Glasshouse short Granite, cites ‘dubious accounting and rocky history’

Glasshouse Research is short Granite Construction, calling it “a company with dubious accounting coupled with a rocky history.” In a recently published report, Glasshouse initiated Granite Construction with a Strong Sell Opinion, saying that the company is “marked with recent accounting failures, faces substantial revenue and earnings headwinds, accompanied by an elevated risk of potential restatements.” “Granite’s shaky balance sheet portends recent premature revenue recognition by management. This is coupled with cost overruns, delays, and missed milestones on many of its major projects,” it adds. “After going through countless filings, earnings calls, presentations, and conducting interviews with past employees, we believe that Granite management used similar accounting gimmicks to appear to turn around a company that previously reported depressed margins and earnings. Based on our extensive experience researching accounting frauds, especially within the construction industry, we take issue with both the quantity and scope of financial engineering used by management over recent years.”