Sterling Infrastructure: Buy This Small Cap Growth Stock Even After Earnings Pop (STRL)

Infrastructure companies in the US are experiencing significant growth, as seen in recent earnings reports from companies like Powell Industries (POWL). Following their fiscal Q2 2024 report, POWL saw a nearly 50% increase in year-over-year revenue growth. Back in March 2023, POWL was identified as a Growth stock for the Fourth Industrial Revolution, and since then, the stock has risen by over 250%.

Another US-based infrastructure growth stock making waves is Sterling Infrastructure (NASDAQ: STRL). After reporting strong Q1 2024 earnings, the stock surged by as much as 15% higher than the previous day’s close. With a backlog of $2.35 billion and a positive outlook for the remainder of the year, STRL is on track for continued growth.

STRL’s Q1 2024 earnings showcased impressive results, including a 9% increase in revenues, a 17.5% gross margin, and a 58% increase in net income. Despite challenging weather conditions in January and February, CEO Joe Cutillo remains optimistic about the company’s growth trajectory.

From a technical and fundamental standpoint, STRL has seen a 188% increase in the past year and trades at a forward P/E of about 20. The SA Quant system rates STRL as a Strong Buy, with solid factor grades in Profitability, Momentum, and Revisions.

Analysts are bullish on STRL, with upward revisions in EPS estimates for 2024 and 2025. The stock, although not widely followed, has shown resilience and potential for further growth.

Comparing STRL to peers like POWL, the stock has exhibited strong performance over the past year. The infrastructure sector, including companies like PRIM and ROAD, shows promise for outperformance in 2024.

In conclusion, despite potential risks such as market crashes or adverse weather conditions, investing in STRL now could yield substantial returns in the long run. With a positive Q1 report and a promising outlook for 2024, STRL is positioned for continued growth. Consider adding STRL to your portfolio for potential upside.