Construction Partners, Inc.’s ROAD record $3.14 billion backlog as of the second quarter of fiscal 2026 suggests solid revenue visibility and potential upside for the fiscal year. The backlog increased 10.6% year over year to $2.84 billion, reflecting continued project wins and strong demand across its markets. Management said this backlog covers roughly 80% to 85% of the next 12 months’ contract revenues, giving the company a strong foundation heading into peak construction season.
The upside case is supported by strong demand across both public and private markets. On the public side, Sunbelt infrastructure spending remains healthy, with state and local DOT awards expected to rise 10% to 15% in 2026. On the private side, Construction Partners is benefiting from commercial projects tied to data centers, warehouses and reindustrialization, including approximately $100 million of data center work in Texas and $28 million of warehouse projects in Tennessee.
The expanding backlog is also supporting stronger guidance. Following solid second-quarter fiscal 2026 results, ROAD raised its fiscal 2026 outlook, projecting revenues of $3.59-$3.65 billion versus the prior range of $3.48-$3.56 billion. Adjusted EBITDA guidance was also increased to $552-$564 million from the earlier $534-$550 million range, reflecting confidence in project execution and contributions from recent acquisitions, including Four Star Paving.
Overall, Construction Partners’ backlog is not just increasing but diversified, given it is backed by broad-based demand, Sunbelt exposure, acquisitive growth and strong project visibility. While management noted that backlog can decline sequentially during the busy construction season as work is executed, the company still expects to keep bidding selectively and continue building backlog over time. This supports the view that ROAD’s $3.14 billion backlog could signal further upside ahead.
ROAD Faces Stiff Competition From Sterling & AECOM
Construction Partners is benefiting from strong Sunbelt infrastructure demand, supported by its asphalt-focused model, and exposure to public roadwork, commercial projects, data centers and warehouses. Market competitors like Sterling Infrastructure, Inc. STRL and AECOM ACM are also capitalizing on infrastructure modernization, mission-critical construction and long-term public spending trends.
Sterling has recently delivered exceptional momentum in mission-critical site development. In the first quarter of 2026, revenues surged 92% year over year, adjusted EBITDA more than doubled and margins reached a record 20%. Growth was driven by the E-Infrastructure segment, where revenues climbed 174% on strong hyperscale data center demand, semiconductor-related awards and expanding multi-year customer programs. Sterling’s backlog reached $5.2 billion, including more than $5 billion of visibility within E-Infrastructure alone.
AECOM is a leading solutions provider, offering professional, technical and management services across diverse industries and end markets. The company is benefiting from long-duration infrastructure modernization, environmental projects, transit systems and global urban development initiatives. As of March 31, 2026, the total backlog increased 8% year over year to $26.2 billion. AECOM’s design business delivered a solid 1.2x book-to-burn ratio. This marks the 22nd consecutive quarter with a book-to-burn ratio above 1.0, reflecting sustained demand.
ROAD Stock’s Price Performance & Valuation Trend
Shares of this Alabama-based civil infrastructure company have gained 2.8% year to date, outperforming the Zacks Building Products - Miscellaneous industry, but underperforming the broader Construction sector and the S&P 500 Index.
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ROAD stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 33.45, as the trend lines suggest below.
Image Source: Zacks Investment Research
Earnings Estimate Trend Favors ROAD
ROAD’s earnings estimates for fiscal 2026 and fiscal 2027 have moved upward in the past 30 days to $2.95 and $3.72 per share, respectively. The revised estimates for fiscal 2026 and fiscal 2027 imply year-over-year growth of 34.1% and 25.9%, respectively.
Image Source: Zacks Investment Research
Construction Partners currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
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This article originally published on Zacks Investment Research (zacks.com).