Construction Partners (ROAD) AI Stock Analysis

• Market Cap: $7.24B
• Dividend Yield: N/A
• Average Volume (3M): 516.76K
• Price to Earnings (P/E): 94.3
• Beta (1Y): 1.59
• Revenue Growth: 39.18%
• EPS Growth: 1.79%
• Country: US
• Employees: 1,325
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 0.81
• Shares Outstanding: 47,551,945
• 10 Day Avg. Volume: 495,869
• 30 Day Avg. Volume: 516,762
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.01
• Enterprise Value/Revenue: 2.98
• Enterprise Value/Gross Profit: 20.07
• Enterprise Value/Ebitda: 26.05
• 1Y Price Target: $117.33
• Price Target Upside: -8.29% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4

• Rating: 76 Outperform
• Price Target: $137.00 ▲(7.08% Upside)

Construction Partners demonstrates strong financial performance and technical momentum, supported by strategic acquisitions and a robust earnings call. However, high leverage and a high P/E ratio suggest caution. The stock's upward trend and operational efficiency are significant positives, but valuation concerns and potential overbought conditions warrant careful monitoring.

Positive Factors

Revenue Growth

The significant revenue growth, driven by both organic expansion and strategic acquisitions, underscores the company's ability to capture market opportunities and expand its footprint, which is crucial for long-term success in the construction industry.

Successful Acquisition Strategy

The acquisition strategy enhances market presence and operational capabilities, providing a competitive edge through increased scale and integration, essential for sustained growth in the competitive construction sector.

Healthy Backlog

A strong backlog indicates robust demand and revenue visibility, ensuring steady cash flow and operational stability, which are vital for long-term strategic planning and investment in infrastructure projects.

Negative Factors

High Leverage

High leverage can constrain financial flexibility and increase risk, especially in volatile markets, potentially impacting the company's ability to invest in growth opportunities or weather economic downturns.

Weather-Related Delays

Weather-related delays can disrupt project timelines and increase costs, affecting profitability and operational efficiency, which are critical for maintaining competitive advantage in the construction industry.

Cash Flow Constraints

Cash flow constraints can limit the company's ability to fund operations and growth initiatives, potentially impacting its capacity to capitalize on market opportunities and sustain long-term growth.

Construction Partners Business Overview & Revenue Model

Company Description

Construction Partners (ROAD) is a leading asphalt paving and construction company specializing in the production and placement of asphalt for highways, roads, and various infrastructure projects. Operating primarily in the southeastern United States, the company provides services that include asphalt production, paving, and road construction, catering to both public and private sector clients. With a strong commitment to quality and sustainability, Construction Partners leverages advanced technology and skilled labor to deliver high-performance solutions in the construction industry.

How the Company Makes Money

Construction Partners generates revenue primarily through contracts for asphalt paving and road construction projects. The company earns money by bidding on and securing contracts with governmental agencies, municipalities, and private developers for the construction and maintenance of roads and infrastructure. Key revenue streams include the sale of asphalt products produced at its plants and the execution of construction services. Additionally, strategic partnerships with local governments and other construction firms enhance their project opportunities and expand their service offerings. Factors contributing to its earnings include the demand for infrastructure development, government funding for transportation projects, and the company's operational efficiency in managing costs and resources.

Construction Partners Financial Statement Overview

Summary

Construction Partners shows strong financial performance with impressive revenue growth and profitability. Operational efficiency is evident, but high leverage poses potential risks. Cash flow generation is robust, supporting future growth and stability.

Income Statement

Construction Partners has demonstrated strong revenue growth with an 11.94% increase in the TTM period, supported by a healthy gross profit margin of 14.85%. The net profit margin is stable at 3.04%, indicating effective cost management. EBIT and EBITDA margins have improved, reflecting operational efficiency. Overall, the company shows robust growth and profitability trends.

Balance Sheet

The balance sheet reveals a high debt-to-equity ratio of 1.76, indicating significant leverage, which could pose risks in volatile markets. However, the return on equity remains reasonable at 9.79%, suggesting effective use of equity. The equity ratio is moderate, showing a balanced asset structure.

Cash Flow

The cash flow statement highlights a strong free cash flow growth of 21.10% in the TTM period, indicating improved cash generation. The operating cash flow to net income ratio is below 1, suggesting potential cash flow constraints, but the free cash flow to net income ratio of 0.56 shows a positive cash conversion cycle.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.45B	1.82B	1.56B	1.30B	910.74M	785.68M
Gross Profit	363.81M	258.25M	196.38M	139.30M	119.94M	122.21M
EBITDA	280.24M	111.24M	157.13M	99.13M	84.48M	92.85M
Net Income	74.52M	68.94M	49.00M	21.38M	20.18M	40.30M
Balance Sheet
Total Assets	2.93B	1.54B	1.22B	1.10B	806.62M	628.11M
Cash, Cash Equivalents and Short-Term Investments	114.34M	74.69M	48.24M	35.53M	57.25M	148.32M
Total Debt	1.50B	553.25M	390.73M	389.83M	222.87M	99.65M
Total Liabilities	2.07B	968.39M	703.09M	639.64M	397.72M	242.92M
Stockholders Equity	853.33M	573.74M	516.57M	455.88M	408.90M	385.19M
Cash Flow
Free Cash Flow	152.81M	121.15M	59.35M	-52.35M	-7.83M	52.60M
Operating Cash Flow	275.22M	209.08M	157.16M	16.50M	48.50M	105.17M
Investing Cash Flow	-1.14B	-307.58M	-143.37M	-197.33M	-263.41M	-79.36M
Financing Cash Flow	924.26M	126.11M	-264.00K	159.14M	123.85M	41.89M

Construction Partners Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 127.94
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ROAD, the sentiment is Positive. The current price of 127.94 is above the 20-day moving average (MA) of 125.30, above the 50-day MA of 115.19, and above the 200-day MA of 95.18, indicating a bullish trend. The MACD of 4.53 indicates Positive momentum. The RSI at 57.03 is Neutral, neither overbought nor oversold. The STOCH value of 45.45 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ROAD.

Construction Partners Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PRIM	77 Outperform	7.03B	29.55	12.83%	0.23%	15.08%	55.10%
ROAD	76 Outperform	$7.24B	94.29	10.60%	―	39.18%	1.79%
GVA	74 Outperform	4.77B	36.44	12.45%	0.48%	7.18%	77.84%
STRL	73 Outperform	10.47B	36.80	32.32%	―	3.31%	76.94%
KBR	72 Outperform	6.38B	16.89	24.55%	1.37%	12.59%	98.20%
FLR	62 Neutral	7.07B	1.75	69.52%	―	3.62%	943.43%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Construction Partners Corporate Events

Construction Partners Acquires Two Companies in Houston Expansion

On August 4, 2025, Construction Partners, Inc. announced the acquisition of Durwood Greene Construction Co. and G&S Asphalt, Inc., expanding its operations in the Houston metro area with three new hot-mix asphalt plants. This acquisition, led by experienced management, is expected to enhance operational excellence and provide vertical integration opportunities, aligning with the company’s strategy to capitalize on Texas’s economic growth and infrastructure development.

Construction Partners Amends Credit Agreement for Expansion

On June 30, 2025, Construction Partners, Inc. and its subsidiaries amended their existing credit agreement, increasing their revolving credit facility to $500 million and term loan facility to $600 million. The amendment also introduced new financial covenants and extended the maturity date to June 28, 2030, potentially enhancing the company’s financial flexibility and operational capacity.