This STRL Stock Forecast article was written by Levi Fu – Financial Analyst at I Know First.

Highlights

• Sterling Infrastructure’s revenue reached $2.12 billion in 2024, reflecting a 14.2% CAGR from 2019 to 2024.
• The E-Infrastructure segment remains the primary growth driver, contributing 44% of 2024 revenue and 67% of operating income, fueled by data center and logistics site developments.
• Trump’s re-election introduces potential risks and opportunities, with infrastructure spending plans potentially benefiting Transportation Solutions while tariffs on raw materials and tighter immigration policies could pressure margins.
• Despite short-term bearish technicals, the long-term trend remains uncertain, and confirmation of a reversal is needed before shifting to a bullish outlook.

Overview

STRL Stock Forecast: Sterling Infrastructure, Inc. is a U.S.-based infrastructure solutions company specializing in e-infrastructure, transportation, and building services. Its E-Infrastructure Solutions segment delivers site development for e-commerce, data centers, power generation, and manufacturing facilities. Transportation Solutions handles new construction and rehabilitation of highways, roads, bridges, and other vital projects for state, regional, and municipal authorities. Building Solutions focuses on residential and commercial concrete foundations, parking structures, and plumbing services. Founded in 1955 and headquartered in The Woodlands, Texas, the company was formerly known as Sterling Construction Company, Inc. before adopting its current name in June 2022.

STRL Stock Forecast: Sterling Segment Performance

Sterling Infrastructure’s three core business segments—E-Infrastructure Solutions, Transportation Solutions, and Building Solutions—have each followed distinct trajectories over the past five years, yet all contributed to the company’s nearly doubling of total revenue between 2019 and 2024.

The E-Infrastructure Solutions segment, which provides complex site development for data centers, e-commerce warehouses, and power-generation facilities, emerged as the primary growth engine. In 2019, it generated just $84.6 million in revenue and an operating profit of $16.2 million. By 2024, revenues had soared to $923.7 million, while operating profit jumped more than twelve-fold to $203.4 million. Much of this transformation stemmed from rising demand for data center construction as cloud providers and large-scale technology firms scrambled to expand capacity. Management also pursued acquisitions that enhanced expertise in critical-site preparation and allowed Sterling to secure specialized, higher-margin contracts. Despite a small dip in top-line figures from 2023 to 2024 in this segment—likely tied to project timing—E-Infrastructure continued to report strong margin gains, thanks to disciplined bidding practices and a relatively favorable competitive landscape for large, specialized jobs.

Transportation Solutions, which encompasses the construction and rehabilitation of highways, roads, bridges, and similar public infrastructure, experienced a more uneven pattern. Revenues dipped from $760.3 million in 2019 to $553.2 million in 2020, partly reflecting a strategic pruning of low-margin heavy civil work and temporary pauses in state-funded projects. Over the following years, the segment’s top line rebounded, climbing to $783.7 million by 2024, helped in part by new state and federal infrastructure funding. Operating profit rose steadily from $13.2 million in 2019 to $50.9 million in 2024. Besides the gradual return of public-sector work, this improvement reflected Sterling’s sharper focus on profitable contracts, better project management controls, and a willingness to walk away from bids that carried high execution risk. Management has repeatedly emphasized that careful risk-sharing provisions and design-build partnerships help keep Transportation margins on an upward path, even when macroeconomic factors or government budget cycles introduce variability.

Building Solutions, which offers residential and commercial foundation services, as well as concrete and plumbing work, reported modest yet consistent growth. Revenues advanced from $281.3 million in 2019 to $408.4 million in 2024, while operating profit rose from $28.9 million to $49.1 million. Although this segment’s year-to-year shifts were less dramatic than those in E-Infrastructure or Transportation, management credited a stable backlog of commercial construction activity and solid single-family homebuilding demand in core regions for the steady gains. Sterling also used bolt-on acquisitions and internal investments to broaden Building Solutions’ geographic reach, helping smooth out local real estate cycles. The operating margin, which hovered near 10% in 2019, showed modest expansion as the company improved its purchasing processes, standardized certain design and build techniques, and passed on higher raw-material costs in tighter contract structures.

Across these three segments, corporate expenses rose over the same five-year period, moving from $16.3 million in 2019 to $38.3 million in 2024. Management attributed this increase to both the integration of acquired businesses—which added new layers of administrative support—and strategic investments in digital tools for project management and analytics. Even so, segment-level profitability more than compensated for the heavier overhead, giving Sterling leeway to continue investing in operational improvements without significantly diluting overall margins.

STRL Overall Financial Trends for the Past 5 years

Over the span of five years, from 2019 through 2024, Sterling Infrastructure underwent a significant transformation marked by both strategic acquisitions and a sharpening focus on higher-margin projects, particularly those in the E-Infrastructure segment. In 2019, the company generated roughly $1.13 billion in revenue at a modest gross margin of 9.6%, with core activities centered around traditional transportation work and early efforts to gain a foothold in site development for e-commerce and data centers. By the time 2020 rolled around, Sterling had already started seeing traction from its targeted acquisitions, evidenced by gradually rising gross margins and improved contract discipline. Management began to pivot more decisively into mission-critical site-preparation work—data centers, distribution hubs, and power generation facilities—where pricing tends to be more favorable and competition less intense than in basic highway or commercial building jobs. At the same time, the firm integrated newly acquired entities that contributed both to rising goodwill on the balance sheet and to incremental revenue, setting the stage for accelerated top-line expansion.

From 2021 into 2022, Sterling continued adding capacity in E-Infrastructure while also pruning underperforming legacy operations in its Transportation segment. This shift was clear in the rising contribution of E-Infrastructure to total operating income, as well as the steady climb of gross and operating margins. Even though Transportation and Building Solutions remained important to the company’s overall mix, neither business posted the same growth trajectory or margins as E-Infrastructure. Management attributed part of E-Infrastructure’s success to the ongoing boom in data center construction, which proved resilient even as broader economic indicators flickered with uncertainty. By the end of 2023, Sterling was generating nearly $2 billion in annual revenue and had significantly widened its operating margin, thanks not only to strong demand but also to improved project execution. Notably, the company’s approach to selecting and pricing contracts evolved to reduce the financial risk typically associated with large fixed-price infrastructure projects. This disciplined approach helped tamp down cost overruns and made earnings more predictable, particularly in the face of inflationary pressures on materials and labor.

The culmination of these trends was evident in 2024, a year that ended on what management candidly described as a “noisy” fourth quarter. On one hand, reported GAAP EPS in the final quarter was boosted by a $68 million net gain tied to deconsolidating the RHB joint venture, which pushed full-year net income to $257.5 million and GAAP EPS to $8.35. On the other, fourth-quarter revenue fell short of forecasts in Transportation Solutions, partly due to challenging prior-year comparisons and project timing issues. Yet the real story, according to management, was the continued margin strength within the E-Infrastructure segment, which once again outperformed expectations and underscored Sterling’s shift toward data center site-prep services. That high-margin profile, supported by a net cash position of $348 million at year-end, not only insulated the company from short-term revenue variance but also set it up for future moves. Management signaled that additional acquisitions—particularly those that expand Sterling’s data center footprint or bring new technical capabilities—could be on the horizon. More structurally, Sterling announced a revised methodology for adjusted EPS beginning in 2025, excluding stock-based compensation, intangible amortization, and acquisition-related expenses. While this change may complicate direct year-over-year comparisons, it reflects a desire to highlight the company’s recurring operating performance in an evolving business mix dominated by E-Infrastructure. Overall, Sterling’s five-year journey has been defined by its pivot toward specialized, higher-margin projects, prudent contract management, and a balance sheet that increasingly supports strategic expansion, leaving the firm well positioned to capitalize on continuing demand for mission-critical infrastructure.

Expanding its landscape into the Southwest

Sterling’s approach to growth has included a series of strategic “tuck-in” acquisitions that broaden its service offerings and expand its geographic footprint, particularly in high-demand residential construction markets. Two notable transactions over the last two years underscore this philosophy:

On December 20, 2022, Sterling acquired Concrete Construction Services of Arizona (“CCS”). This deal, valued at $22 million, brought into the fold a business specializing in residential concrete foundations in the rapidly expanding Greater Phoenix area. According to management, the transaction was executed at a purchase price multiple of 2.5x–3.5x EBITDA, and immediately strengthened Sterling’s Building Solutions segment by providing additional foundation capacity for large-scale homebuilders. Beyond the tangible top-line additions—CCS generated approximately $70 million of annual revenue—the acquisition also included a seasoned management team with strong local relationships. Sterling’s CEO, Joe Cutillo, characterized CCS as a natural cultural fit with complementary operational expertise, emphasizing that the “population shifts in the area have significantly increased the demand for our residential services” and that CCS broadens the Company’s ability to meet that demand.

Nearly a year later, on November 16, 2023, Sterling extended its Building Solutions reach again by acquiring Professional Plumbers Group (PPG) in Wylie, Texas. Structured as a $50 million cash payment plus a contingent earnout tied to future EBITDA targets, the deal aimed at enhancing Sterling’s residential plumbing services in the bustling Dallas housing market. With annual revenues of $50–$55 million and an “accretive margin profile,” PPG adds vital capabilities that dovetail seamlessly with Sterling’s existing concrete foundation business—particularly the plumbing phases that follow slab completion. Management cited strong customer overlap, an outsourced labor model, and cost-synergy potential as key drivers, projecting that a “full-service concrete slab and plumbing provider” would offer clients a more comprehensive, streamlined construction solution.

STRL Stock Forecast: Geopolitical Risks & the Impact of Trump’s Re-Election on Sterling’s Business

The re-election of Donald Trump in 2024 has introduced a shifting geopolitical and economic landscape that could significantly impact Sterling Infrastructure’s business operations. Given Sterling’s focus on infrastructure, transportation, and residential construction, policy changes under a second Trump administration may create both opportunities and challenges across its business segments. The administration’s approach to infrastructure spending, trade policies, labor regulations, and economic management will play a crucial role in shaping Sterling’s near-term and long-term outlook.

Trump’s infrastructure policies prioritize large-scale investments in traditional energy and transportation projects, particularly oil pipelines, highways, and freight corridors. This shift presents a mixed outlook for Sterling. On one hand, increased federal funding for transportation infrastructure could drive higher project volumes for Sterling’s Transportation Solutions segment, especially in road, bridge, and airport development. The administration’s efforts to reduce environmental permitting hurdles could also fast-track major projects, accelerating revenue recognition for Sterling. However, the administration’s rollback of renewable energy incentives, including the potential elimination of federal tax credits for wind and solar projects, may negatively impact demand for green infrastructure projects within Sterling’s E-Infrastructure segment. Data centers and warehousing projects, which are significant revenue drivers for Sterling, often rely on renewable energy integration. A decline in investment in these areas could slow growth in E-Infrastructure, forcing Sterling to pivot toward more conventional infrastructure developments.

Another major factor affecting Sterling is Trump’s trade policy, particularly tariffs on imported construction materials. The administration’s renewed focus on “America First” trade policies has led to increased tariffs on steel, aluminum, and cement, which could significantly impact Sterling’s cost structure. In particular, the Building Solutions and Transportation Solutions segments rely on these raw materials, and higher costs could lead to margin compression on fixed-price contracts. Additionally, the potential for further trade restrictions could result in supply chain disruptions, causing delays in project execution and increasing procurement challenges. Sterling may need to restructure supplier agreements, increase local sourcing, or pass on higher costs to customers, which could affect demand and project profitability.

Immigration policies under the new administration also pose a challenge, particularly for the construction industry, which depends heavily on immigrant labor. Trump has signaled plans to tighten immigration laws, which could result in labor shortages and wage inflation, impacting Sterling’s ability to staff large-scale infrastructure projects. The Building Solutions segment, which requires skilled labor for concrete and plumbing services, is particularly vulnerable. A reduced workforce could make it difficult for Sterling to scale operations in key markets such as Texas and Arizona, potentially delaying project timelines and increasing subcontractor costs.

Economic conditions under the Trump administration will also play a crucial role in shaping Sterling’s business outlook. The possibility of an economic slowdown, driven by factors such as persistent inflation and high interest rates, could dampen demand in Sterling’s residential construction market. Rising mortgage rates have already led to a slowdown in home purchases, which may translate into reduced homebuilder spending and fewer contracts for Sterling’s foundation and plumbing services. The potential for tighter credit conditions could also increase borrowing costs for developers, making large-scale projects more difficult to finance. While these factors create headwinds for Sterling’s Building Solutions segment, government-driven infrastructure spending could provide a buffer, keeping demand steady in Transportation and E-Infrastructure projects.

STRL Stock Forecast: From Technical Analysis Perspective

Sterling Infrastructure, Inc. (STRL) is exhibiting multiple bearish signals that suggest a potential shift in trend. To determine whether a trend change has occurred, we utilize a structured checklist:

1. Price crossed below the moving average of the focus timeframe (15MA/50MA): The price has decisively fallen below both the 15-day and 50-day moving averages, signaling increased weakness in the stock.
2. Close below a confirmed isolated low or pattern boundary: The stock has broken through a key support level, further reinforcing bearish momentum.
3. 15-day MA crossed below the 50-day MA (Death Cross): A bearish crossover has taken place, which is a strong indication of further downside potential.
4. Higher timeframe 50MA turning downward: The 50-day moving average is sloping downward, suggesting prolonged selling pressure.

The technical evidence supporting a trend change has been steadily accumulating. The price has significantly broken below the long-term trendline, which had previously provided strong support. This breakdown was followed by an attempted retest of the trendline in early February, but the weak price action and limited trading volume signaled an absence of bullish strength. The failure to reclaim this trendline now suggests that previous support has turned into resistance, making recovery efforts more challenging.

A double-top formation has also emerged, confirmed by the price breaking below the neckline. This pattern typically signals a trend reversal, and the subsequent bearish flag pattern further strengthens the case for continued downside movement. The relative strength (RS) vs. the S&P 500 is also trending downward, highlighting increasing weakness compared to the broader market and acting as a warning sign for institutional investors.

STRL Stock Forecast: Price Target & Market Implications

The measured price target from the technical patterns was $110, which has already been reached. This suggests that at least some portion of the downside move has been realized. Moving forward, the stock could experience short-term consolidation or an oversold bounce, especially given the rapid decline. However, the broader trend remains decisively bearish unless a strong reversal occurs with increased volume and price movement above key resistance levels.

Long-Term Trend Still Intact?

While the short-to-medium-term downtrend is confirmed, there is insufficient evidence to declare a shift in the long-term trend. The 200-day moving average (200MA) has not yet turned downward, and the 50-day moving average has not crossed below the 200MA (which would form a true “death cross” on a long-term basis). This means that long-term investors seeking shorting opportunities should proceed with caution, as the overall structural trend remains intact for now.

STRL Stock Forecast: Analysts’ Consensus

Most analysts are optimistic on STRL, according to yahoo finance. The STRL stock forecast price range is spread between $185 and $200 price per share, representing conservative and optimistic case respectively.

STRL Stock Forecast: Conclusion

I recommend a hold on Sterling Infrastructure, Inc. (STRL) in the short term (3-month timeframe), as the stock remains in a downtrend with multiple bearish technical signals. Short-term consolidation or an oversold bounce is possible, but without a decisive move above key resistance levels, there is no clear buy signal yet. Long-term, the trend remains uncertain, and investors should wait for confirmation of a reversal before taking new positions.

It is worth paying attention that the stock-picking AI of I Know First has a high signal on the one-year market trend forecasts. The light red for the short-term forecasts is mildly bearish, while the darker green is a strong bullish signal for the one-year forecast.

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Please note-for trading decisions use the most recent forecast.