Sterling Infrastructure STRL is rapidly emerging as one of the biggest beneficiaries of the U.S. buildout of data centers and advanced manufacturing. The company's first-quarter 2026 results highlighted the strength of this trend, with E-Infrastructure revenues surging 174% year over year, driven by robust demand for site development services, contributions from the CEC acquisition and continued momentum in mission-critical projects. The business also delivered strong margin expansion, reflecting disciplined project selection and solid execution.
The growth story extends beyond a single quarter. Sterling ended the first quarter with a signed backlog of $3.8 billion and a combined backlog of $5.15 billion, while its total opportunity pool, including unsigned awards and future project phases, approached $6.5 billion.
Management noted that more than 90% of E-Infrastructure backlog is tied to mission-critical markets such as data centers, semiconductor fabrication and advanced manufacturing, providing strong visibility into future revenues. The company also secured the first phase of a large semiconductor fabrication campus, opening another long-term growth avenue.
Sterling is broadening its geographic reach. The acquisition of Stone Ridge Contracting expands its site development capabilities into the Pacific Northwest while strengthening its presence in high-growth data center and industrial markets. Stone Ridge is expected to generate $180-$200 million in 2026 revenues, with the EBITDA margin in the mid-teens, supporting Sterling's long-term expansion strategy.
The key risk is execution. Sustaining triple-digit growth will require Sterling to manage labor, project complexity and integration while maintaining margins. However, with rising demand, a record pipeline and an expanding geographic footprint, Sterling appears well-positioned to continue winning large infrastructure projects.
Here’s How Sterling Is Positioned Against Industry Peers
Sterling faces competition from EMCOR Group EME and Comfort Systems USA FIX, two companies benefiting from the rapid expansion of data centers, semiconductor facilities and other mission-critical infrastructure.
EMCOR has built a strong position in electrical and mechanical construction services for complex commercial and industrial projects. While it has extensive nationwide capabilities and long-standing customer relationships, Sterling differentiates itself through large-scale site development and integrated infrastructure services that are increasingly winning hyperscale data center projects. As AI-related capital spending grows, EMCOR remains a formidable rival in securing high-value infrastructure contracts.
Comfort Systems is another close competitor, specializing in mechanical, electrical and plumbing services for data centers, manufacturing facilities and advanced industrial projects. Comfort Systems continues to expand through acquisitions and strong project execution, strengthening its presence in mission-critical markets. However, Sterling's combination of site development, electrical capabilities and growing semiconductor exposure provides a broader infrastructure offering. As customers seek fewer, larger contractors capable of handling complex projects, Sterling, Comfort Systems and EMCOR are likely to remain among the key beneficiaries of long-term AI and infrastructure investment.
STRL Stock’s Price Performance & Valuation Trend
Shares of this Texas-based infrastructure services provider have gained 118.4% year to date, outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index, as shown below.
STRL’s YTD Price Performance
Image Source: Zacks Investment Research
The STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 29.41, as shown in the chart below.
STRL Valuation - P/E (F12M)
Image Source: Zacks Investment Research
Earnings Estimate Revision of STRL
STRL’s earnings estimates for 2026 and 2027 have moved upward in the past 60 days to $19.12 and $25.83 per share, respectively. The revised estimates for 2026 and 2027 imply year-over-year growth of 75.7% and 35.1%, respectively.
Image Source: Zacks Investment Research
Sterling currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
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This article originally published on Zacks Investment Research (zacks.com).