NEW YORK, August 2, 2026, 13:10 EDT
- U.S. cash markets remain closed on Sunday and will reopen on Monday.
- Sterling will announce its second-quarter results following the close of trading on Monday.
- FactSet’s Q2 EPS projection has climbed to $5.01, representing a 37% rise over the past three months.
Sterling Infrastructure faces a divided outlook ahead of Monday’s earnings update. Shares dropped 9.7% in the past week. Over the last three months, FactSet’s forecast for second-quarter EPS climbed 37%.
The primary focus is now on the full-year forecast. Management’s guidance midpoint falls short of FactSet’s $18.89 consensus, which is just 0.8% under the $19.05 top end. A typical earnings beat may not move the share price.
The U.S. cash market did not open on Sunday. Sterling’s results will be announced following Monday’s market close. Management is set to review second-quarter results and discuss the 2026 outlook during a call on Tuesday at 9 a.m. ET.
The stock ended Friday at $596.77, increasing 2.8% over the session. This gain came after a 15.2% drop on Tuesday and a 17.5% surge on Thursday.
| Session | Close | Daily move | Volume |
|---|---|---|---|
| July 27 | $634.63 | fell 4.0% | 0.53 million |
| July 28 | $538.09 | dropped 15.2% | 2.77 million |
| July 29 | $494.24 | down 8.2% | 0.99 million |
| July 30 | $580.73 | rose 17.5% | 1.03 million |
| July 31 | $596.77 | increased 2.8% | 0.83 million |
The range between the high and low over five sessions reached 28% of the previous Friday’s closing level. Despite this, the S&P 500 rose 1.05% during the week, while the Nasdaq advanced 1.59%. Reuters stated that questions over returns from AI infrastructure had unsettled investors until better-than-expected cloud earnings helped calm nerves.
The decline came after a significantly larger rise. Sterling was still up 94.9% for 2026 as of Friday. As a result, the stock pairs lofty expectations with notably large price fluctuations.
The earnings threshold shifted the other way. FactSet’s projections listed are initial and subject to revision.
| Earnings period | Three months ago | One month ago | Current | Three-month change |
|---|---|---|---|---|
| Q2 2026 EPS | $3.65 | $4.99 | $5.01 | +37.3% |
| Q3 2026 EPS | $3.98 | $5.66 | $5.70 | +43.2% |
| FY2026 EPS | $13.73 | $18.89 | $18.89 | +37.6% |
| FY2027 EPS | $16.02 | $24.05 | $24.05 | +50.1% |
The majority of that estimate adjustment was made before last week’s drop. Over the last month, the Q2 number increased by just two cents. The full-year projection remained steady. The selloff was not caused by reduced forecasts.
Based on Q1’s reported earnings and the present estimates for Q2 and Q3, Sterling requires $4.59 in Q4 earnings per share to reach FactSet’s annual projection. Achieving this would mean a 49% increase compared to the same quarter last year.
| 2026 forecast | Full-year EPS | Estimated Q4 EPS | Increase from Q4 2025 |
|---|---|---|---|
| Company forecast low | $18.40 | $4.10 | +33.1% |
| Company forecast midpoint | $18.73 | $4.43 | +43.7% |
| FactSet projection | $18.89 | $4.59 | +49.0% |
| Company forecast high | $19.05 | $4.75 | +54.2% |
The calculation is based on Q1 reported EPS of $3.59, with preliminary projections for Q2 and Q3 at $5.01 and $5.70, respectively.
Sterling reported a robust first quarter, with revenue climbing 92% to $825.7 million. Adjusted EPS increased 120% to $3.59, and operating cash flow totaled $165.6 million. CEO Joe Cutillo stated, “Bid and award activity in early 2026 was strong.” PR Newswire
E-Infrastructure accounted for the majority of the economics, generating 72% of first-quarter revenue. The division reported an adjusted operating margin of 23.5%.
| Q1 2026 segment | Revenue | Revenue share | Adjusted operating margin |
|---|---|---|---|
| E-Infrastructure Solutions | $597.7 million | 72% | 23.5% |
| Transportation Solutions | $132.9 million | 16% | 12.9% |
| Building Solutions | $95.1 million | 12% | 8.7% |
Over 90% of E-Infrastructure’s backlog is made up of mission-critical projects. This portfolio features data centres, manufacturing locations and semiconductor sites. Signed backlog along with upcoming phases secures significant revenue coverage.
| March 31 pipeline metric | Amount | Reported change | Excluding CEC | 2026 revenue midpoint multiple |
|---|---|---|---|---|
| Signed backlog | $3.80 billion | Up 78% compared to a year earlier | Up 51% | 1.01x |
| Combined backlog | $5.15 billion | Up 131% from the prior year | Up 46% | 1.37x |
| Pool including expected future phases | Around $6.50 billion | Increase of roughly $2 billion since year-end | Not stated | 1.73x |
Acquisition figures are significant. CEC accounted for $592 million in signed backlog and $1.88 billion in total backlog. When excluding CEC, growth was still solid but below the headline pace. Investors will be looking for new confirmation that underlying demand picked up as well.
While Sterling’s valuation is still considered high, it does not represent the highest among its peer group. Comparable data-centre construction metrics are available from Quanta Services NYSE:PWR, Comfort Systems USA NYSE:FIX, and EMCOR Group NYSE:EME.
| Company | Friday close | Market value | Trailing P/E |
|---|---|---|---|
| Sterling Infrastructure NASDAQ:STRL | $596.77 | $18.5 billion | 53.3 times |
| Quanta Services NYSE:PWR | $667.36 | $101.7 billion | 76.4 times |
| Comfort Systems USA NYSE:FIX | $1,729.69 | $61.0 billion | 42.6 times |
| EMCOR Group NYSE:EME | $797.43 | $35.2 billion | 24.8 times |
Sterling is valued at 31.6 times FactSet’s projected EPS for 2026. This ratio drops to 24.8 times according to the 2027 estimate. Achieving this narrowing would mean earnings need to grow by around 27% in the following year.
Monday’s report should provide clarity on three key points. Are E-Infrastructure margins holding close to 23.5%? Is the ex-CEC backlog continuing to grow? Will management raise its EPS forecast of $18.40 to $19.05 again? Demonstrated improvement would reinforce the updated forecast. Unchanged guidance would narrow the margin for error.
Risks: Adjusted operating income at Building Solutions declined by 42% in Q1. Management anticipates challenging housing conditions to persist until 2026. Any setbacks from data-centre delays, CEC execution issues, or declining margins could impact backlog conversion.
