DOTHAN, Ala. - Construction Partners, Inc. (NASDAQ: NASDAQ:ROAD), a leading civil infrastructure firm operating in the Southeastern United States, today reported its preliminary financial outcomes for fiscal year 2024, revealing significant growth despite weather-related challenges. The company also provided an optimistic outlook for fiscal year 2025, including the effects of a strategic acquisition.
The company's President and CEO, Fred J. Smith III, highlighted the resilience of the firm's operations, which led to a revenue increase of nearly 17%, a net income surge of over 40%, and an Adjusted EBITDA jump of around 27% compared to the previous fiscal year. The Adjusted EBITDA Margin is expected to settle around 12%, aligning with forecasts.
For fiscal 2024, Construction Partners anticipates revenues between $1.821 billion and $1.825 billion, up from $1.563 billion in fiscal 2023. Net income is projected to be in the range of $68 million to $70 million, a substantial increase from $49 million in the prior year. Adjusted EBITDA is estimated to reach between $219 million and $222 million, with the Adjusted EBITDA Margin hovering between 12.0% and 12.2%.
Looking ahead to fiscal 2025, the company forecasts revenue between $2.420 billion and $2.520 billion, net income between $90 million and $106 million, and Adjusted EBITDA between $338 million and $368 million, with an Adjusted EBITDA Margin of 14.0% to 14.6%. These projections include the expected contributions from the acquisition of Lone Star Paving, a Texas-based asphalt manufacturing and paving company, which is anticipated to close by the end of the first quarter of fiscal 2025.
Smith expressed confidence in the company's growth trajectory and profitability, accelerated by the acquisition of Lone Star Paving. The deal is expected to be immediately accretive to earnings and positions the company to benefit from the robust infrastructure investment in Texas and the Sunbelt region's growing economies.
The company's financial results for fiscal year 2024 are yet to be finalized and are subject to year-end closing procedures and review adjustments. The preliminary financial information is based on a press release statement and has not been audited or reviewed by the company's independent registered public accounting firm.
In other recent news, Construction Partners, Inc. announced the acquisition of Lone Star Paving for $654 million. This strategic move is expected to be immediately accretive to CPI's earnings upon its anticipated closing in Q1FY25, contributing an estimated $530 million in annual revenue and $120 million in Adjusted EBITDA. Additionally, DA Davidson and Baird have raised their price targets for CPI, reflecting a positive outlook for the company's financial performance.
The civil infrastructure firm's recent fiscal third-quarter results exceeded analysts' estimates, leading to an upward revision of the stock target to $55.00. Revenue for the quarter was reported at $517.8 million, up 22.7% year-over-year, surpassing analysts' projections of $503.57 million. The company's project backlog reached a record $1.86 billion at quarter-end, providing visibility into potential future revenue streams.
These developments follow the company's strong fiscal third-quarter performance and the announcement of its entry into the Texas market through the acquisition of Lone Star Paving. The acquisition will expand CPI's portfolio of projects, which currently include roadways, highways, airport runways, and bridges across six southeastern states. As these recent developments unfold, investors are keenly watching the company's progress.
InvestingPro Insights
Construction Partners, Inc. (NASDAQ: ROAD) has demonstrated impressive financial performance, as reflected in both its preliminary fiscal 2024 results and its optimistic outlook for fiscal 2025. This positive trajectory is further supported by real-time data and insights from InvestingPro.
According to InvestingPro data, ROAD's revenue for the last twelve months as of Q3 2024 stood at $1.76 billion, with a robust revenue growth of 18.84%. This aligns closely with the company's reported revenue increase of nearly 17% for fiscal 2024. The company's strong performance is also evident in its market capitalization, which currently stands at $3.94 billion.
InvestingPro Tips highlight that ROAD is trading at a low P/E ratio relative to its near-term earnings growth, with a PEG ratio of 0.45. This suggests that the stock may be undervalued considering its growth prospects, which is particularly relevant given the company's positive outlook and strategic acquisition plans.
The company's profitability is underscored by another InvestingPro Tip, which notes that ROAD has been profitable over the last twelve months. This is consistent with the reported net income surge of over 40% in the fiscal 2024 preliminary results.
It's worth noting that ROAD has shown a strong return over various time frames. The stock has delivered a remarkable 95.65% return over the past year and is currently trading near its 52-week high, with its price at 97.34% of the 52-week high. This performance aligns with the company's reported financial growth and positive future outlook.
For investors seeking more comprehensive insights, InvestingPro offers 17 additional tips for ROAD, providing a deeper understanding of the company's financial health and market position.
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