Can Sterling's Backlog Strengthen Its Infrastructure Growth Prospects?

Sterling Infrastructure, Inc. STRL has built a larger base of contracted work as demand for data centers, semiconductor facilities and other mission-critical infrastructure remains strong. The expanding backlog could provide support for revenue growth while giving Sterling greater exposure to infrastructure markets with strong demand.

At June 30, 2026, signed backlog increased 116% year over year to $4.3 billion, while combined backlog rose 150% to $5.6 billion. The second-quarter book-to-burn ratio was 1.4x for signed backlog and 1.3x for combined backlog. Sterling also had more than $1.4 billion in high-probability future-phase opportunities. Combined with signed backlog and unsigned awards, the total addressable pool of work exceeded $7 billion.

The composition of this backlog adds to its growth potential. More than 92% of E-Infrastructure signed backlog was tied to mission-critical projects, including data centers, manufacturing facilities and semiconductor campuses. Data center projects are becoming larger, lasting longer and expanding into additional markets. Existing projects are also gaining new phases as customers expand properties, creating potential work beyond current backlog figures. Some projects could extend for five to eight years or longer.

Sterling expects E-Infrastructure revenues to rise more than 100% in 2026, while the legacy site development business is expected to grow around 70% or higher. A larger contracted work base, combined with future-phase opportunities, gives Sterling a solid foundation to convert infrastructure demand into revenues as capacity expands.

Sterling and Its Key Infrastructure Competitors

Sterling competes closely with MasTec, Inc. MTZ and Quanta Services PWR across electrical, mechanical and infrastructure construction. Both companies maintain sizable order books, providing visibility into future revenues and reflecting strong demand across key end markets.

MasTec reported a record backlog of $21.4 billion in the second quarter, up 30% year over year and 5% sequentially. The company recorded a book-to-bill ratio of 1.2x, led by Pipeline Infrastructure and Clean Energy & Infrastructure. Power Delivery, Pipeline Infrastructure and Clean Energy & Infrastructure benefited from demand for grid modernization, power generation, renewables, natural gas and data centers. Clean Energy & Infrastructure revenues increased 43%, while segment backlog rose $500 million sequentially with a 1.3x book-to-bill ratio.

Quanta reported a record backlog of approximately $53.4 billion in the second quarter, up about 49% year over year from $35.8 billion. The backlog reflects demand across utility, generation and technology load center markets. Larger programs and multiyear commitments are also emerging across these markets, which could support revenues over an extended period. Recent acquisitions have added capabilities in electrical, mechanical, civil and fabrication services, further expanding the company’s addressable market.

Sterling, MasTec and Quanta offer strong revenue visibility through sizable order books. STRL benefits from demand across data centers and other mission-critical infrastructure, while MasTec has diversified exposure to power, renewables and data centers. Quanta’s backlog is supported by utility, generation and technology load center projects.

STRL Stock’s Price Performance & Valuation Trend

Shares of this Texas-based infrastructure services provider climbed 40.4% in the past six months, outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.

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STRL stock is currently trading at a discount compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 24.36, as shown in the chart below.

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Earnings Estimate Revision for STRL

STRL’s earnings estimates for 2026 and 2027 have moved upward in the past 30 days to $20.03 and $25.83 per share, respectively. The estimated figures for 2026 and 2027 imply year-over-year growth of 84.1% and 29%, respectively.

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Sterling currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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