft (MSFT 1.75%) at 8.77%. The fund was launched in 2004 and has paid $1.59 per share over the trailing 12 months.
iShares Morningstar Small-Cap Growth ETF provides much broader diversification with 951 holdings and a primary tilt toward industrials at 25%, technology at 21%, and healthcare at 15%. Top holdings include Lumentum Holdings (LITE +4.26%) at 1.97%, Sterling Infrastructure (STRL +8.87%) at 0.85%, and ATI (ATI +8.43%) at 0.76%. Also launched in 2004, this ETF has a trailing-12-month dividend of $0.35 per share.
For more guidance on ETF investing, check out the full guide at this link.
Today's Change
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What this means for investors Large-cap and small-cap growth stocks represent very different bets on the future. Large caps like those in VUG, such as Apple, Nvidia, and Microsoft, are proven, globally dominant businesses with deep resources, established revenue streams, and the scale to weather economic downturns. They don't always grow the fastest, but they rarely disappear. Small-cap growth stocks like those in ISCG are earlier in their journey. They carry more room to multiply in value, but also more risk of stumbling before they get there.
VUG's fee is half of ISCG's, though both are low enough that the difference amounts to just a few dollars annually per $10,000 invested. The real decision is about temperament and time horizon. VUG delivers smoother, more predictable growth driven by companies investors already know. ISCG holds around 1,000 smaller companies where the next breakout business could be hiding, but so could the next disappointment.
For investors building a core long-term portfolio, VUG's stability, massive scale, and proven track record make it the stronger foundation. ISCG works best as a complement for those willing to add small-cap growth exposure alongside an existing large-cap core, accepting more volatility in pursuit of higher long-term upside.
Sara Appino has positions in Apple, Nvidia, and Vanguard Growth ETF. The Motley Fool has positions in and recommends Apple, Lumentum, Microsoft, Nvidia, Sterling Infrastructure, and Vanguard Growth ETF. The Motley Fool has a disclosure policy.
Sterling Infrastructure earns a 'Buy' rating, driven by robust margin expansion, backlog growth, and secular data center tailwinds. STRL's E-infrastructure segment leverages the AI and data center buildout, creating a pricing moat and supporting sustained revenue and margin growth. Q1 2026 results exceeded expectations: revenue rose 92% YoY to $825.7M, net income up 143% to $96M, and backlog reached $3.8B.
When it comes to short-term investing or trading, they say "the trend is your friend." And there's no denying that this is the most profitable strategy. But making sure of the sustainability of a trend to profit from it is easier said than done.
The trend often reverses before exiting the trade, leading to a short-term capital loss for investors. So, for a profitable trade, one should confirm factors such as sound fundamentals, positive earnings estimate revisions, etc. that could keep the momentum in the stock alive.
Investors looking to make a profit from stocks that are currently on the move may find our "Recent Price Strength" screen pretty useful. This predefined screen comes handy in spotting stocks that are on an uptrend backed by strength in their fundamentals, and trading in the upper portion of their 52-week high-low range, which is usually an indicator of bullishness.
There are several stocks that passed through the screen and Sterling Infrastructure (STRL - Free Report) is one of them. Here are the key reasons why this stock is a solid choice for "trend" investing.
A solid price increase over a period of 12 weeks reflects investors' continued willingness to pay more for the potential upside in a stock. STRL is quite a good fit in this regard, gaining 112.8% over this period.
However, it's not enough to look at the price change for around three months, as it doesn't reflect any trend reversal that might have happened in a shorter time frame. It's important for a potential winner to maintain the price trend. A price increase of 8.6% over the past four weeks ensures that the trend is still in place for the stock of this civil construction company.
Moreover, STRL is currently trading at 97.5% of its 52-week High-Low Range, hinting that it can be on the verge of a breakout.
Looking at the fundamentals, the stock currently carries a Zacks Rank #1 (Strong Buy), which means it is in the top 5% of more than the 4,000 stocks that we rank based on trends in earnings estimate revisions and EPS surprises -- the key factors that impact a stock's near-term price movements.
The Zacks Rank stock-rating system, which uses four factors related to earnings estimates to classify stocks into five groups, ranging from Zacks Rank #1 (Strong Buy) to Zacks Rank #5 (Strong Sell), has an impressive externally-audited track record, with Zacks Rank #1 stocks generating an average annual return of +25% since 1988. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>
Another factor that confirms the company's fundamental strength is its Average Broker Recommendation of #1 (Strong Buy). This indicates that the brokerage community is highly optimistic about the stock's near-term price performance.
So, the price trend in STRL may not reverse anytime soon.
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A month has gone by since the last earnings report for Sterling Infrastructure (STRL - Free Report) . Shares have added about 8.6% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Sterling Infrastructure due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the latest earnings report in order to get a better handle on the important catalysts.
Sterling Q1 Earnings & Revenues Beat Estimates, Rise Y/YSterling delivered a strong first quarter of 2026, with adjusted earnings and revenues topping the Zacks Consensus Estimate and rising sharply year over year. Results were powered by outsized growth in E-Infrastructure Solutions, supported by contributions from the CEC acquisition and solid execution on large, time-sensitive mission-critical work. Additionally, the Transportation Solutions segment benefited from strong performance in the Rocky Mountain market and a strategic shift toward higher-margin projects.
Despite record overall performance, the Building Solutions segment remained a headwind. Revenues increased modestly, but adjusted operating income declined sharply year over year due to tough prior-year comparisons and ongoing affordability pressures that continue to weigh on prospective homebuyers.
Inside Sterling’s Q1 HeadlinesAdjusted earnings were $3.59 per share, beating the consensus mark of $2.29 by 56.8%. In the year-ago quarter, the company reported adjusted earnings per share of $1.63.
Revenues of $825.7 million surpassed the consensus estimate of $585 million by 41.1% and increased 92% from $430.9 million in the year-ago quarter. The recently acquired CEC Facilities Group contributed $156.1 million to revenues during the quarter.
Signed backlog ended the quarter at $3.80 billion, while first-quarter book-to-burn ratios were 2.1x for backlog and 3.5x for combined backlog. Beyond signed work, the company pointed to a growing pipeline of high-probability future phases that now exceeds $1.3 billion. Management also highlighted wins tied to large, multi-year projects, including an initial phase award for a major semiconductor fabrication campus.
STRL Posts Record Profitability as Margins ExpandOperating leverage stood out in the quarter as profit growth outpaced the top line. Gross profit rose to $194.3 million from $94.8 million a year ago, and gross profit margin improved to 23.5% from 22%, an expansion of roughly 150 basis points.
Operating income reached $137.8 million compared with $56.1 million in the prior-year quarter. Adjusted EBITDA rose 107% year over year to $166.6 million, and adjusted EBITDA margin improved to 20.2% from 18.6%, up roughly 150 basis points.
Q1 Segmental Discussion of SterlingE-Infrastructure Solutions was the clear catalyst, with segment revenues (which consist of 72% of total revenues) jumping to $597.7 million from $218.3 million in the year-ago quarter. Management attributed the performance to strong execution on large mission-critical projects and the added scale from the recently acquired CEC business. Profitability in the segment also improved meaningfully. Adjusted operating income climbed to $140.3 million from $50.6 million, reflecting the margin profile of mission-critical work and improved mix.
Transportation Solutions posted continued progress, supported by strong activity in the Rocky Mountain market and favorable project timing. Segment revenues (which amounted to 16% of total revenues) increased to $132.9 million from $120.7 million, and operating income rose to $17.1 million from $13.6 million.
Building Solutions remained the softer spot. Revenues edged up to $95.1 million from $92 million, but operating income declined to $8.3 million from $14.2 million, as affordability constraints continued to weigh on end markets and pressured segment margins.
Sterling's Cash Generation Supports Buybacks & LiquidityCash generation remained a notable support for the balance sheet. Net cash provided by operating activities totaled $165.6 million, up from $84.9 million a year ago. Cash and cash equivalents ended March at $511.9 million, up from $390.7 million at the end of 2025. Sterling continued returning capital, repurchasing $12.3 million of stock during the quarter at an average price of $305.14 per share. Long-term debt stood at $272.3 million at quarter-end against $275.9 million at the end of 2025, leaving the company with financial flexibility to fund growth initiatives and shareholder returns.
STRL Raises 2026 Guidance on Strong Award ActivityConfidence translated into higher full-year targets. Sterling raised 2026 revenue guidance to $3.70-$3.80 billion from its prior range of $3.05-$3.20 billion, reflecting sustained momentum and improved visibility from backlog and awards.
On profitability, EPS is now expected to be $16.50-$17.15, while adjusted EPS is projected at $18.40-$19.05, up from the prior adjusted EPS outlook of $13.45-$14.05. The company also lifted EBITDA guidance to $801-$831 million and adjusted EBITDA to $843-$873 million, compared with its earlier adjusted EBITDA forecast of $626-$659 million.
How Have Estimates Been Moving Since Then?It turns out, fresh estimates have trended upward during the past month.
The consensus estimate has shifted 31.94% due to these changes.
VGM ScoresAt this time, Sterling Infrastructure has a nice Growth Score of B, a score with the same score on the momentum front. However, the stock has a grade of F on the value side, putting it in the lowest quintile for value investors.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
OutlookEstimates have been trending upward for the stock, and the magnitude of these revisions looks promising. It comes with little surprise Sterling Infrastructure has a Zacks Rank #1 (Strong Buy). We expect an above average return from the stock in the next few months.
Sterling Infrastructure (STRL - Free Report) is one of the stocks most watched by Zacks.com visitors lately. So, it might be a good idea to review some of the factors that might affect the near-term performance of the stock.
Over the past month, shares of this civil construction company have returned +8%, compared to the Zacks S&P 500 composite's +4.6% change. During this period, the Zacks Engineering - R and D Services industry, which Sterling Infrastructure falls in, has gained 2.6%. The key question now is: What could be the stock's future direction?
While media releases or rumors about a substantial change in a company's business prospects usually make its stock 'trending' and lead to an immediate price change, there are always some fundamental facts that eventually dominate the buy-and-hold decision-making.
Revisions to Earnings EstimatesHere at Zacks, we prioritize appraising the change in the projection of a company's future earnings over anything else. That's because we believe the present value of its future stream of earnings is what determines the fair value for its stock.
We essentially look at how sell-side analysts covering the stock are revising their earnings estimates to reflect the impact of the latest business trends. And if earnings estimates go up for a company, the fair value for its stock goes up. A higher fair value than the current market price drives investors' interest in buying the stock, leading to its price moving higher. This is why empirical research shows a strong correlation between trends in earnings estimate revisions and near-term stock price movements.
For the current quarter, Sterling Infrastructure is expected to post earnings of $4.70 per share, indicating a change of +74.7% from the year-ago quarter. The Zacks Consensus Estimate has changed +31.9% over the last 30 days.
For the current fiscal year, the consensus earnings estimate of $17.95 points to a change of +65% from the prior year. Over the last 30 days, this estimate has changed +0.4%.
For the next fiscal year, the consensus earnings estimate of $23.07 indicates a change of +28.5% from what Sterling Infrastructure is expected to report a year ago. Over the past month, the estimate has changed +44.4%.
Having a strong externally audited track record, our proprietary stock rating tool, the Zacks Rank, offers a more conclusive picture of a stock's price direction in the near term, since it effectively harnesses the power of earnings estimate revisions. Due to the size of the recent change in the consensus estimate, along with three other factors related to earnings estimates, Sterling Infrastructure is rated Zacks Rank #1 (Strong Buy).
The chart below shows the evolution of the company's forward 12-month consensus EPS estimate:
12 Month EPS
Projected Revenue GrowthEven though a company's earnings growth is arguably the best indicator of its financial health, nothing much happens if it cannot raise its revenues. It's almost impossible for a company to grow its earnings without growing its revenue for long periods. Therefore, knowing a company's potential revenue growth is crucial.
For Sterling Infrastructure, the consensus sales estimate for the current quarter of $942.18 million indicates a year-over-year change of +53.3%. For the current and next fiscal years, $3.69 billion and $4.39 billion estimates indicate +48% and +19% changes, respectively.
Last Reported Results and Surprise HistorySterling Infrastructure reported revenues of $825.67 million in the last reported quarter, representing a year-over-year change of +91.6%. EPS of $3.59 for the same period compares with $1.63 a year ago.
Compared to the Zacks Consensus Estimate of $585.36 million, the reported revenues represent a surprise of +41.05%. The EPS surprise was +56.77%.
The company beat consensus EPS estimates in each of the trailing four quarters. The company topped consensus revenue estimates each time over this period.
ValuationWithout considering a stock's valuation, no investment decision can be efficient. In predicting a stock's future price performance, it's crucial to determine whether its current price correctly reflects the intrinsic value of the underlying business and the company's growth prospects.
Comparing the current value of a company's valuation multiples, such as its price-to-earnings (P/E), price-to-sales (P/S), and price-to-cash flow (P/CF), to its own historical values helps ascertain whether its stock is fairly valued, overvalued, or undervalued, whereas comparing the company relative to its peers on these parameters gives a good sense of how reasonable its stock price is.
As part of the Zacks Style Scores system, the Zacks Value Style Score (which evaluates both traditional and unconventional valuation metrics) organizes stocks into five groups ranging from A to F (A is better than B; B is better than C; and so on), making it helpful in identifying whether a stock is overvalued, rightly valued, or temporarily undervalued.
Sterling Infrastructure is graded F on this front, indicating that it is trading at a premium to its peers. Click here to see the values of some of the valuation metrics that have driven this grade.
Bottom LineThe facts discussed here and much other information on Zacks.com might help determine whether or not it's worthwhile paying attention to the market buzz about Sterling Infrastructure. However, its Zacks Rank #1 does suggest that it may outperform the broader market in the near term.
Sterling Infrastructure has transformed into an E-Infrastructure leader, capitalizing on AI-driven data center and semiconductor facility demand. In Q1 2026, STRL posted 92% YoY revenue growth to $825.7M, with E-Infrastructure contributing 60% of FY25 revenue and driving record backlogs. STRL trades at a significant premium (75.56x P/E TTM), justified by triple-digit E-Infrastructure growth, expanding backlogs, and a forward PEG of 1.35x.
Key Takeaways STRL won a $500M first phase of a multi-year semiconductor fab campus via a JV.Sterling expects phase one to wrap in late 2027 or early 2028, with decades of follow-on work.STRL's E-Infrastructure revenue jumped 174% YoY, with mission-critical work topping 90% of backlog. Sterling Infrastructure (STRL - Free Report) is increasingly positioning itself to benefit from America’s growing semiconductor manufacturing investment wave. While the company has built its recent success around data-center infrastructure, management now sees semiconductor fabrication facilities as a significant long-term growth opportunity that could complement its already fast-growing E-Infrastructure business.
The most notable development came in the first quarter of 2026, when Sterling secured the initial phase of site-development work for a large multi-year semiconductor fabrication campus. Management disclosed that the first phase exceeds $500 million and will be executed through a joint venture, with completion expected in late 2027 or early 2028. Importantly, the broader campus is expected to be developed over multiple decades, creating opportunities for additional work well beyond the initial phase.
Sterling believes its expertise in large-scale site development, gained through years of executing complex data-center projects, provides a competitive advantage in semiconductor facilities. During the earnings call, management highlighted that the company’s capabilities differentiated it from competitors and helped secure what it described as one of the largest semiconductor fabrication projects currently planned in the United States.
The opportunity arrives as Sterling’s E-Infrastructure segment continues to accelerate. First-quarter E-Infrastructure revenues surged 174% year over year, while mission-critical projects, including data centers, manufacturing facilities and semiconductor projects, represented more than 90% of segment backlog.
Management believes broader semiconductor-fab activity in the United States could accelerate toward the end of the decade, potentially opening a new avenue of growth alongside data centers. Combined with a record backlog, expanding future-phase opportunities and raised 2026 guidance, Sterling’s early semiconductor success could become an important long-term growth engine for the company.
How Sterling Compares With Key Infrastructure RivalsSterling operates in highly attractive end markets such as data centers, advanced manufacturing and semiconductor facilities, but it is not alone in pursuing these opportunities. Two notable competitors are EMCOR Group (EME - Free Report) and Quanta Services (PWR - Free Report) .
EMCOR has built a strong position in mission-critical construction and electrical services. The company benefits from rising investments in data centers, industrial facilities and technology infrastructure. Like Sterling, EMCOR is leveraging the growing demand for complex projects that require specialized engineering and construction expertise.
However, EMCOR remains more diversified across mechanical and electrical contracting, whereas Sterling is increasingly emphasizing large-scale site development tied to data centers and semiconductor campuses. As semiconductor investments expand, EMCOR is likely to remain a significant competitor for related infrastructure work. EMCOR’s extensive customer relationships and nationwide footprint further strengthen its competitive position.
Quanta is another major infrastructure player benefiting from long-term capital spending trends. The company has deep expertise in power, utility and industrial infrastructure, areas that are becoming increasingly important as semiconductor fabs and AI-driven data centers require massive power capacity. Quanta is also expanding its exposure to advanced manufacturing projects, placing it in direct competition with Sterling for certain large-scale developments.
While Quanta possesses broader utility and energy capabilities, Sterling’s specialized site-development expertise could help it carve out a differentiated position in the emerging semiconductor construction market. Quanta remains one of the most formidable competitors in this rapidly growing infrastructure space.
STRL Stock’s Price Performance & Valuation TrendShares of this Texas-based infrastructure services provider have gained 188.1% year to date, outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.
STRL Price Performance (YTD)
Image Source: Zacks Investment Research
STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 43.73, as shown in the chart below.
STRL's P/E Ratio (Forward 12-Month) vs. Industry
Image Source: Zacks Investment Research
Earnings Estimate Revision of STRL
STRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $17.95 and $23.07 per share, respectively, as shown below. The revised estimates for 2026 and 2027 imply year-over-year growth of 65% and 28.5%, respectively.
Image Source: Zacks Investment Research
Sterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Acquisition Expands Sterling's E-Infrastructure Site Development Services Into the Pacific Northwest
, /PRNewswire/ -- Sterling Infrastructure, Inc. (NasdaqGS: STRL) ("Sterling" or "the Company") today announced that it has closed on the acquisition of Stone Ridge Contracting, LLC. (Stone Ridge), a Pocatello, Idaho-based site development contractor. Stone Ridge will join Sterling's E-Infrastructure Solutions segment.
Stone Ridge is a leading, non-union contractor delivering heavy civil, concrete, and construction management services across high-growth sectors including data centers, mining, and industrial infrastructure. The transaction strengthens Sterling's E-Infrastructure geographic footprint across the Pacific Northwest and Texas, which have been key focus areas for strategic geographic expansion. The Stone Ridge service area includes Idaho, Oregon, North Dakota, Washington, and Texas.
Stone Ridge is expected to generate full-year 2026 revenue in the range of $180 million to $200 million and EBITDA margins in the mid-teens, consistent with well-run site development contractors of similar scale. Sterling plans to update its full year 2026 financial guidance to reflect the partial year contribution from Stone Ridge at the time of its second quarter 2026 financial report.
The purchase price multiple paid for Stone Ridge is within Sterling's typical range for site development assets. The upfront purchase price consists of a combination of cash and Sterling common stock. Additionally, Stone Ridge has an earn out opportunity, contingent upon meeting certain EBITDA targets on or before December 31, 2031.
Management Commentary
"We are excited to welcome Stone Ridge to the Sterling family. The team at Stone Ridge has built an exceptional company through a relentless focus on customers, operational excellence, and entrepreneurial leadership," stated Joe Cutillo, Sterling's Chief Executive Officer. "Just as important, they share Sterling's culture and long-term approach to creating value. We are pleased that the leadership team will remain in place following the transaction to guide the business through its next chapter of growth."
"This acquisition strengthens our ability to serve existing customers across a broader geographic footprint while also adding new, attractive end markets and customer relationships," continued Mr. Cutillo. "Further, we believe that by leveraging Sterling's broad platform and financial resources, there is a compelling opportunity to accelerate growth and drive margin expansion at Stone Ridge. We look forward to building on the strong foundation already in place and capitalizing on the significant opportunities ahead."
About Sterling
Sterling Infrastructure, Inc., ("Sterling," "the Company," "we," "our" or "us") operates through a variety of subsidiaries within three segments specializing in E-Infrastructure, Transportation and Building Solutions in the United States, primarily across the Southern, Northeastern, Mid-Atlantic and Rocky Mountain regions and the Pacific Islands. E-Infrastructure Solutions provides advanced, large-scale site development services and mission-critical electrical services for data centers, semiconductor fabrication, manufacturing, distribution centers, warehousing, power generation and more. Transportation Solutions includes infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail and storm drainage systems. Building Solutions includes residential and commercial concrete foundations for single-family and multi-family homes, parking structures, elevated slabs, other concrete work, plumbing services, and surveys for new single-family residential builds. From strategy to operations, we are committed to sustainability by operating responsibly to safeguard and improve society's quality of life. Caring for our people and our communities, our customers and our investors – that is The Sterling Way.
Joe Cutillo, CEO, "We build and service the infrastructure that enables our economy to run,
our people to move and our country to grow."
Company Contact:
Sterling Infrastructure, Inc.
Noelle Dilts, VP of Investor Relations and Corporate Strategy
281-214-0795
[email protected]
Key Takeaways Sterling's backlog reached $5.15B, with over 90% of E-Infrastructure work tied to mission-critical projects.Raised 2026 view reflects strong demand from AI data centers, semiconductors and advanced manufacturing.STRL trades at a premium valuation, with a forward 12-month P/E ratio of 44.16, compared with its peers. Sterling Infrastructure, Inc. (STRL - Free Report) stock surged 191.2% in the year-to-date period, significantly outperforming the Zacks Engineering - R and D Services industry, the broader Zacks Construction sector and the S&P 500 Index.
This Texas-based infrastructure services provider started its 2026 journey with phenomenal financial performance amid favorable market trends, with multi-year demand growth visibility. As mission-critical activity in data centers, advanced manufacturing and semiconductors grows, it is creating numerous project opportunities for the company, stabilizing its market footing and prospects in the upcoming term.
Moreover, STRL’s strategic business efforts, organic or inorganic, alongside its commitment to enhance shareholder value, create a striking impression on investors even during a turbulent global macroeconomic scenario.
Image Source: Zacks Investment Research
Let’s dive deep into understanding the factors backing STRL stock’s prospects in the upcoming period.
AI Infrastructure Boom Drives Backlog ExpansionSterling is riding powerful secular tailwinds from surging investments in AI data centers, semiconductor fabs and advanced manufacturing facilities. The company ended first-quarter 2026 with a record $3.8 billion signed backlog and $5.15 billion combined backlog, representing year-over-year growth of 78% and 131%, respectively. Adding to this strength, STRL’s pipeline of high-probability future phase opportunities now exceeds $1.3 billion, bringing its visible work pool close to $6.5 billion. With more than 90% of E-Infrastructure backlog tied to mission-critical projects, the company enjoys strong demand visibility and is well-positioned to capitalize on the ongoing AI infrastructure buildout.
Besides, STRL’s acquired CEC business has secured several large project awards since then. Management noted these wins contributed to a $1.2 billion increase in CEC’s combined backlog. The awards reflect traction in CEC’s mission-critical electrical services and broaden the volume of secured work feeding future revenues. Notably, a first-phase award for a mega-fab campus, expected to run through late 2027 or early 2028, adds duration and line of sight, while the broader U.S. semiconductor wave is expected to accelerate near decade-end (2029-2030). This depth and duration of demand support sustained revenue conversion and pricing discipline beyond 2026 for Sterling.
Integrated Service Model Strengthens Competitive AdvantageSterling's acquisition of CEC has enhanced its ability to offer integrated site development and mission-critical electrical services under one roof. The company is already executing projects where both capabilities are being delivered together, creating cross-selling opportunities and deeper customer relationships. This strategy improves project coordination, execution efficiency and margin potential while making Sterling a more valuable partner for hyperscale data center and semiconductor customers. The integrated approach also differentiates Sterling from traditional contractors and increases its ability to secure larger, multi-phase infrastructure awards.
Raised 2026 Outlook Reflects Strong Long-Term VisibilityFollowing a record first quarter of 2026, management raised its full-year 2026 guidance, signaling confidence in future demand and execution capabilities. Sterling now expects revenues of $3.7-$3.8 billion and adjusted EPS of $18.40-$19.05, implying approximately 51% revenue growth and 72% earnings growth year over year at the midpoint. Strong bid activity, expanding backlog and increasing exposure to high-growth AI and semiconductor markets provide a solid foundation for sustained expansion. The company's growing presence across mission-critical infrastructure positions it to benefit from multiyear investment cycles and long-term industry growth trends. STRL also lifted adjusted EBITDA to $843-$873 million compared with its earlier adjusted EBITDA forecast of $626-$659 million.
Earnings Growth and Shareholder-Friendly Capital AllocationSterling continues to deliver exceptional profitability and cash generation. First-quarter 2026 adjusted net income jumped 122% year over year, while adjusted EBITDA increased 107%, supported by strong execution and a favorable project mix. Operating cash flow nearly doubled to $166 million, strengthening an already healthy balance sheet with more than $500 million in cash. Alongside investing in growth opportunities, Sterling remains committed to enhancing shareholder value through disciplined capital deployment. The company repurchased $12.3 million of shares during the first quarter, reflecting management's confidence in the business and its long-term earnings potential.
STRL retains $362 million of share repurchase authorization and intends to be opportunistic after the first quarter’s buyback. Management also notes a richer pipeline of high-quality M&A targets compared with a year ago and cites significant balance sheet firepower. This setup supports selective acquisitions, internal capacity adds and buybacks without stressing leverage, helping cushion timing variability as backlog converts.
Earnings Estimate Revision for STRLSTRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $17.95 and $23.07 per share, respectively. The estimated figures for 2026 and 2027 imply year-over-year growth of 65% and 28.5%, respectively.
Image Source: Zacks Investment Research
Is Sterling Winning the Backlog Battle Against Its Peers?Sterling Infrastructure is emerging as a fast-growing beneficiary of the AI infrastructure boom, competing with industry leaders such as EMCOR Group, Inc. (EME - Free Report) , MasTec, Inc. (MTZ - Free Report) and Quanta Services, Inc. (PWR - Free Report) . STRL’s combined backlog surged 131% year over year to $5.15 billion in first-quarter 2026, supported by major data center and semiconductor awards. The company is also gaining traction in AI-related projects through its integrated site-development and electrical-services platform following the CEC acquisition.
EMCOR continues to benefit from mission-critical mechanical and electrical work tied to data centers, while MasTec is leveraging its engineering and construction expertise to secure data center deployment opportunities. Quanta remains the largest player, capitalizing on AI-driven power demand, grid modernization and utility-scale infrastructure projects with a substantially larger backlog and customer base.
Sterling's competitive advantage lies in its faster growth rate, strong backlog momentum and unique ability to combine large-scale site development with mission-critical electrical services. However, Quanta retains a scale advantage, while EMCOR and MasTec possess broader diversification. STRL’s edge is execution and growth; its peers still lead in size and market reach.
STRL Stock Trading at a PremiumSTRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 44.16, as shown in the chart below.
Image Source: Zacks Investment Research
Is It Wise to Invest in STRL Stock Now?As discussed above, Sterling continues to present a compelling long-term growth story supported by powerful secular trends in AI infrastructure, data centers, semiconductor manufacturing and advanced industrial construction. Its competitive position has strengthened considerably following the CEC acquisition, which enables it to offer integrated site development and mission-critical electrical services. A growing pipeline of future opportunities and strong exposure to multiyear AI-related investments provide exceptional revenue visibility through 2027 and beyond.
Financially, STRL remains in excellent shape. Triple-digit growth in adjusted earnings and EBITDA, robust operating cash flow generation, a sizeable cash position and ongoing share repurchases highlight management’s ability to create shareholder value while funding future expansion.
Meanwhile, the valuation remains a concern, as STRL commands a significant premium to peers after its massive 191.2% stock run. While the premium appears justified by its superior growth profile, near-term volatility or profit-taking cannot be ruled out.
Thus, with rising earnings estimates and exceptional backlog momentum, STRL stock, which currently sports a Zacks Rank #1 (Strong Buy), is a strategic buy option for mid and long-term investors. However, investors with shorter investment horizons may consider accumulating shares gradually or waiting for market-driven pullbacks to secure a more attractive entry point. You can see the complete list of today’s Zacks #1 Rank stocks here.
Sterling Infrastructure (STRL - Free Report) closed at $842.39 in the latest trading session, marking a -5.55% move from the prior day. This change lagged the S&P 500's daily loss of 0.26%. Elsewhere, the Dow gained 0.17%, while the tech-heavy Nasdaq lost 0.97%.
The stock of civil construction company has risen by 2.73% in the past month, leading the Construction sector's loss of 2.63% and the S&P 500's gain of 0.23%.
The upcoming earnings release of Sterling Infrastructure will be of great interest to investors. The company is forecasted to report an EPS of $4.7, showcasing a 74.72% upward movement from the corresponding quarter of the prior year. At the same time, our most recent consensus estimate is projecting a revenue of $970.26 million, reflecting a 57.9% rise from the equivalent quarter last year.
For the entire fiscal year, the Zacks Consensus Estimates are projecting earnings of $17.95 per share and a revenue of $3.8 billion, representing changes of +64.98% and +52.48%, respectively, from the prior year.
It is also important to note the recent changes to analyst estimates for Sterling Infrastructure. These recent revisions tend to reflect the evolving nature of short-term business trends. Hence, positive alterations in estimates signify analyst optimism regarding the business and profitability.
Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To take advantage of this, we've established the Zacks Rank, an exclusive model that considers these estimated changes and delivers an operational rating system.
The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Within the past 30 days, our consensus EPS projection has moved 0.09% higher. Sterling Infrastructure is currently sporting a Zacks Rank of #1 (Strong Buy).
Valuation is also important, so investors should note that Sterling Infrastructure has a Forward P/E ratio of 49.68 right now. Its industry sports an average Forward P/E of 33.33, so one might conclude that Sterling Infrastructure is trading at a premium comparatively.
Investors should also note that STRL has a PEG ratio of 3.31 right now. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Engineering - R and D Services industry had an average PEG ratio of 1.92 as trading concluded yesterday.
The Engineering - R and D Services industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 73, positioning it in the top 30% of all 250+ industries.
The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.
Be sure to use Zacks.com to monitor all these stock-influencing metrics, and more, throughout the forthcoming trading sessions.
Key Takeaways Sterling acquired Stone Ridge, expanding its presence across Idaho, Oregon, Washington, Texas and beyond.Stone Ridge is expected to generate $180M-$200M in 2026 revenues with mid-teens EBITDA margins.STRL's acquisition strategy boosts integrated infrastructure capabilities and supports backlog growth. Sterling Infrastructure, Inc. (STRL - Free Report) has expanded its geographic footprint in the Pacific Northwest and Texas by acquiring Stone Ridge Contracting, LLC. The acquired company will be operating under STRL’s E-Infrastructure Solutions segment.
Sterling stock tumbled 5.6% during yesterday’s trading hours and moved further down 2% in the after-hours.
Sterling’s Growth Momentum With Stone Ridge DealStone Ridge is a Pocatello, ID-based heavy civil, concrete and construction management services provider that strengthens STRL’s hold on high-growth markets of Idaho, Oregon, North Dakota, Washington and Texas. The services of Stone Ridge stretch across booming sectors, including data centers, mining and industrial infrastructure.
Notably, in 2026, Stone Ridge is expected to generate revenues between $180 million and $200 million, with EBITDA margins projected to be in the mid-teens. Sterling will be reporting its updated 2026 guidance in the second-quarter 2026 financial reports, highlighting the partial-year contributions from the Stone Ridge acquisition.
The purchase price includes a combination of cash and Sterling common stock, with Stone Ridge having an earn-out opportunity, contingent upon meeting certain EBITDA targets on or before Dec. 31, 2031.
STRL’s Buyout Efforts Bode WellSterling’s acquisition strategy is evolving beyond simple scale expansion and is increasingly becoming a competitive differentiator. The acquisition of CEC has significantly strengthened Sterling’s presence in high-growth, mission-critical markets such as AI-driven data centers, semiconductor fabrication facilities and advanced manufacturing projects. In the first quarter of 2026 alone, CEC contributed $156 million in revenues and nearly $1.9 billion to the combined backlog, accelerating Sterling’s growth trajectory and enhancing earnings visibility.
More importantly, the deal enables STRL to offer integrated site-development and electrical-services solutions, creating cross-selling opportunities and positioning the company as a one-stop partner for complex infrastructure projects. This integrated model is already generating results, with the company executing data center campuses that combine both capabilities.
Moreover, Sterling’s strong balance sheet provides ample flexibility to pursue further strategic acquisitions while continuing to invest in organic growth initiatives. It ended the first quarter of 2026 with $511.9 million in cash and cash equivalents, generated a robust operating cash flow of $165.6 million and maintained a manageable debt profile. This financial strength enables Sterling to fund acquisitions without overleveraging the balance sheet, while also supporting capital expenditures, share repurchases and future expansion opportunities.
STRL Stock’s Price PerformanceShares of this Texas-based infrastructure services provider soared 174.9% year to date, significantly outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.
Image Source: Zacks Investment Research
Besides contributions from its strategic acquisitions, STRL is gaining from multi-year growth visibility for mission-critical activities, alongside its ability to offer integrated site development and mission-critical electrical services under one roof.
Sterling’s Zacks Rank & Other Key PicksSterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Here are some other top-ranked stocks from the same sector.
Comfort Systems USA, Inc. (FIX - Free Report) currently sports a Zacks Rank of 1. Comfort Systems delivered a trailing four-quarter earnings surprise of 39.3%, on average. The stock has surged 96.2% year to date.
The Zacks Consensus Estimate for Comfort Systems’ 2026 sales and earnings per share (EPS) indicates improvements of 30.5% and 49.1%, respectively, from a year ago.
Quanta Services, Inc. (PWR - Free Report) currently sports a Zacks Rank of 1. Quanta delivered a trailing four-quarter earnings surprise of 10.3%, on average. The stock has climbed 63.9% year to date.
The Zacks Consensus Estimate for Quanta’s 2026 sales and EPS implies an increase of 21.5% and 29.7%, respectively, from a year ago.
Dycom Industries, Inc. (DY - Free Report) presently sports a Zacks Rank of 1. It has a trailing four-quarter earnings surprise of 25%, on average. Shares of Dycom have increased 34.3% year to date.
The Zacks Consensus Estimate for Dycom’s fiscal 2027 sales and EPS indicates growth of 34.8% and 30.3%, respectively, from the prior-year levels.
Biocorrx (OTCMKTS:BICX - Get Free Report) and GoodRx (NASDAQ: GDRX - Get Free Report) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, analyst recommendations, earnings, valuation and profitability. Profitability This table compares Biocorrx and GoodRx's net margins,
Nutex Health (NASDAQ: NUTX - Get Free Report) and GoodRx (NASDAQ: GDRX - Get Free Report) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, earnings, dividends, profitability and analyst recommendations. Profitability This table compares Nutex Health and GoodRx's
SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx (Nasdaq: GDRX), the leading platform for prescription savings in the U.S., today announced that it is working with Eli Lilly and Company to expand access to the newly FDA-approved oral GLP-1 medication, Foundayo™ (orforglipron). Eligible self-pay patients can access Foundayo through GoodRx at a starting price of $149 per month, in line with the lowest available discounted cash price at launch. The offering provides transparent pricing and nationwide.
SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx (Nasdaq: GDRX), the leading platform for prescription savings in the U.S., today announced that the new higher dose Wegovy® HD (semaglutide) injection 7.2 mg is now available to eligible self-pay patients on GoodRx at $399 per month. Pricing scales with quantity, with a two-month supply available for $798 and a three-month supply available for $1,197, giving consumers flexibility and clear expectations around cost. For patients, Wegovy HD offers an.
This move comes amid a growing demand for GLP-1 treatments, which reflects GoodRx’s ongoing efforts to simplify access to medications.
GoodRx is a platform for medication savings in the U.S., used by nearly 25 million consumers and over one million healthcare professionals annually.
In March, the U.S. Food and Drug Administration (FDA) approved a higher-dose version of Wegovy, marking an expansion of its treatment portfolio for adults with obesity.
Tiered Pricing Structure Offers FlexibilityPricing scales with quantity, with a two-month supply available for $798 and a three-month supply available for $1,197, giving consumers flexibility and clear expectations around cost.
For patients, Wegovy HD offers an additional FDA-approved step-up option within the Wegovy portfolio, potentially helping eligible patients achieve greater weight-loss benefit without requiring them to switch to a different brand or care pathway.
GoodRx announced that the new Wegovy HD injection is now available to eligible self-pay patients, with pricing options scaling for multiple-month supplies.
Last week, GoodRx revealed that it is expanding access to Eli Lilly and Company's (NYSE:LLY) new oral GLP-1 medication, Foundayo.
GoodRx announced that eligible self-pay consumers can access Foundayo starting at $149 per month.
The company is also expanding access to Zepbound, available to eligible self-pay patients starting at $299 per month at more than 70,000 pharmacies nationwide.
Technical Indicators Show Short-Term StrengthGoodRx’s relative strength index (RSI) is at 56.74, which indicates neutral momentum, suggesting the stock is not currently overbought or oversold.
Additionally, the moving average convergence divergence (MACD) is above its signal line, indicating bullish momentum, which may attract buyers looking for upward movement.
Key Resistance: $2.50 — A level where selling pressure may increase. Key Support: $2 — A level where buying interest may emerge. Analyst Consensus & Recent Actions: The stock carries a Hold rating with an average price target of $3.73. Recent analyst moves include:
Wells Fargo: Overweight (Lowers target to $3.50 on March 4) Citigroup: Buy (Lowers target to $3.50 on March 3) Goldman Sachs: Neutral (Lowers target to $2.50 on March 2) GDRX Stock Price Activity: GoodRx Holdings shares were up 2.69% at $2.29 at the time of publication on Wednesday, according to Benzinga Pro data.
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This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx Holdings, Inc. (Nasdaq: GDRX) (“GoodRx” or the “Company”), the leading platform for prescription savings in the U.S., today announced it will release its first quarter 2026 financial results after U.S. markets close on Wednesday, May 6, 2026. GoodRx management will also hold a conference call and webcast the following morning, Thursday, May 7, 2026 at 5:00 a.m. Pacific Time (8:00 a.m. Eastern Time) to discuss the results and the Company's business o.
Key Takeaways OptimizeRx gains from strong adoption of its AI-enabled DAAP, driving scalable pharma engagement.OPRX faces near-term revenue pressure from cautious pharma spending and a shift away from managed services.GoodRx sees solid prescription volume but struggles with pricing pressure and softer telehealth growth. OptimizeRx Corporation (OPRX - Free Report) and GoodRx Holdings, Inc. (GDRX - Free Report) operate in the digital health ecosystem, offering technology-driven solutions that connect stakeholders across healthcare and pharmaceuticals. OptimizeRx serves as a partner to life sciences companies through its proprietary communications network and omnichannel platform, enabling targeted, data-driven engagement at the point of care, including its artificial intelligence (AI)-enabled Dynamic Audience Activation Platform (DAAP) for precise provider interactions.
GoodRx focuses on improving prescription access and affordability through its large-scale consumer platform, offering direct-to-consumer programs, integrated savings and a leading app, while expanding into pharma manufacturer solutions and supporting a more transparent and seamless prescription journey.
Let’s evaluate their fundamentals, growth prospects, market challenges and valuations to determine which one presents a stronger investment opportunity.
The Case for OPRXOptimizeRx is gaining from the strong adoption of its AI-enabled DAAP, which is enabling precise and timely engagement for pharmaceutical customers at critical decision points. On the last earnings call, management indicated that validated performance is helping convert initial pilot programs into broader, scaled deployments across multiple brands, particularly in complex therapeutic areas such as oncology, supporting a more repeatable and durable growth trajectory.
Another key growth driver is increasing traction among mid-tier and long-tail life sciences companies, which management identified as a significant expansion opportunity. The platform’s ability to address core customer needs, such as improving workflow efficiency, enhancing engagement and connecting fragmented point-of-care systems, is strengthening its appeal and driving deeper penetration within this segment.
Momentum is also being supported by favorable AI trends, which management noted are not disrupting the business but instead acting as a potential tailwind. As customers achieve efficiencies in areas like content creation, they are expected to reallocate marketing resources toward solutions that expand reach and engagement, benefiting the company’s platform adoption and utilization. Additionally, the company benefits from its established communications network that links pharmaceutical manufacturers with healthcare providers, enabling targeted and measurable engagement.
Image Source: Zacks Investment Research
OptimizeRx is prioritizing margin stability and cash generation over aggressive expansion. It aims to sustain Rule of 40 performance, even in a challenging environment. OptimizeRx reiterated its focus on adjusted EBITDA, guiding $21-$25 million for 2026, higher than the previously estimated $19-$22 million. The company also anticipates a back-half-weighted performance, with stronger momentum expected later in the year as market conditions stabilize and customer spending trends improve.
However, the company is grappling with softness in contracted revenue, primarily due to a shift away from managed services, which had contributed meaningfully in the prior year. OptimizeRx expects 2026 revenues of $109-$114 million compared with the $118-$124 million provided at the end of the third quarter of 2025. Additionally, pharmaceutical clients are adopting a more cautious spending approach in early 2026 as they navigate most favored nation (MFN) pricing dynamics. This has led to shorter contract durations and a temporary pause in marketing spend across both direct-to-consumer and healthcare provider channels. These factors are expected to weigh on near-term growth, particularly in the first half of the year.
The Case for GDRXGoodRx is benefiting from steady growth in its prescription transactions platform, driven by strong consumer engagement and its ability to deliver price transparency and savings at scale. Expanding partnerships with pharmacies and pharmacy benefit managers (PBMs) are supporting consistent prescription volumes and reinforcing its role as a go-to platform for affordable medication access.
The company is also benefiting from momentum in its pharma manufacturer solutions and subscription offerings, as noted in the document, with increasing adoption of its integrated savings programs and direct-to-consumer solutions supporting revenue diversification, while ongoing enhancements to its platform and partnerships are enabling broader reach and improved user experience across its ecosystem.
GoodRx is facing headwinds from variability in prescription transaction revenues, with certain contractual dynamics and retail pharmacy relationships continuing to adversely impact pricing and margins, leading to pressure on revenue consistency despite stable user engagement levels.
GoodRx is also experiencing challenges related to declines in certain segments of its business, including softness in telehealth and subscription growth compared to prior periods, reflecting changing consumer behavior and a more competitive landscape affecting overall performance.
The company is dealing with ongoing margin pressures and investment requirements, with continued spending on technology, marketing and product innovation weighing on profitability, alongside external factors, such as industry pricing dynamics and partner negotiations contributing to uncertainty in near-term financial outcomes.
For 2026, the company expects revenues of $750-$780 million, implying a decline of 2-6% from $796.9 million reported in 2025. Adjusted EBITDA is expected to be at least $230 million, suggesting a 15% decline from the $270.5 million reported in 2025.
Share Performance for OPRX & GDRXIn the past year, OPRX stock has declined 25.9% while GDRX has plunged 50.8%.
Image Source: Zacks Investment Research
Valuation for OPRX & GDRXIn terms of Price/Book, OPRX shares are trading at 0.94X, lower than GDRX’s 1.28X.
Image Source: Zacks Investment Research
How Do Estimates Compare for OPRX & GDRX?Over the past 60 days, analysts have revised their estimates significantly upward for OPRX’s bottom line for the current year.
Image Source: Zacks Investment Research
For GDRX, estimates have been revised significantly downward over the past 60 days.
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OPRX or GDRX: Which Stock is the Better Investment?While OPRX has a Zacks Rank #1 (Strong Buy) at present, GDRX carries a Zacks Rank #4 (Sell). Consequently, in terms of Zacks Rank and valuation, OPRX seems to be a better option at the moment. You can see the complete list of today’s Zacks #1 Rank stocks here.
Key Takeaways Hims & Hers is moving care online with telehealth consults, digital prescriptions and home fulfillment.HIMS partnered with Novo Nordisk to offer FDA-approved GLP-1s in multiple formats at more affordable prices.HIMS added multi-cancer early detection testing and a Labs platform, while expanding into Canada and Europe. Hims & Hers Health, Inc. (HIMS - Free Report) is fundamentally built around expanding access to healthcare by shifting traditionally fragmented, in-person experiences into a more seamless digital model. Its platform connects consumers to licensed providers, enabling telehealth consultations, digital prescriptions and online fulfillment, all designed to make care faster, and more convenient and affordable. By integrating these capabilities, HIMS aims to reduce longstanding barriers such as stigma, cost and limited provider availability, while delivering personalized care across a wide range of conditions.
Recent developments reinforce this access-driven strategy. Hims & Hers has continued to broaden the availability of treatments by partnering with Novo Nordisk to offer FDA-approved GLP-1 medications at more affordable prices and through multiple delivery formats, simplifying access for eligible patients. At the same time, it has expanded proactive care through new offerings such as multi-cancer early detection testing and its Labs platform, both of which are designed to make advanced diagnostics more accessible and actionable for everyday consumers.
Geographic expansion has further extended this mission. Through acquisitions and market entries, Hims & Hers is scaling its digital-first model globally, including in Canada and Europe, with a focus on bringing affordable, personalized care to populations where access has historically been limited. Together, these initiatives reflect a consistent effort to democratize healthcare — making high-quality, personalized care more accessible across conditions, formats and geographies.
Hims & Hers is scheduled to report first-quarter 2026 results on May 11, after the closing bell.
GDRX and TDOC Expanding Digital Healthcare AccessGoodRx Holdings, Inc. (GDRX - Free Report) is advancing digital-first healthcare access by simplifying how consumers find, afford and receive treatments. GDRX has expanded condition-specific subscriptions, including services for hair loss and erectile dysfunction that combine virtual consultations, prescriptions and home delivery into a single streamlined experience, reducing barriers such as cost and inconvenience. At the same time, GoodRx continues to scale affordability through partnerships and pricing innovations. GoodRx enables access to high-cost therapies like GLP-1 treatments with transparent self-pay pricing, while also integrating savings directly at the pharmacy counter through programs like RxSmartSaver.
Teladoc Health, Inc. (TDOC - Free Report) is advancing digital-first healthcare access by delivering comprehensive virtual care across physical and mental health needs through its Integrated Care and BetterHelp platforms. Teladoc Health connects patients, providers and systems to enable 24/7 access to services spanning preventive, primary, chronic and mental healthcare, improving outcomes while lowering costs. Teladoc Health recently enhanced its 24/7 Care service to treat a broader range of conditions, integrate specialist input and streamline referrals, further expanding access and care continuity through its technology-driven ecosystem.
HIMS’ Price Performance, Valuation and EstimatesShares of Hims & Hers have lost 14.1% year to date compared with the industry’s decline of 21.8%.
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HIMS’ forward 12-month P/S of 2.1X is lower than the industry’s average of 3.4X and its five-year median of 2.6X. It has a Value Score of C.
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The Zacks Consensus Estimate for HIMS’ 2026 earnings per share suggests a 5.7% improvement compared with 2025.
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Hims & Hers currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx (Nasdaq: GDRX), the leading platform for prescription savings in the U.S., today announced that it is providing access to self-pay pricing for Novo Nordisk's Ozempic® pill (oral semaglutide), helping eligible patients with type 2 diabetes obtain the medication for as low as $149 per month at pharmacies nationwide. “As Novo Nordisk brings the Ozempic pill to market, we're focused on helping patients access it with clear, transparent pricing,” said We.
SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx Holdings, Inc. (Nasdaq: GDRX) ("we," "us," "our," “GoodRx,” or the “Company”), the leading platform for medication savings in the U.S., has released its financial results for the first quarter of 2026. First Quarter 2026 Highlights Revenue of $194.0 million Net income of $1.2 million; Net income margin of 0.6% Adjusted Net Income1 of $23.0 million; Adjusted Net Income Margin1 of 11.9% Adjusted EBITDA1 of $58.3 million; Adjusted EBITDA Margin1 of 30.
GoodRx Holdings, Inc. (GDRX - Free Report) came out with quarterly earnings of $0.07 per share, in line with the Zacks Consensus Estimate . This compares to earnings of $0.09 per share a year ago. These figures are adjusted for non-recurring items.
This quarterly report represents an earnings surprise of -5.41%. A quarter ago, it was expected that this company would post earnings of $0.09 per share when it actually produced earnings of $0.09, delivering no surprise.
Over the last four quarters, the company has not been able to surpass consensus EPS estimates.
GoodRx, which belongs to the Zacks Medical Services industry, posted revenues of $194.01 million for the quarter ended March 2026, surpassing the Zacks Consensus Estimate by 7.73%. This compares to year-ago revenues of $202.97 million. The company has topped consensus revenue estimates three times over the last four quarters.
The sustainability of the stock's immediate price movement based on the recently-released numbers and future earnings expectations will mostly depend on management's commentary on the earnings call.
GoodRx shares have lost about 5.5% since the beginning of the year versus the S&P 500's gain of 6%.
What's Next for GoodRx?While GoodRx has underperformed the market so far this year, the question that comes to investors' minds is: what's next for the stock?
There are no easy answers to this key question, but one reliable measure that can help investors address this is the company's earnings outlook. Not only does this include current consensus earnings expectations for the coming quarter(s), but also how these expectations have changed lately.
Empirical research shows a strong correlation between near-term stock movements and trends in earnings estimate revisions. Investors can track such revisions by themselves or rely on a tried-and-tested rating tool like the Zacks Rank, which has an impressive track record of harnessing the power of earnings estimate revisions.
Ahead of this earnings release, the estimate revisions trend for GoodRx was mixed. While the magnitude and direction of estimate revisions could change following the company's just-released earnings report, the current status translates into a Zacks Rank #3 (Hold) for the stock. So, the shares are expected to perform in line with the market in the near future. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
It will be interesting to see how estimates for the coming quarters and the current fiscal year change in the days ahead. The current consensus EPS estimate is $0.09 on $189.24 million in revenues for the coming quarter and $0.32 on $762.75 million in revenues for the current fiscal year.
Investors should be mindful of the fact that the outlook for the industry can have a material impact on the performance of the stock as well. In terms of the Zacks Industry Rank, Medical Services is currently in the top 39% of the 250 plus Zacks industries. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
Another stock from the same industry, Co-Diagnostics, Inc. (CODX - Free Report) , has yet to report results for the quarter ended March 2026. The results are expected to be released on May 14.
This company is expected to post quarterly loss of $3.60 per share in its upcoming report, which represents a year-over-year change of +50.1%. The consensus EPS estimate for the quarter has remained unchanged over the last 30 days.
Co-Diagnostics, Inc.'s revenues are expected to be $0.2 million, up 300% from the year-ago quarter.
For the quarter ended March 2026, GoodRx Holdings, Inc. (GDRX - Free Report) reported revenue of $194.01 million, down 4.4% over the same period last year. EPS came in at $0.07, compared to $0.09 in the year-ago quarter.
The reported revenue represents a surprise of +7.73% over the Zacks Consensus Estimate of $180.09 million. With the consensus EPS estimate being $0.07, the EPS surprise was -5.41%.
While investors scrutinize revenue and earnings changes year-over-year and how they compare with Wall Street expectations to determine their next move, some key metrics always offer a more accurate picture of a company's financial health.
As these metrics influence top- and bottom-line performance, comparing them to the year-ago numbers and what analysts estimated helps investors project a stock's price performance more accurately.
Here is how GoodRx performed in the just reported quarter in terms of the metrics most widely monitored and projected by Wall Street analysts:
Monthly Active Consumers: 5 compared to the 5 average estimate based on three analysts.Subscription plans: 717 versus the two-analyst average estimate of 679.Revenue- Prescription transactions: $113.69 million versus $114.73 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a -23.7% change.Revenue- Other: $3.69 million versus the three-analyst average estimate of $3.99 million. The reported number represents a year-over-year change of -15.8%.Revenue- Pharma direct: $52.23 million versus the three-analyst average estimate of $40.07 million. The reported number represents a year-over-year change of +82.3%.Revenue- Subscription: $24.39 million versus $21.68 million estimated by three analysts on average. Compared to the year-ago quarter, this number represents a +16.1% change.View all Key Company Metrics for GoodRx here>>>
Shares of GoodRx have returned +24.9% over the past month versus the Zacks S&P 500 composite's +10.3% change. The stock currently has a Zacks Rank #3 (Hold), indicating that it could perform in line with the broader market in the near term.
Out-of-pocket drug costs are rising for millions of Americans. Coverage gaps are widening. GoodRx is turning both trends into a business.
Pharma Direct, the unit that connects pharmaceutical manufacturers directly to consumers through point-of-sale pricing programs, grew 82% year over year in Q1. The platform now runs more than 125 self-pay programs. GoodRx handled approximately one third of all Wegovy pill transactions in the first two months after launch. Prescription transactions revenue fell 24% year over year.
How GoodRx Became a Drug Access Platform The original GoodRx model was straightforward, allowing consumers to find lower prices on generic drugs at retail pharmacies. That model still runs. But the company has been building a second layer on top of it.
Pharma Direct enables manufacturers to set pricing directly and deliver it to consumers through GoodRx’s extensive retail pharmacy network. When a consumer fills a prescription through one of these programs, the manufacturer’s approved price shows up at the counter. No insurance is required, and no prior authorization is needed. GoodRx handles the infrastructure. The manufacturer owns the program.
“Since the start of the year, we have helped enable access to Ozempic pill, Wegovy HD, Wegovy pill, Zepbound and Zepbound KwikPen,” CEO Wendy Barnes said on the earnings call.
Wegovy pill launched with a cash strategy built around GoodRx from day one. Novo, which manufactures the medication, coordinated supply availability, prescriber education and marketing. GoodRx handled pricing infrastructure and pharmacy access. One third of all Wegovy pill transactions in the first two months post-launch ran through GoodRx.
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Beyond GLP-1s, the company announced a collaboration with Viatris covering 17 brand medications and introduced discounts from Pfizer across more than 30 essential medications spanning women’s health, migraine, arthritis and rare disease. Those programs are available through a dedicated Pfizer-branded storefront on GoodRx.
Branded storefronts are becoming a new outreach surface within Pharma Direct. Rather than listing a single drug price, they let consumers explore a manufacturer’s full portfolio of savings in one place.
GoodRx is using artificial intelligence (AI) to shape how affordability is surfaced and discovered within those storefronts, developing new ways for manufacturers to engage patients based on their context and needs.
Growth and Pressures Subscriptions grew 16% year over year. The number of subscription plans returned to year-over-year growth. GoodRx for Weight Loss is the primary driver, expanding to cover all FDA-approved GLP-1 therapies during the quarter. The Wegovy pill performed particularly well since launching at the start of the year.
The subscription model combines clinical care, transparent self-pay pricing and broad pharmacy access. Barnes said the retail network is a key differentiator. Unlike some competitors, GoodRx does not require consumers to use a specific home delivery provider. Instead, the consumer can choose between retail or home delivery. The company is extending the subscription model into the employer channel through GoodRx Employer Direct.
Prescription transactions revenue, the legacy core of the business, fell 24% year over year. Monthly active consumers were flat sequentially at 5.3 million. CFO Chris McGinnis said the company has direct contracts with nine of its top 10 retail pharmacies nationwide. ISP programs are performing consistent with expectations and volume looks relatively stable.
What Else Stood Out TrumpRx is an emerging channel. GoodRx enables pricing for many of the brands available on the platform. Early data shows strong demand concentrated in GLP-1 therapies. Barnes said the volume appears incremental, reaching new consumers who had not previously used GoodRx. Marketing spend was down year over year in Q1. McGinnis said early subscription momentum came largely from organic traffic to the platform. The company expects to increase marketing spend throughout the rest of the year, directing dollars toward condition-specific subscription offerings. The Surescripts partnership announced roughly five months ago has not produced material results. Management said the two companies are still determining how best to deploy the offering. GoodRx is watching macroeconomic trends closely. McGinnis cited rising uninsured rates, Medicaid eligibility changes and ACA subsidy shifts as factors that could affect the business through 2026 and beyond. Top-Line Results and Outlook Q1 2026 revenue was $194 million. Prescription transactions revenue was $113.7 million, down 24% year over year. Pharma Direct revenue was $52.2 million, up 82% year over year. Subscription revenue was $24.4 million, up 16% year over year.
For the full year, GoodRx now expects revenue of $765 million to $785 million and adjusted EBITDA of at least $235 million. Pharma Direct revenue is expected to grow more than 50% year over year. Subscription revenue is expected to build throughout the year as condition-specific programs continue to scale.
GoodRx Holdings, Inc. faces ongoing revenue and margin pressure as its legacy business declines and Pharma Direct grows but with lower profitability. GDRX's Q1 results showed a 4% Y/Y revenue drop and EBITDA margin compression to 18.5%, with management expecting continued legacy erosion through 2026. Valuation sensitivity is highest to margin assumptions; the base DCF value is $2.49/share, near the current price, with scenario analysis skewed toward downside risk.
You turn 65, sign up for Medicare, and a wall of mail arrives pushing standalone Part D drug plans. The default move for decades has been to pick one and forget it. For 2026, that default deserves a fresh look. The Inflation Reduction Act fully kicks in this year, premiums and surcharges shift, and bundled Medicare Advantage plans now compete aggressively for the same enrollees.
Part D still matters. The late enrollment penalty is permanent and often misunderstood. The real question is which drug coverage path fits, especially if you take a few medications today.
The 2026 numbers that frame the decision Part D national base premium of $36.78 per month — This is the benchmark figure CMS uses to calculate late enrollment penalties and IRMAA surcharges. Actual plan premiums vary by carrier and state, but the base premium drives the math behind every surcharge calculation. Maximum Part D deductible of $590 — Plans can charge less, but no standalone drug plan can require you to pay more than this before cost-sharing kicks in. Many low-premium plans hit this cap, so factor it into total-cost comparisons rather than focusing solely on the monthly premium. New annual out-of-pocket cap on prescriptions of $2,000 — This is the headline change from the Inflation Reduction Act. Once your true out-of-pocket drug spending reaches the cap, you pay nothing more for covered medications for the rest of the year, eliminating the old catastrophic coinsurance phase. IRMAA surcharge range for higher-income retirees of $14.50 to $91.00 per month — Retirees with modified adjusted gross income above the thresholds pay this surcharge on top of their plan premium. Because IRMAA is added regardless of which Part D plan you choose, high earners benefit most from selecting the lowest-premium compliant plan. For a retiree paying around $42 a month in premiums for 25 years, the total outlay reaches roughly $12,600, which can exceed what they ever recoup at the pharmacy counter.
Why did the math change this year? The single biggest shift: the $2,000 annual out-of-pocket cap and the elimination of the catastrophic coinsurance phase. Before this rule, a cancer drug or specialty medication could expose a retiree to five-figure annual costs. Now the worst-case pharmacy bill is capped. Premiums now fund routine cost-sharing on prescriptions you actually fill, with catastrophic risk already capped.
For a retiree on no medications, the expected value of a richer plan drops sharply. For someone on three or four maintenance drugs, the cap is still useful, but the premium gap between the cheapest plan and a mid-tier plan rarely pays off.
The trap on the other side is the late enrollment penalty. Skip Part D for five years and the Social Security Administration adds about $22 a month to your premium for life. That is roughly $264 a year, every year, forever. The penalty math alone is why a placeholder plan beats no plan.
Three reasons to reconsider a standalone plan The cheapest compliant plan often wins. If you take few or no drugs, Part D’s role in 2026 is mainly to avoid the lifetime penalty and give you access to the $2,000 cap if your health changes. Paying for a richer formulary you don’t use is a drag. The lowest-premium plan in your state, paired with GoodRx (NASDAQ: GDRX | GDRX Price Prediction) or Costco (NASDAQ: COST) cash pricing for cheap generics, frequently beats a mid-tier plan on total spend. A Medicare Advantage drug plan (MA-PD) may already include it. If you are weighing Original Medicare plus Medigap plus standalone Part D against an MA-PD bundle, the bundle combines drug coverage into a single premium. The tradeoff is network restrictions and prior authorization. For healthy retirees who value a single bill and lower upfront cost, MA-PD removes the standalone Part D decision entirely. For those who travel often or want any-doctor access, Original Medicare plus standalone Part D still wins. IRMAA surcharges punish high earners twice. A retiree in the top income bands pays the Part B surcharge plus a Part D IRMAA of up to $91 a month, pushing annual Part D cost toward $1,533 in premiums alone before a single prescription is filled. If your modified AGI puts you in IRMAA territory, the cheapest base plan limits the surcharge damage, since IRMAA is added on top regardless of which plan you choose. What to do during open enrollment Evaluate your actual medication list and your projected income two years out, since IRMAA looks back. If you have creditable drug coverage through a former employer or a spouse’s active plan, document it. That coverage defers the penalty clock, and losing it later triggers a special enrollment window without lifetime surcharges.
The common, costly mistake is autopilot. Plans change formularies and premiums every year. Re-shop annually on Medicare.gov’s plan finder using your current drug list. Five minutes of effort routinely saves several hundred dollars, and it is the only way to ensure the cap, the premium, and your prescriptions still line up.
SANTA MONICA, Calif.--(BUSINESS WIRE)--GoodRx (Nasdaq: GDRX), the leading platform for prescription savings in the U.S., today launched GoodRx Companion, a new $14.99-per-month subscription that brings together free and low-cost generic medications, affordable online care visits, and savings on additional healthcare services in one simple program. Built for a healthcare environment where consumers are increasingly shouldering more out-of-pocket costs, even when they have insurance, Companion tu.
