Sterling Infrastructure, Inc. STRL has been witnessing strength in the data centers and manufacturing work demand for some time now, but since 2025, it has started to see a rebound in the e-commerce distribution space. In the second quarter of 2025, the backlog growth in the e-commerce space was about 700% year over year.
The emerging opportunities for STRL’s e-commerce distribution work strengthen its long-term prospects, diversifying the revenue stream, which is necessary given an uncertain economic scenario. The primary contributor to this uptrend in backlog and a healthy pipeline is projects from Amazon. Amazon has been a key client for Sterling, and its several warehousing and large-scale distribution facilities expansion work has boosted optimism in STRL. Amazon is focusing on building a bigger, four-storied warehouse, favoring STRL’s revenue per project, given the large project scope.
Currently, Sterling is engaged in bidding activity for these and other e-commerce projects, which is expected to continue through 2026. Also, the company expects that through its bidding activity, it will be able to win about nine e-commerce distribution projects this year, strengthening its pipeline for the long term and fueling revenue visibility.
The e-commerce distribution space is included in STRL’s E-Infrastructure Solutions segment, alongside data centers and manufacturing. Robust market trends for projects across these spaces in the market have boosted the company in laying out an incremental outlook for this segment. For 2025, Sterling expects the E-Infrastructure Solutions segment’s revenues to grow year over year between 18% and 20%, with adjusted operating profit margins anticipated in the mid to high 20% range.
Sterling’s Competition Position in Infrastructure Demand
Sterling is strengthening its position in the engineering and infrastructure construction space, but is not standing alone. It faces substantial competition from other key market players, including MasTec Inc. MTZ and AECOM ACM.
MasTec represents a key competitor, with a broad portfolio spanning power delivery, renewable energy, communications and industrial site development. Like STRL, MasTec has benefited from secular demand in energy transition and large-scale infrastructure, though its revenue mix is more diversified across utilities and communications.
AECOM, another major rival, competes at a global scale, offering engineering, consulting and construction services across transportation, water and environmental infrastructure. While AECOM is more diversified internationally and less directly concentrated on e-commerce distribution sites, it overlaps with Sterling in high-value site development and complex engineering projects.
STRL Stock’s Price Performance & Valuation Trend
Shares of this Texas-based infrastructure services provider have soared 139.1% in the past six months, significantly outperforming the Zacks Engineering - R and D Services industry, the broader Zacks Construction sector and the S&P 500 Index.
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STRL stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 30.78, as evidenced by the chart below. The overvaluation of the stock compared with its industry peers indicates its strong potential in the market, with the favorable trends backing it up.
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EPS Trend of Sterling
For 2025 and 2026, Sterling earnings estimates have trended upward in the past 60 days to $8.90 and $9.74 per share, respectively. The revised estimated figures imply 45.9% and 9.4% year-over-year growth, respectively.
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The company 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).
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
