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Construction Partners
(NASDAQ:ROAD)
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Rating:65Neutral
Price Target:
$98.00
▼(-10.99% Downside)
Action:Reiterated
Date:10/05/26
The score is anchored by improving fundamentals (strong growth, better profitability, positive TTM free cash flow) and a constructive earnings outlook with raised guidance and record backlog. It is held back by balance-sheet leverage and uneven cash conversion, while the technical picture remains notably weak (below key moving averages with negative MACD). Valuation is also demanding at ~35.6x earnings without a stated dividend yield to offset the premium.
Positive Factors
Strong revenue and earnings growth
Rapid organic and acquisitive growth is expanding Construction Partners’ operating scale and market reach. Raised full-year guidance indicates management expects momentum to persist, supporting greater earnings power and additional capacity to reinvest in regional expansion over the next several quarters.
Negative Factors
Elevated leverage
Leverage remains above management’s stated target, increasing sensitivity to project-cycle weakness, cost inflation, or slower infrastructure activity. Debt service and refinancing requirements can constrain financial flexibility, leaving less capacity for acquisitions, capital investment, or absorbing execution volatility.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong revenue and earnings growth
Rapid organic and acquisitive growth is expanding Construction Partners’ operating scale and market reach. Raised full-year guidance indicates management expects momentum to persist, supporting greater earnings power and additional capacity to reinvest in regional expansion 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
$4.89B
Dividend YieldN/A
Average Volume (3M)582.90K
Price to Earnings (P/E)33.7
Beta (1Y)1.47
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. Volume660,608
30 Day Avg. Volume582,901
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 Cap1.73
Enterprise Value/Revenue2.44
Enterprise Value/Gross Profit15.43
Enterprise Value/Ebitda20.08
Forecast
1Y Price Target
$133.33Price Target Upside21.10% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)3.82
Revenue Forecast (FY)$4.08B
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 work under contract and recognizing revenue as it satisfies performance obligations on those projects. Its core revenue stream comes from building, improvi...
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
102.37
Negative
106.32
Negative
113.02
Negative
Market Momentum
-3.86
Positive
34.37
Neutral
15.67
Positive
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 above the 20-day moving average (MA) of 91.81, above the 50-day MA of 102.37, and below the 200-day MA of 113.02, indicating a bearish trend. The MACD of -3.86 indicates Positive momentum. The RSI at 34.37 is Neutral, neither overbought nor oversold. The STOCH value of 15.67 is Positive, 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 |
|---|---|---|---|---|---|---|---|
76 Outperform | $15.33B | 35.72 | 36.67% | ― | 60.83% | 51.23% | |
74 Outperform | $4.39B | 35.40 | 10.13% | 0.32% | 24.70% | ― | |
65 Neutral | $4.89B | 33.66 | 14.61% | ― | 41.92% | 85.09% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
59 Neutral | $4.46B | 32.09 | 8.46% | 0.39% | 5.12% | -42.27% | |
58 Neutral | $4.92B | -29.83 | -16.01% | 0.46% | 21.80% | -204.13% | |
49 Neutral | $116.98M | -6.11 | 30.27% | ― | -15.98% | 73.32% |
* Industrials Sector Average
ROAD
Construction Partners
86.18
-37.65
-30.40%
GVA
Granite Construction
112.47
5.79
5.42%
PRIM
Primoris Services
82.79
-57.37
-40.93%
STRL
Sterling Infrastructure
501.19
139.75
38.66%
TPC
Tutor Perini
83.49
20.44
32.42%
SHIM
Shimmick Corporation
2.83
0.41
16.94%
Construction Partners Corporate Events
Business Operations and StrategyM&A Transactions
Construction Partners expands Texas footprint with strategic acquisition
Positive
Oct 5, 2026
On October 5, 2026, Construction Partners, Inc. announced it had completed the acquisition of the asphalt manufacturing and construction assets of J.H. Strain Sons, Inc., an asphalt paving and manufacturing company based in Tye, Texas. The deal a...
Business Operations and StrategyM&A Transactions
Construction Partners Expands Florida Operations With Roads Acquisition
Positive
Sep 21, 2026
On September 21, 2026, Construction Partners, Inc. announced the completion of its acquisition of Roads, Inc. of NWF, an asphalt manufacturing and construction business based in Cantonment, Florida. Roads, Inc. provides asphalt paving, roadway con...
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 ...
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.