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Construction Partners
(NASDAQ:ROAD)
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Rating:68Neutral
Price Target:
$114.00
▲(3.54% Upside)
Action:Reiterated
Date:09/06/26
ROAD’s score is driven primarily by improving fundamentals and a strong, guidance-raising earnings call with record backlog and near-term visibility. Offsetting factors are elevated leverage and uneven cash conversion, while technicals remain weak with the stock below major moving averages. Valuation also adds risk given the high P/E and no dividend support.
Positive Factors
Strong growth and improving profitability
Sustained revenue expansion alongside improving margins indicates stronger execution and increasing scale across the company’s infrastructure platform. Although profitability remains modest, the multi-year progression supports greater reinvestment capacity and suggests earnings power can continue building over the next several quarters.
Negative Factors
Elevated leverage limits financial flexibility
Leverage remains above management’s stated target, increasing sensitivity to project-cycle volatility, cost inflation, and any slowdown in infrastructure activity. Debt service and deleveraging needs may constrain capital allocation, while additional borrowing could reduce flexibility if operating conditions weaken.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong growth and improving profitability
Sustained revenue expansion alongside improving margins indicates stronger execution and increasing scale across the company’s infrastructure platform. Although profitability remains modest, the multi-year progression supports greater reinvestment capacity and suggests earnings power can continue building over the next several quarters.
Read all positive factors
Construction Partners Key Performance Indicators (KPIs)
Any
Backlog
Represents the value of signed but uncompleted contracts, providing near-term revenue visibility and an indication of future workload. A growing backlog can signal healthy demand and predictable cash flow, but the mix matters—backlog tied to fixed-price bids or sensitive to state and municipal funding carries greater margin and execution risk than cost-plus or well-secured projects.
Represents the value of signed but uncompleted contracts, providing near-term revenue visibility and an indication of future workload. A growing backlog can signal healthy demand and predictable cash flow, but the mix matters—backlog tied to fixed-price bids or sensitive to state and municipal funding carries greater margin and execution risk than cost-plus or well-secured projects.
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The Fly
The FlyConstruction Partners (ROAD) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.94B
Dividend YieldN/A
Average Volume (3M)698.34K
Price to Earnings (P/E)40.9
Beta (1Y)1.62
Revenue Growth41.92%
EPS Growth85.09%
CountryUS
Employees1,639
SectorIndustrials
Sector Strength72
IndustryEngineering & Construction
Share Statistics
EPS (TTM)2.56
Shares Outstanding48,206,436
10 Day Avg. Volume559,388
30 Day Avg. Volume698,335
Financial Highlights & Ratios
PEG Ratio1.76
Price to Book (P/B)7.65
Price to Sales (P/S)2.48
P/FCF Ratio45.50
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$147.75Price Target Upside34.20% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)3.1
Revenue Forecast (FY)$3.66B
Construction Partners Business Overview & Revenue Model
Company Description
Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas. The company provides various products and services to publ...
How the Company Makes Money
Construction Partners makes money primarily by performing civil infrastructure construction services under contract, with revenue recognized from projects such as roadway construction, paving, and related maintenance and infrastructure improvement...
Construction Partners Earnings Call Summary
Earnings Call Date:Aug 07, 2026
(Q3-2026)
| % Change Since: |
Next Earnings Date:Nov 24, 2026
Earnings Call Sentiment Positive
The call presented a predominantly positive operational and financial picture: strong top-line growth (28.2% YoY in Q3), significant EBITDA and adjusted net income increases, record backlog and raised FY2026 guidance, enhanced liquidity and active M&A that is contributing materially to results. Headwinds cited—wet weather, energy/asphalt inflation, legislative timing risk and an elevated but improving leverage ratio—are being actively managed (pass-through pricing, terminals/indexes, financing actions) and were described as manageable rather than structural threats. Overall, highlights substantially outweighed the lowlights.Positive Updates
Strong Revenue Growth
Q3 revenue of $999.4M, up 28.2% year-over-year (8.9% organic, 19.3% acquisitive). Raised FY2026 revenue guidance to $3.64B–$3.68B reflecting management's statement of over 30% growth on the top line versus the prior year.
Negative Updates
Weather-Related Disruption
Unusually wet weather in May created operational disruption and productivity impacts during the quarter. Management noted weather can cause quarter-to-quarter variance; the team missed a $1.0B quarter by approximately $600K (anecdotally referenced).
Read all updates
Q3-2026 Updates
Positive
Negative
Strong Revenue Growth
Q3 revenue of $999.4M, up 28.2% year-over-year (8.9% organic, 19.3% acquisitive). Raised FY2026 revenue guidance to $3.64B–$3.68B reflecting management's statement of over 30% growth on the top line versus the prior year.
Read all positive updates
Company Guidance
Management raised fiscal 2026 guidance following a strong Q3 (revenue $999.4M, +28.2% Y/Y — 8.9% organic, 19.3% acquisitive; adjusted EBITDA $163M, +24%, margin 16.3%; net income $59.6M; adjusted net income $60.6M; gross profit $168.4M, 16.8% of revenue), setting full‑year ranges of revenue $3.64B–$3.68B, net income $165M–$168M, adjusted net income $177.6M–$181.4M, adjusted EBITDA $559M–$569M and adjusted EBITDA margin ~15.36%–15.46%; the company said this implies over 30% growth on top line and margins, includes about $140M of acquisitive revenue carrying into FY2027, is supported by a record backlog of $3.36B with ~80%–85% of the next 12 months covered, and sits alongside Q3 cash of $95M, $599M available under the credit facility (revolver increased to $700M and $300M of incremental term loans added), a debt/TTM‑EBITDA ratio of 3.1x (target ~2.5x) and an expectation to convert 75%–85% of EBITDA to operating cash flow.Construction Partners Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
58
Neutral
Cash Flow
66
Positive
| Breakdown | TTM | Sep 2025 | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 3.48B | 2.81B | 1.82B | 1.56B | 1.30B | 910.74M |
| Gross Profit | 549.48M | 439.09M | 258.50M | 198.98M | 137.12M | 116.79M |
| EBITDA | 422.22M | 373.17M | 214.72M | 170.15M | 102.61M | 80.73M |
| Net Income | 142.51M | 101.77M | 68.94M | 49.00M | 21.38M | 20.18M |
Balance Sheet | ||||||
| Total Assets | 3.61B | 3.24B | 1.54B | 1.22B | 1.10B | 806.62M |
| Cash, Cash Equivalents and Short-Term Investments | 94.55M | 156.06M | 74.69M | 48.24M | 35.53M | 57.25M |
| Total Debt | 1.89B | 1.69B | 553.25M | 390.73M | 389.83M | 222.87M |
| Total Liabilities | 2.57B | 2.33B | 968.39M | 703.09M | 639.64M | 397.72M |
| Stockholders Equity | 1.04B | 911.96M | 573.74M | 516.57M | 455.88M | 408.90M |
Cash Flow | ||||||
| Free Cash Flow | 175.56M | 153.37M | 121.15M | 59.35M | -52.35M | -7.83M |
| Operating Cash Flow | 352.84M | 291.30M | 209.08M | 157.16M | 16.50M | 48.50M |
| Investing Cash Flow | -692.06M | -1.28B | -307.58M | -143.37M | -197.33M | -263.41M |
| Financing Cash Flow | 317.57M | 1.07B | 126.11M | -264.00K | 159.14M | 123.85M |
Construction Partners Technical Analysis
Negative
110.10
Price Trends
108.22
Negative
113.89
Negative
114.73
Negative
Market Momentum
-1.82
Positive
44.01
Neutral
24.40
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROAD, the sentiment is Negative. The current price of 110.1 is below the 20-day moving average (MA) of 112.42, above the 50-day MA of 108.22, and below the 200-day MA of 114.73, indicating a bearish trend. The MACD of -1.82 indicates Positive momentum. The RSI at 44.01 is Neutral, neither overbought nor oversold. The STOCH value of 24.40 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for ROAD.
Construction Partners Risk Analysis
Construction Partners disclosed 51 risk factors in its most recent earnings report. Construction Partners reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Construction Partners Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $14.88B | 34.67 | 36.67% | ― | 60.83% | 51.23% | |
70 Outperform | $4.64B | 11.09 | 27.41% | 1.79% | -4.37% | 13.37% | |
68 Neutral | $5.94B | 40.89 | 14.61% | ― | 41.92% | 85.09% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
57 Neutral | $5.22B | -31.64 | -16.01% | 0.44% | 21.80% | -204.13% | |
56 Neutral | $4.01B | 28.85 | 8.46% | 0.43% | 5.12% | -42.27% | |
50 Neutral | $7.51B | -4.66 | -57.08% | 6.65% | -4.77% | -151.32% |
* Industrials Sector Average
ROAD
Construction Partners
104.68
-16.13
-13.35%
FLR
Fluor
56.16
15.45
37.95%
GVA
Granite Construction
119.30
12.30
11.50%
KBR
KBR
36.82
-11.69
-24.10%
PRIM
Primoris Services
74.43
-38.32
-33.99%
STRL
Sterling Infrastructure
486.49
199.80
69.69%
Construction Partners Corporate Events
Business Operations and StrategyM&A Transactions
Construction Partners Acquires Asphalt Express to Expand Operations
Positive
Aug 31, 2026
On August 31, 2026, Construction Partners, Inc. announced that it had completed the acquisition of Asphalt Express Enterprises, LLC, a liquid asphalt supply and hauling company based in Ardmore, Oklahoma that serves hot-mix asphalt producers acros...
Business Operations and StrategyExecutive/Board ChangesRegulatory Filings and Compliance
Construction Partners Addresses Nasdaq Compliance After Director’s Passing
Neutral
Aug 10, 2026
On August 10, 2026, Construction Partners disclosed that the death of long-serving director and Audit Committee member Michael H. McKay in a July 22 accident left its Audit Committee with only two independent directors, rendering it temporarily no...
Business Operations and StrategyM&A Transactions
Construction Partners Expands Oklahoma Footprint with Ellsworth Acquisition
Positive
Jul 13, 2026
On July 13, 2026, Construction Partners, Inc. announced it had completed the acquisition of Ellsworth Construction, LLC, an asphalt manufacturing and construction firm based in Tulsa, Oklahoma. Ellsworth operates a hot-mix asphalt plant in Broken ...
Business Operations and StrategyPrivate Placements and Financing
Construction Partners Amends Term Loan, Adds Incremental Financing
Positive
Jun 18, 2026
On June 18, 2026, Construction Partners, Inc. and its lending syndicate amended the company’s Term Loan B Credit Agreement, refinancing all outstanding term loans to lower interest rate margins and adding $300 million of incremental term loa...
Business Operations and StrategyStock BuybackPrivate Placements and Financing
Construction Partners Expands Credit Facility and Financial Flexibility
Positive
Jun 8, 2026
On June 3, 2026, Construction Partners and its lending group executed a sixth amendment to the company’s Third Amended and Restated Credit Agreement, boosting the revolving credit facility from $500 million to $700 million and revising key f...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.