Sterling Infrastructure (STRL) Surprises With Margin Increases in the Data Center Business Again. This is Followed by a Forecast Increase.
We recently discussed Sterling Infrastructure (STRL) among the relative strength stocks. The company is able to report high order intake in its largest and highest-margin segment (e-infrastructure). Sterling is benefiting from the fact that customers in the data center market want to quickly build up the capacities required for AI technology. The solutions offered include large-scale site development projects for data centers that provide critical infrastructure for cloud computing and data-intensive applications. Sterling has expanded its service...
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'post_content' => 'We recently discussed Sterling Infrastructure (STRL) among the relative strength stocks. The company is able to report high order intake in its largest and highest-margin segment (e-infrastructure). Sterling is benefiting from the fact that customers in the data center market want to quickly build up the capacities required for AI technology. The solutions offered include large-scale site development projects for data centers that provide critical infrastructure for cloud computing and data-intensive applications. Sterling has expanded its service to also operate in areas such as e-commerce, manufacturing and energy supply, with data centers playing an essential role.
The company is on an impressive growth trajectory and has reported EPS growth of over 40% for three consecutive years. On Monday (May 6), the company reported its Q1 figures after the close of trading. The gross margin of 17.5% set a new record. Sterling closed Q1 with an order backlog of over $2.35 billion, an increase of 45% compared to the same quarter last year. This once again reflects the strength in the data center and aerospace markets. However, Building Solutions segment revenue also grew by 23% and operating profit by 70%, reflecting the strength of the residential panel business and the excellent performance of the recently acquired Professional Plumbers Group (PPG). Overall, the company\'s EPS of $1.00 far exceeded estimates of $0.77.
Management was therefore able to maintain the revenue and EBITDA forecast for the full year and raise the forecast for net income and diluted earnings per share.
Sterling Infrastructure (ISIN US8592411016): The valuation already appeared sporty with a forward P/E 2024 ratio of 22. However, the company can probably grow even faster than expected. The share is now attacking its all-time high.
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