Sterling Infrastructure (STRL) Surges 18.4%

Sterling Infrastructure, Inc. has recently released its 10-K report, providing a detailed insight into its business operations and financial performance. The company operates through multiple subsidiaries in three segments, focusing on E-Infrastructure, Transportation, and Building Solutions primarily across the Southern, Northeastern, Mid-Atlantic, and Rocky Mountain regions, as well as the Pacific Islands. The E-Infrastructure Solutions segment offers large-scale site development services for manufacturing, data centers, e-commerce distribution centers, and more. Transportation Solutions include infrastructure and rehabilitation projects for highways, roads, bridges, airports, ports, rail, and storm drainage systems. Building Solutions encompass residential and commercial concrete foundations, parking structures, elevated slabs, and plumbing services for new single-family residential builds.

In terms of significant transactions, Sterling Infrastructure sold its 50% ownership interest in its partnership with Myers for $18 million in cash, receiving two payments totaling $14 million in the first quarter of 2023, with two additional payments of $2 million each due by the end of 2025 and 2027. This strategic shift aimed to reduce the company's portfolio of low-bid heavy highway and water containment & treatment projects and focus on strategic geographies outside of California. Additionally, the company completed the acquisition of Professional Plumbers Group, Incorporated for approximately $57 million, expanding its suite of residential services in the Dallas-Fort Worth market.

The company foresees favorable opportunities for long-term growth across each of its business segments. It remains focused on strategic objectives, including growth in E-Infrastructure Solutions, risk reduction in Transportation Solutions, growing market share and geographic presence in Building Solutions, and improving margins in each segment.

As of December 31, 2023, Sterling Infrastructure's backlog stood at $2.07 billion, compared to $1.41 billion at December 31, 2022, with a book-to-burn ratio of 1.38. Unsigned Awards were $303.2 million at December 31, 2023, and combined backlog totaled $2.37 billion, with a book-to-burn ratio of 1.40 for the year ended December 31, 2023.

In terms of financial performance, Sterling Infrastructure reported revenues of $1.97 billion for 2023, an increase of $202.8 million, or 11.5%, compared to the prior year, with 9.1% generated from organic growth. Gross profit was $337.6 million for 2023, an increase of $63.1 million, or 23.0%, compared to the prior year, and the gross margin increased to 17.1% in 2023 from 15.5% in the prior year.

The company's operations consist of three reportable segments: E-Infrastructure Solutions, Transportation Solutions, and Building Solutions. Operating income for E-Infrastructure Solutions was $141.0 million, or 15.0% of revenue, in 2023, Transportation Solutions was $41.9 million, or 6.6% of revenue, and Building Solutions was $46.2 million, or 11.4% of revenue.

Today the company's shares have moved 18.4% to a price of $106.51. Check out the company's full 10-K submission here.

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