Sterling’s stock price has taken a beating over the past six months, shedding 33.2% of its value and falling to $353.44 per share. This might have investors contemplating their next move.
Following the pullback, is now a good time to buy STRL? Find out in our full research report, it’s free.
Why is STRL a good business?
Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ: STRL) provides civil infrastructure construction.
1. Skyrocketing revenue shows strong momentum
Examining a company’s long-term performance can provide clues about its quality. Any business can have short-term success, but a top-tier one grows for years. Over the last five years, Sterling grew its sales at an incredible 23.1% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.
2. Outstanding long-term EPS growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Sterling’s EPS grew at 59.7% compounded annual growth rate over the last five years, higher than its 23.1% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. New investments bear fruit as ROIC jumps
We like to invest in businesses with high returns, but the trend in a company’s ROIC can also be an early indicator of future business quality.
Fortunately, Sterling’s ROIC has increased significantly over the last few years. This is a great sign when paired with its already strong returns. It could suggest its competitive advantage or profitable growth opportunities are expanding.
Final judgment
These are just a few reasons why we think Sterling is an elite industrials company. With the recent decline, the stock trades at 12.4× forward P/E (or $353.44 per share). Is now a good time to buy? See for yourself in our full research report, it’s free.
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