Great Lakes Dredge & Dock (GLDD) Earnings Growth Outpaces Narratives With 36% Profit Gain

Great Lakes Dredge & Dock (GLDD) delivered a standout earnings result, posting a 36.3% increase in earnings over the past year, well ahead of its five-year average growth of 4.1% per year. The company’s net profit margin improved to 9.7%, up from 8% previously. This signals stronger profitability and efficiency even as the stock trades at $12.77, a premium relative to one benchmark of fair value. With high-quality earnings and a steady track record of growing profit or revenue, GLDD’s results give investors reason to take notice. However, forward-looking risks around earnings and revenue growth remain central to the outlook.

See our full analysis for Great Lakes Dredge & Dock.

Next, we will see how these figures hold up when compared to the most widely followed narratives and market expectations for GLDD.

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Project Pipeline and Revenue Visibility Stand Out

• GLDD reports a record $1 billion backlog of awarded projects, providing substantial revenue visibility through 2026 and 2027 and supporting projections for 4.8% annual revenue growth over the next three years.
• According to the analysts' consensus view, the expansion into offshore energy and international markets via new vessels like Acadia is expected to reduce GLDD’s reliance on U.S.-centric cycles and government funding. This has the potential to deliver steadier earnings over time.
  • Consensus notes that diversification should strengthen earnings stability and balance sheet health as cash flow rises after the current capital investment cycle.
  • These catalysts could help offset the narrower profit margins forecast for 2027 and cushion the business from sector slowdowns.
• With increasing investments in coastal resilience and critical infrastructure, the addressable project pipeline grows, supporting long-term operating capacity and earnings.

Leverage and Backlog Risks Weigh on Outlook

• Analysts forecast profit margins to shrink from 8.6% now to just 6.4% in three years, and earnings are projected to contract at an annual rate of 12.3% despite the healthy backlog.
• Consensus narrative highlights that continued high leverage from the recent fleet investments and heavy dependence on government and LNG contracts leave GLDD vulnerable to project delays, regulatory risks, and shifts in U.S. infrastructure spending.
  • Industry-wide slowdowns and ongoing pauses in sectors like offshore wind limit GLDD’s participation in over 50% of available bids. This raises questions about backlog gaps after 2026.
  • Any softening in demand or further delays in new project starts may increase pressure on free cash flow and compress margins, amplifying risk if high leverage persists as the market tightens.

Share Trades at Deep Discount to Industry

• GLDD’s trailing PE ratio of 10.8x stands in contrast to the U.S. construction industry average of 34.6x and its peer group’s 40.4x, despite trading at $12.77. This is a 12% premium to the DCF fair value of $11.41 but remains well below the analyst consensus target of $15.50.
• Analysts' consensus view points out that for the price to re-rate to $15.50, investors would need to believe GLDD can meet projected earnings of $61 million and trade on a forward PE of 22.7x by 2028, a level still lower than the current industry average.
  • This sharp valuation discount signals skepticism about long-term growth, yet offers room for upside if management executes on backlog and entry into new markets.
  • Despite expected earnings contraction, the stock reflects more caution than the consensus narrative’s mildly optimistic stance on recovery and resilience.
• If shares close the gap to the consensus target, this would mean a 21% price gain from today’s levels even before considering any expansion in industry multiples.
• Curious how strategic shifts and new project wins could turn this discount to a premium? 📊 Read the full Great Lakes Dredge & Dock Consensus Narrative.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Great Lakes Dredge & Dock on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

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A great starting point for your Great Lakes Dredge & Dock research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

See What Else Is Out There

GLDD faces shrinking profit margins, significant leverage from recent investments, and risks from concentrated government contracts that could threaten future earnings stability.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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