Why Is Dycom Industries (DY) Down 5.9% Since Last Earnings Report?

It has been about a month since the last earnings report for Dycom Industries (DY). Shares have lost about 5.9% in that time frame, underperforming the S&P 500.

Will the recent negative trend continue leading up to its next earnings release, or is Dycom Industries due for a breakout? Well, first let's take a quick look at the most recent earnings report in order to get a better handle on the recent drivers for Dycom Industries, Inc. before we dive into how investors and analysts have reacted as of late.

Dycom Q4 Earnings & Revenues Top, Adjusted EBITDA Up Y/Y

Dycom reported stellar results for the fourth quarter of fiscal 2026 (ended Jan. 31). Adjusted earnings and contract revenues surpassed the Zacks Consensus Estimate and grew year over year.

Q4 Earnings & Revenue Discussion

Dycom reported adjusted earnings per share (EPS) of $2.03, which topped the Zacks Consensus Estimate of $1.91 by 6.3%. In the year-ago quarter, it reported an adjusted EPS of $1.43.

Contract revenues of $1.46 billion surpassed the consensus mark of $1.34 billion by 5.1% and grew 34.4% year over year. Contract revenues rose 16.6% on an organic basis. Acquired businesses contributed $95.8 million.

Dycom’s largest customers, including AT&T, Verizon and Lumen, each exceeded 10% of total revenues in the fiscal fourth quarter. Other customers, including Brightspeed, Charter, Comcast and Uniti, exceeded 5% of total revenues.

Operations & Backlog Details

Adjusted EBITDA increased 39.6% to $162.4 million from a year ago. Adjusted EBITDA margin of 11.1% expanded 40 basis points (bps) from the year-ago level.

Dycom’s backlog as of the fiscal fourth quarter totaled $9.54 billion, up year over year by 23% from $7.76 billion. Of the current backlog position, $6.36 billion is projected to be completed in the next 12 months.

Segmental Details

Beginning in the fourth quarter of fiscal 2026, Dycom revised its segments to two reportable segments: Communications and Building Systems. The Building Systems segment reflects the results of Power Solutions, LLC, which was acquired on Dec. 23, 2025.

Communications: This segment’s contract revenues increased year over year by 25.6% to $1.36 billion. The results were driven by continued strong demand from FTTH programs, wireless activity and long-haul and middle-mile fiber infrastructure deployments. Adjusted EBITDA increased to $151.3 million from $116.4 million a year ago. Adjusted EBITDA margin of 11.1% expanded 40 basis points (bps) from the year-ago level. This segment’s total backlog grew year over year by 7.4% to $8.33 billion, with a 12-month backlog of $5.25 billion.

Building Systems: The segmental contract revenues were $95.8 million. Adjusted EBITDA was $11.1 million and adjusted EBITDA margin was 11.6%. This segment’s total backlog stood at $1.21 billion, with a 12-month backlog of $1.11 billion.

Inside Fiscal 2026

During the full fiscal year, contract revenues of $5.55 billion grew 17.9% year over year, with organic revenues increasing 6.5%. Adjusted EBITDA was up 28% to $737.7 million from $576.3 million reported in fiscal 2025. Adjusted EBITDA margin expanded 105 bps year over year to 13.3%. Adjusted EPS was $11.97, up year over year by 29.7% from $9.23.

Balance Sheet & Cash Flow

As of Jan. 31, 2026, Dycom had liquidity of $1.46 billion, including cash and cash equivalents worth $709.2 million, compared with $92.7 million as of fiscal 2025-end. Long-term debt was $2.81 billion as of the fiscal fourth quarter, up from $933.2 million at the fiscal 2025-end.

In fiscal 2026, DY repurchased shares of its common stock for $30.2 million. Free cash flow as of the fiscal fourth quarter was $435.3 million, up from $137.8 million a year ago.

Q1 Guidance

Dycom expects contract revenues between $1.64 billion and $1.71 billion for the first quarter of fiscal 2027. This compares with $1.26 billion reported in the year-ago quarter. Adjusted EBITDA is expected to be between $202 million and $218 million, indicating growth from $150.4 million reported last year. Dycom anticipates adjusted EPS in the range of $2.57-$2.90. Stock-based compensation is expected to be about $10 million. Net interest expense is expected to be approximately $36 million, with the effective adjusted tax rate projected to be 26%.

Fiscal 2027 View

Dycom expects full-year contract revenues to be between $6.85 billion and $7.15 billion, reflecting 23.6-29% year-over-year growth, and 6.6-10.3% organic growth. Adjusted EBITDA margin is expected to expand in fiscal 2027. In the Communications segment, Dycom expects modest adjusted EBITDA margin improvement as operating leverage offsets continued investment to support its growth. In the Building Systems segment, the company expects to deliver a mid-teen adjusted EBITDA margin as it scales the business to capitalize on favorable sector tailwinds.

How Have Estimates Been Moving Since Then?

In the past month, investors have witnessed a upward trend in fresh estimates.

VGM Scores

At this time, Dycom Industries has a strong Growth Score of A, though it is lagging a lot on the Momentum Score front with a C. Following the exact same course, the stock has a score of C on the value side, putting it in the middle 20% for value investors.

Overall, the stock has an aggregate VGM Score of B. If you aren't focused on one strategy, this score is the one you should be interested in.

Outlook

Estimates have been broadly trending upward for the stock, and the magnitude of these revisions looks promising. Notably, Dycom Industries has a Zacks Rank #4 (Sell). We expect a below average return from the stock in the next few months.

Performance of an Industry Player

Dycom Industries is part of the Zacks Building Products - Heavy Construction industry. Over the past month, MasTec (MTZ), a stock from the same industry, has gained 13.9%. The company reported its results for the quarter ended December 2025 more than a month ago.

MasTec reported revenues of $3.94 billion in the last reported quarter, representing a year-over-year change of +15.8%. EPS of $2.07 for the same period compares with $1.44 a year ago.

For the current quarter, MasTec is expected to post earnings of $0.97 per share, indicating a change of +90.2% from the year-ago quarter. The Zacks Consensus Estimate has changed +5.1% over the last 30 days.

MasTec has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of B.

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