Astec Gains From Infrastructure Cycle and Aftermarket Growth
Astec Industries, Inc. ASTE is well-positioned to benefit from multi-year U.S. infrastructure spending cycle. The company is also building a steadier aftermarket stream that can cushion results through the cycle.
Astec makes equipment and components used across the road-building lifecycle, from aggregate quarrying to asphalt application. The company also sells industrial automation controls and telematics platforms.
Improving Demand Visibility for ASTE
Astec’s end markets are benefiting from sustained public infrastructure investments, with demand for asphalt and concrete plants remaining strong toward the end of 2025. This supportive backdrop is helping stabilize expectations for plant-related activity.
Astec ended 2025 with consolidated backlog of $514.1 million, up 22.5% year over year as of Dec. 31, 2025. This followed a mid-year trough and supports a clearer shipment runway heading into 2026.
The Zacks Consensus Estimate for revenues for 2026 stands at $1.59 million, suggesting year-over-year growth of 13%. The estimate for 2027 is at $1.64 million, indicating 3% growth.
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Implied consolidated orders also rose sequentially in the fourth quarter, led by the Infrastructure Solutions segment. This trend is notable, as Infrastructure has been identified as the primary near-term growth driver.
Aftermarket Focus Enhances Stability
Astec has emphasized aftermarket parts as an integral revenue stream that supports customer retention across cycles. A higher parts mix can reduce earnings volatility because it is tied to an installed base that continues operating even when new equipment orders fluctuate.
Parts sales increased 11.5% in 2025 and rose 19.7% year over year in the fourth quarter. Parts represented 30.7% of total sales in 2025, underscoring the growing contribution from recurring demand.
Portfolio Expansion and Innovation to Drive Growth
Astec strengthened its business in 2025 through targeted acquisitions and new product launches, adding more than $200 million in annual revenues. The TerraSource acquisition contributed $84.7 million of incremental net sales in 2025 and also lifted Materials Solutions year-end backlog, including a $53.2 million contribution.
The company has also advanced an innovation pipeline that includes new plant technologies, processing equipment and a digital platform. These efforts expand the installed base and can increase recurring parts opportunities as more equipment operates within Astec’s service and support ecosystem.
Astec currently sports a Zacks Rank #1 (Strong Buy). For context on the broader construction and mining equipment landscape, Caterpillar Inc. CAT and Terex Corporation TEX are two notable industry peers. In the same peer set, CAT carries a Zacks Rank #2 (Buy), while TEX shows a Zacks Rank #5 (Strong Sell).
You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).
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