Sterling Infrastructure (STRL) Is Up 9.4% After Record Q2 and CEC Acquisition - What's Changed

• Sterling Infrastructure recently completed the acquisition of CEC Facilities Group and reported a record second quarter in 2025, with revenue growing by 21% and gross profit margins reaching a new high of 23.3%.
• This momentum, underpinned by strong earnings growth and positive analyst sentiment, has supported upward revisions in earnings estimates and increased optimism regarding the company’s accretive acquisition-driven expansion.
• We'll examine how Sterling's robust earnings momentum and recent acquisition may influence the company’s longer-term investment case.

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Sterling Infrastructure Investment Narrative Recap

To be a shareholder in Sterling Infrastructure right now, you need to believe in the company's ability to sustain its rapid revenue and margin growth, driven by robust demand for E-Infrastructure and accretive acquisitions like CEC Facilities Group. While recent record-setting earnings and raised guidance have bolstered optimism, the key short-term catalyst remains continued mega-project wins and backlog growth. However, the most significant risk is any slowdown in data center construction or new project awards; the latest news does not materially alter this risk.

Of the many relevant announcements, Sterling's completion of the CEC Facilities Group acquisition stands out most. This move expands the firm’s suite of E-Infrastructure offerings and adds potential earnings upside in the near term, directly connecting to investors' focus on margin expansion and the ability to secure large, complex projects.

But even with accelerating growth, investors should be aware that risks tied to the sustainability of mega-project demand and backlog replenishment remain...

Read the full narrative on Sterling Infrastructure (it's free!)

Sterling Infrastructure's narrative projects $2.6 billion in revenue and $276.4 million in earnings by 2028. This requires 6.9% yearly revenue growth and a $8.6 million earnings decrease from $285.0 million today.

Uncover how Sterling Infrastructure's forecasts yield a $355.00 fair value, a 13% upside to its current price.

Exploring Other Perspectives

Fair value estimates from eight Simply Wall St Community members range from US$91.36 to US$373.38 per share, reflecting vastly different growth expectations. While many are focused on future mega-project demand, these numbers show just how differently market participants see Sterling's prospects.

Explore 8 other fair value estimates on Sterling Infrastructure - why the stock might be worth less than half the current price!

Build Your Own Sterling Infrastructure Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Sterling Infrastructure research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Sterling Infrastructure research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Sterling Infrastructure's overall financial health at a glance.

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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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