Sterling Infrastructure (STRL) Falls More Steeply Than Broader Market: What Investors Need to Know

In the latest close session, Sterling Infrastructure (STRL) was down 2.01% at $485.18. This change lagged the S&P 500's 0.59% loss on the day. Meanwhile, the Dow lost 0.6%, and the Nasdaq, a tech-heavy index, lost 0.65%.

Shares of the civil construction company witnessed a loss of 9.8% over the previous month, trailing the performance of the Construction sector with its loss of 9.47%, and the S&P 500's loss of 1.37%.

The investment community will be closely monitoring the performance of Sterling Infrastructure in its forthcoming earnings report. The company is expected to report EPS of $6.08, up 74.71% from the prior-year quarter. Simultaneously, our latest consensus estimate expects the revenue to be $1.15 billion, showing a 67.05% escalation compared to the year-ago quarter.

In terms of the entire fiscal year, the Zacks Consensus Estimates predict earnings of $20.06 per share and a revenue of $4.11 billion, indicating changes of +84.38% and +65.22%, respectively, from the former year.

It's also important for investors to be aware of any recent modifications to analyst estimates for Sterling Infrastructure. These revisions typically reflect the latest short-term business trends, which can change frequently. With this in mind, we can consider positive estimate revisions a sign of optimism about the business outlook.

Empirical research indicates that these revisions in estimates have a direct correlation with impending stock price performance. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has shifted 0.04% downward. Sterling Infrastructure is holding a Zacks Rank of #3 (Hold) right now.

Investors should also note Sterling Infrastructure's current valuation metrics, including its Forward P/E ratio of 24.68. Its industry sports an average Forward P/E of 23.91, so one might conclude that Sterling Infrastructure is trading at a premium comparatively.

One should further note that STRL currently holds a PEG ratio of 1.65. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The average PEG ratio for the Engineering - R and D Services industry stood at 1.53 at the close of the market yesterday.

The Engineering - R and D Services industry is part of the Construction sector. Currently, this industry holds a Zacks Industry Rank of 157, positioning it in the bottom 37% of all 250+ industries.

The Zacks Industry Rank is ordered from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.

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This article originally published on Zacks Investment Research (zacks.com).

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