Dycom Industries Inc. Common Stock (DY)

FairStock Score: 33/100 — RISKY

Key Financials

Strengths

• Generates $276 million in annual free cash flow (2.2% yield on market cap)
• Solid return on equity of 18.1% above cost of capital
• Revenue growth of 34.4% demonstrates strong top-line momentum
• Established organization with 19,556 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($115) with negative 262% margin of safety—limited downside protection
• Weak Piotroski F-Score of 3/9 suggests deteriorating financial quality across multiple dimensions

AI Analysis

Dycom Industries Inc. Common Stock is a mid-cap industrials company valued at $12.5 billion. The business generates $5.5 billion in annual revenue with a 0.3% net margin and $276 million in free cash flow. From a quality standpoint, Dycom shows weak Piotroski F-Score of 3/9 signaling deteriorating fundamentals and Altman Z-Score of 2.8 in the grey zone. On valuation, the stock is commanding a steep 43.4x multiple, with trades far above its Graham Number ($115) with no margin of safety. Growth dynamics show revenue growing at 34.4% and profit growth of -50.1%. Our composite FairStock Score of 33/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Dycom's 34% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $276 million in annual free cash flow (2.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 43x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer