Tutor Perini (TPC): Strong Q1 Results and Backlog Growth Signal Compelling Upside

Tutor Perini (TPC) is firing on all cylinders. The construction giant reported a standout first quarter, with revenue surging 19% year-over-year to $1.25 billion and earnings per share (EPS) jumping 77% to $0.53. These results, coupled with a record $19.4 billion backlog and a Zacks Rank #1 (Strong Buy), position TPC as a top pick in the construction sector. Let's unpack why this stock is primed to outperform.

Q1 Financial Outperformance: A Strong Foundation for Growth

The quarter's standout metrics begin with revenue growth, which hit $1.25 billion, up 19% from the same period in 2024. Income from construction operations rose an impressive 34% to $65.3 million, while diluted EPS nearly doubled compared to last year. These figures are not just a one-off: TPC's updated 2025 EPS guidance now ranges from $1.60 to $1.95, a significant upgrade from its prior $1.50–$1.90 forecast.

The company also emphasized its debt reduction efforts, with total debt dropping $128.5 million (24%) since year-end . This deleveraging, driven by early payoff of its Term Loan B, strengthens its balance sheet and reduces interest costs—a critical move in an environment of rising rates.

Backlog Growth: The Engine of Future Revenue

At the heart of TPC's momentum is its record $19.4 billion backlog, a 94% year-over-year increase. This figure is not just large—it's diversified and high-quality. Key contributors include:
- The $1.18 billion Manhattan Tunnel project in New York, a transformative infrastructure initiative.
- $241 million in additional funding for Apra Harbor Waterfront Repairs in Guam.
- $111 million in healthcare facility projects in California.
- Multiple $100 million+ electrical projects in Texas.

The backlog's strength is further underscored by $500 million in new awards secured in Q2, including the Midtown Bus Terminal Replacement in New York. Management's confidence is clear: they anticipate backlog growth to continue, with 2026 and 2027 EPS expected to more than double the revised 2025 guidance.

Zacks Rank #1: Analysts Are Bullish

The Zacks Rank #1 (Strong Buy) reflects consensus among analysts that TPC is a top pick. This rating, unchanged for 30 days, is backed by robust earnings and revenue estimates:
- Q2 2025 EPS is projected to reach $0.29, a 52.6% YoY increase.
- Full-year 2025 EPS is expected to hit $1.75, a 156% jump over 2024.

The Zacks system's historical performance—where #1-ranked stocks average a +25% annual return since 1988—adds credibility to TPC's potential. While the stock's Forward P/E of 25.52 is premium to its industry average (21.23), the valuation appears justified by its outsized growth trajectory.

Why the Construction Sector Is a Tailwind

TPC operates in a sector primed for growth. The Bipartisan Infrastructure Law and state-level spending on transportation, water, and energy projects are fueling demand. TPC's focus on public-sector projects—which often have stable funding and long timelines—positions it to capitalize on this trend.

Moreover, the company's execution excellence stands out. Its ability to secure and deliver large-scale projects (e.g., the Manhattan Tunnel) amid supply chain and labor challenges demonstrates operational resilience. This expertise is a key differentiator in an industry where project delays and cost overruns are common pitfalls.

Investment Thesis: Buy the Momentum

The combination of TPC's strong financials, record backlog, and analyst support makes it a compelling buy. Key catalysts ahead include:
1. Backlog conversion: With projects like the Manhattan Tunnel entering active phases, revenue visibility is high.
2. Debt reduction benefits: Lower leverage will improve margins and reduce refinancing risks.
3. Sector tailwinds: Infrastructure spending is a multiyear theme, and TPC is among the best positioned to benefit.

While risks like tariffs and project delays exist, TPC's track record and diversified backlog mitigate these concerns. For investors seeking exposure to the construction boom, TPC's Zacks Rank #1 and growth profile make it a standout choice.

Final Take

Tutor Perini is a story of execution, scale, and growth. With a backlog that ensures visibility for years, a deleveraged balance sheet, and analyst enthusiasm, this stock is primed to outperform. For investors willing to ride the infrastructure wave, TPC is a strong buy with upside potential.

Action Item: Consider adding TPC to your portfolio ahead of its Q2 earnings report. Monitor the stock for signs of sustained momentum, and keep an eye on Zacks.com for any updates to its #1 rating.