Why Construction Partners Is Poised to Outperform in the Sunbelt Infrastructure Boom

The Sunbelt region-encompassing the southeastern and southwestern United States-is experiencing a surge in infrastructure demand driven by population growth, urbanization, and public-private partnerships. At the center of this boom is Construction Partners, Inc. (CPI), a vertically integrated construction and infrastructure services company that has leveraged strategic acquisitions, margin expansion, and favorable valuation metrics to position itself as a key player in the sector. With a disciplined approach to geographic expansion and operational efficiency, CPI is uniquely poised to capitalize on the Sunbelt's infrastructure tailwinds.

Strategic Acquisitions: Building a Diversified Footprint

CPI's aggressive acquisition strategy in 2023–2025 has significantly bolstered its market presence and operational capabilities. In May 2024, the company acquired Sunbelt Asphalt Surfaces, Inc. in Auburn, Georgia, adding one active hot-mix asphalt plant and a greenfield facility in Commerce, Georgia, which is slated for activation according to press release. This move not only expanded CPI's capacity in a high-growth market but also reinforced its vertical integration model, reducing reliance on third-party suppliers.

By October 2025, CPI accelerated its expansion into Texas, acquiring eight hot-mix asphalt plants in the Houston metro area through its subsidiary, Durwood Greene Construction Co. according to press release. Houston, a hub for energy and logistics, offers CPI access to a rapidly growing population and a backlog of infrastructure projects. Simultaneously, the company entered Florida's east coast by acquiring P&S Paving, Inc. in Daytona Beach according to press release, a strategic move to tap into the state's tourism-driven construction demand and coastal infrastructure needs.

These acquisitions align with CPI's "build better markets" strategy, which prioritizes geographic diversification and localized expertise. By acquiring regional players with established customer bases, CPI has minimized integration risks while accelerating its ability to bid on large-scale projects.

Margin Expansion: Operational Efficiency as a Catalyst

CPI's disciplined execution has translated into measurable margin expansion. In fiscal 2025, the company reported an adjusted EBITDA margin of 15.1%, up from 12.1% in fiscal 2024. This improvement was driven by vertical integration-controlling raw material sourcing, production, and construction-and cost synergies from acquired assets. For example, the integration of Lone Star Paving and other Texas-based companies allowed CPI to reduce transportation costs and optimize project margins according to results.

Looking ahead, CPI's ROAD 2030 strategic plan outlines ambitious targets: doubling revenue to $6 billion and achieving an 17% EBITDA margin by 2030 according to plan. Third-party analysts project that margins will reach the low-15% range in 2026 as CPI scales its Sunbelt operations and leverages economies of scale according to analysis. This trajectory underscores the company's ability to convert infrastructure demand into sustainable profitability.

Valuation Catalysts: Strong Analyst Sentiment and Growth Projections

CPI's financial performance has attracted favorable attention from analysts and rating agencies. S&P Global Ratings upgraded CPI to 'BB-' in 2025, citing its margin expansion and robust balance sheet according to report. Meanwhile, equity analysts have assigned an 82% "Buy" recommendation, with a 2026 price target of $128.52-a 13.3% increase from its current stock price of $113.43 according to forecast.

The valuation case is further supported by CPI's revenue growth trajectory. In fiscal 2025, revenue is expected to rise 54% year-over-year, with projections of 27% to 29% growth in 2026 according to analysis. These figures reflect strong demand for infrastructure services in the Sunbelt, where CPI's expanded footprint positions it to win contracts in both public (e.g., highway expansions) and private (e.g., commercial development) sectors.

Conclusion: A Compelling Investment Thesis

Construction Partners' strategic acquisitions have created a diversified, asset-rich platform capable of weathering macroeconomic volatility. Its margin expansion, driven by vertical integration and operational discipline, provides a durable competitive advantage. Meanwhile, favorable analyst sentiment and aggressive growth targets highlight the stock's upside potential. As the Sunbelt infrastructure boom gains momentum, CPI's combination of geographic scale, financial strength, and executional excellence makes it a standout performer in a sector poised for long-term growth.