Dycom shares retain Overweight rating on growth period

On Friday, KeyBanc Capital Markets reiterated its Overweight rating on shares of Dycom Industries (NYSE:DY), maintaining a price target of $227.00. Currently trading at $169.40, the stock has delivered an impressive 53.61% return over the past year.

The firm's positive stance on the stock is based on the expectation of a multi-year growth period driven by the Broadband Equity, Access, and Deployment (BEAD) program and the burgeoning datacenter segment. According to InvestingPro, analysts maintain a strong buy consensus on the stock.

Earlier this week, KeyBanc analysts visited Dycom's headquarters in South Florida and met with CEO Dan Peyovich and CFO Drew DeFerrari. Following the meetings, the analysts expressed confidence in Dycom's market position and its prospects for sustained growth. This confidence appears well-founded, as InvestingPro data shows the company achieving 10.37% revenue growth and maintaining strong financial health with a 3.12 current ratio.

The company's ability to deliver double-digit top-line growth and margin expansion through operational efficiencies was highlighted as a key factor in its anticipated performance.

Dycom, which provides specialty contracting services, is seen as particularly well-positioned as state awards from the BEAD program are expected to contribute to the company's backlog in 2025 and beyond. The analysts believe that the datacenter opportunity is just beginning and could represent another multi-year growth avenue for the company.

The Overweight rating and price target are supported by a valuation of 10.9 times the firm's forecasted fiscal year 2027 adjusted EBITDA of $714 million. With a current market capitalization of $4.94 billion and a P/E ratio of 22.18, KeyBanc views Dycom as one of the least expensive stocks in its coverage universe.

The firm anticipates that the current cycle could be extended due to the upcoming BEAD rollout and the increase in fiber builds for datacenters. For a deeper understanding of Dycom's valuation metrics and growth potential, investors can access the comprehensive Pro Research Report available on InvestingPro, which includes detailed analysis of the company's financial health and growth prospects.

In other recent news, Dycom Industries has reported significant changes in its executive leadership and board composition, with Daniel S. Peyovich assuming the role of Chief Executive Officer following the retirement of former CEO and Board Chair Steven E. Nielsen.

Richard K. Sykes, a board member since 2018, has succeeded Nielsen as the Chair of the Board. These leadership transitions come as Dycom Industries continues to navigate the competitive landscape of the construction sector.

In terms of financial performance, Dycom Industries reported a robust third quarter in fiscal 2025, with revenues reaching $1.272 billion, a 12% increase from the previous period. The company's organic revenue growth was recorded at 7.6%, and adjusted earnings per share stood at $2.68. Dycom's adjusted EBITDA was reported at $170.7 million, making up 13.4% of the total revenue.

In addition to these financial highlights, Dycom has identified strategic growth opportunities in AI and Data Center Infrastructure, Broadband Expansion, and Rural Broadband. The recent acquisition of Black and Veatch's wireless telecommunications infrastructure business has shown promising initial results.

Looking ahead, Dycom Industries expects Q4 total contract revenues to increase in the mid to high single digits, with organic revenue growth projected at low to mid-single digits. These recent developments underscore Dycom's optimistic outlook for future growth opportunities across various market segments.

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