Dec. 4 at 10:02 PM
$STRL has quietly gone from boring road builder to one of my favorite AI infrastructure “picks & shovels.”
Years ago it was low-bid highways at 9x EBITDA. Now the crown jewel is E-Infrastructure: site prep + power + electrical work for hyperscale data centers, chip fabs, and big industrial projects. That mix shift is why margins have tripled and ROIC is in the high-20s.
Backlog (incl. unsigned awards) is >
$3B and heavily skewed to data-center work. Balance sheet is basically net cash even after M&A.
I’m modeling strong-but-sane growth in E-Infra, slower in the legacy segments, some margin expansion, and conservative capex. My DCF lands around
$455/share, 35–40% upside from here.
Risks: AI capex slows, a big project goes wrong, or regulators choke power builds. But given the execution so far, I still see STRL as a long-term compounder rather than a name to “sell because it’s up.”
If curious, here is the full thesis: https://www.beatingthetide.com/p/investment-thesis-strl-sterling-infrastructure
