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Investing.com - Texas Capital Securities upgraded Sterling Construction (NASDAQ:STRL) from Hold to Buy and raised its price target to $450.00 from $348.00 following the company’s strong third-quarter 2025 results. The upgrade comes as Sterling’s stock has delivered an impressive 159% return over the past year, with shares currently trading at $392.77, just 1% below its 52-week high.
Sterling Infrastructure reported quarterly results that exceeded both analyst and consensus estimates, driven primarily by robust e-infrastructure revenue growth of 58% year-over-year, which included one month of revenue from the CEC acquisition. InvestingPro data shows Sterling maintains a "GREAT" financial health score of 3.55/5 and holds more cash than debt on its balance sheet, positioning the company for continued growth.
The company’s backlog grew 64% year-over-year to $2.58 billion, and when including unsigned awards and highly probable future phases of work, Sterling’s pipeline exceeds $4 billion.
Texas Capital Securities noted that Sterling’s focus on larger, more complex mission-critical projects is delivering strong growth and margin expansion, while the CEC acquisition has expanded the company’s total addressable market with electrical services that can multiply revenue opportunities per site.
Sterling Infrastructure raised its 2025 guidance across the board, with adjusted EBITDA now expected to be between $486 million and $491 million, prompting Texas Capital Securities to raise its estimates for both 2025 and 2026.
In other recent news, Sterling Infrastructure reported impressive financial results for the second quarter of 2025, exceeding analysts’ expectations. The company achieved an adjusted earnings per share of $2.69, surpassing the projected $2.23, which represents a 20.63% surprise. Revenue also exceeded forecasts, reaching $614.5 million compared to the anticipated $550.55 million, marking an 11.62% increase. Additionally, Sterling Infrastructure announced the retirement of Ronald A. Ballschmiede, its executive vice president. His departure was initially anticipated in 2025, but it has now been confirmed to take effect immediately. No details about his successor or transition plans have been disclosed. These developments reflect Sterling Infrastructure’s current focus on financial performance and leadership changes.
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