Sterling Infrastructure Inc. Common Stock (STRL)

FairStock Score: 47/100 — MIXED

Key Financials

Strengths

• Generates $278 million in annual free cash flow (1.8% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 32.0% demonstrating efficient capital deployment
• Conservative balance sheet with debt-to-equity of just 0.32, providing financial flexibility
• Altman Z-Score of 6.8 confirms minimal bankruptcy risk and strong solvency

Concerns

• Trades significantly above Graham Number ($87) with negative 464% margin of safety—limited downside protection

AI Analysis

Sterling Infrastructure Inc. Common Stock is a mid-cap industrials company valued at $15.1 billion. The business generates $2.5 billion in annual revenue with a 3.5% net margin and $278 million in free cash flow. From a quality standpoint, Sterling shows solid Piotroski F-Score of 7/9 and Altman Z-Score of 6.8 confirms fortress-level solvency. On valuation, the stock is commanding a steep 52.9x multiple, with trades far above its Graham Number ($87) with no margin of safety. Growth dynamics show revenue growing at 51.5% and profit growth of -22.6%. Our composite FairStock Score of 47/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Sterling's 51% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $278 million in annual free cash flow (1.8% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 53x 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