Can Sterling's CEC Bet Supercharge Its Mission-Critical Ambitions?

Sterling Infrastructure, Inc.’s STRL acquisition of CEC Facilities Group appears to be strengthening its position in the fast-growing market for mission-critical infrastructure. The specialty electrical and mechanical contractor is helping Sterling broaden its E-Infrastructure capabilities and extend into critical phases of large-scale projects.

CEC delivered 140% revenue growth in the second quarter of 2026 compared with the prior-year period, while its margins strengthened both sequentially and year over year. The business also secured several additional project wins, contributing to a $1.7 billion increase in Sterling’s combined E-Infrastructure backlog since year-end 2025. The acquisition is particularly timely as data center demand continues to accelerate. Management said customer activity is stronger than ever, with projects becoming larger, lasting longer and expanding into more markets.

Existing projects are also growing beyond their original scopes, creating incremental opportunities that are not yet fully reflected in Sterling’s backlog or future-phase estimates. CEC also complements STRL’s site-development expertise, allowing it to offer integrated electrical and site services. Mission-critical projects, including data centers, semiconductor facilities and large manufacturing developments, accounted for more than 92% of E-Infrastructure's signed backlog at the end of the second quarter of 2026.

Sterling expects E-Infrastructure revenues to grow more than 100% in 2026, including CEC and Stone Ridge contributions. With strong demand, expanding capabilities and growing project opportunities, the CEC acquisition could prove instrumental in turning Sterling into an increasingly important player in the mission-critical infrastructure cycle.

Sterling vs. EMCOR & KBR: Who Owns Mission-Critical Growth?

Sterling is positioned to benefit from sustained spending on data centers, semiconductor facilities and large manufacturing projects, alongside other market players including EMCOR Group, Inc. EME and KBR, Inc. KBR.

STRL stands out with its rapidly expanding E-Infrastructure Solutions business, despite its Building Solutions segment facing headwinds from uncertain residential demand. Its integrated site development and electrical capabilities strengthen its positioning across complex projects. Meanwhile, EMCOR brings broad exposure to electrical and mechanical construction, including mission-critical facilities, while KBR benefits from its engineering, technology and government-services capabilities across large-scale infrastructure projects.

Sterling’s focused exposure to data centers, semiconductors and manufacturing provides a compelling growth opportunity as project sizes increase and existing developments expand beyond their initial scopes. With E-Infrastructure revenues expected to grow more than 100% in 2026, Sterling appears particularly well-positioned to capitalize on the ongoing mission-critical construction cycle.

STRL Stock’s Price Performance & Valuation Trend

Shares of this Texas-based infrastructure services provider climbed 53.5% year to date, 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 19.66, 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 $20.06 and $25.81 per share, respectively. The estimated figures for 2026 and 2027 imply year-over-year growth of 84.4% and 28.7%, respectively.

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Sterling stock 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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