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On Friday, UBS analyst Steven Fisher reaffirmed a Buy rating for Dycom Industries (NYSE:DY) with a steady price target of $234.00, representing significant upside from the current price of $154.63. Fisher’s endorsement aligns with the broader Wall Street consensus, as InvestingPro data shows analysts maintain a Strong Buy rating on the stock. Fisher’s optimistic outlook on the company’s future anticipates substantial growth over the next few years.
Fisher’s analysis suggests that Dycom is poised for a double-digit compound annual growth rate (CAGR), which may not be fully appreciated by the current market valuation. The company has already demonstrated strong momentum with a 12.61% revenue growth in the last twelve months, and according to InvestingPro analysis, maintains a GOOD financial health score. The consensus among analysts points to a 10% CAGR through fiscal year 2027, but Fisher’s detailed bottom-up analysis indicates that this estimate might be conservative. He predicts that the combination of a roughly 5% CAGR in fiber-to-the-home (FTTH) passings and another 5% from various other sources, such as data centers, wireless, and mergers and acquisitions, could fuel this growth. Notably, this projection doesn’t account for potential gains in market share or price increases in FTTH services.
Looking ahead, Fisher expects Dycom’s fiscal year 2027 sales to outpace fiscal year 2025 by 20%, with adjusted EBITDA for the same period projected to rise by 28%. Despite Dycom currently trading at approximately 8 to 8.5 times next twelve months (NTM) consensus EBITDA, the analyst argues that the company’s robust top-line growth and potential for margin expansion—leading to a 13% EBITDA CAGR from fiscal year 2025 to 2027—justify a valuation exceeding a 10x EV/EBITDA multiple.
Fisher concludes that as Dycom continues to meet these growth expectations, the market will likely recognize the company’s value and adjust its multiple accordingly. This reevaluation could lead to a higher stock price in the future.
In other recent news, Dycom Industries reported its fourth-quarter and full-year fiscal 2025 earnings, which exceeded analysts’ expectations. The company achieved an adjusted diluted EPS of $1.17, surpassing the forecasted $0.93, while its revenue reached $1.085 billion, beating the anticipated $1.02 billion. Dycom’s full-year revenue increased by 12.6% to $4.702 billion, with a robust 13.9% year-over-year growth in the fourth quarter. Despite these strong results, KeyBanc Capital Markets lowered its price target for Dycom from $229.00 to $201.00, maintaining an Overweight rating. The adjustment reflects a reduced risk tolerance among investors, although KeyBanc remains optimistic about Dycom’s potential due to ongoing multi-year fiber buildouts.
Additionally, DA Davidson maintained a Buy rating on Dycom, with a price target of $220.00, citing the company’s strategic positioning in the telecommunications infrastructure sector. The firm emphasized Dycom’s potential growth from expanding rural fiber networks and increasing demand for long-distance infrastructure. Dycom has also projected a full-year revenue growth of 10-13% for fiscal year 2026, marking the first time the company has provided such an outlook. However, Dycom’s guidance for the first quarter of fiscal 2026 was lower than anticipated due to adverse weather conditions and the impact of California wildfires on its operations. Despite these challenges, Dycom authorized a new $150 million share repurchase program, signaling confidence in its future prospects.
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