Buffett Brain · Research note
Score updated 27 Oct 2026 · analysis from 18 Jun 2026
STRL· Industrials
Sterling Infrastructure
Sterling Infrastructure's strong growth and solid financial health contrast sharply with its high valuation and weak moat, making it a cautious watch.
Buffett fit
Partial fit
Owner
36
Durability
100
Management
83
Price
0
Score updated 27 Oct 2026 · analysis from 18 Jun 2026
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Sterling Infrastructure, I would focus on leveraging its strong revenue growth, which has a 5-year CAGR of 15.19%.
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The 10-year outlook for Sterling Infrastructure appears solid, given its 100% profitability over the past five years.
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Management has demonstrated a commitment to shareholder value with a 1.66% share count CAGR over the last five years, but the yield of only 0.11% indicates limited capital returned to shareholders.
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Currently, the owner's earnings yield of 1.33% is far below the 8-10% target, indicating that the stock is overvalued.
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- The 5-year price target and the return it implies
- What would change the call
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of 21.5% exceeds the sector top-quintile cutoff of 13.6%, indicating strong capital efficiency.
- 2Five-year EPS CAGR of 44.32% shows impressive earnings growth potential.
- 3Interest coverage ratio of 26.4 suggests excellent ability to meet interest obligations.
- 4 of $362.68M indicates sufficient liquidity for operations and growth.
Concerns
5- 1High of 78.6 indicates that the stock is significantly overvalued compared to historical norms.
- 2 of 22.8% is below the sector top-quintile cutoff of 43.4%, suggesting pricing pressure.
- 3 of 17.0% sits below the sector top-quintile cutoff of 17.8%, indicating competitive challenges.
- 4Lack of a clear raises concerns about long-term competitive advantage in a competitive industry.
Price history
$361+1,400.5%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Sterling Infrastructure operates primarily in the engineering and construction sector, focusing on transportation and building solutions. With a TTM revenue of $2.49B, it undertakes significant infrastructure projects across various states. The company has shown resilience, being profitable in all of the last five years, with an EPS CAGR of 44.32%. This suggests robust unit economics despite the competitive landscape.
How this analysis has moved
The call has held across 6 reviews.
Sep 27, 2026 → Oct 26, 2026
What other investors would say
The same company, judged by three other documented playbooks.
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