On Monday, Dycom Industries (NYSE:DY) received an updated stock price target from KeyBanc, where the firm raised its forecast to $169.00 from the previous target of $158.00. The Overweight rating on the company's stock remains unchanged. The adjustment reflects a higher valuation multiple of 9.5 times the expected fiscal year 2026 EBITDA, an increase from 9.0 times.
The firm's analyst pointed out that despite the price target increase, their earnings estimates for Dycom Industries have not been revised. The new price target is based on the applied 9.5 times enterprise value to EBITDA (EV/EBITDA) multiple on the forecasted adjusted EBITDA for the fiscal year 2026.
Dycom Industries, which specializes in contracting services, is currently trading at a discount compared to its peers in the Specialty Engineering and Construction (E&C) group. With a stock price of $150.57, Dycom is trading at an 8.6 times multiple on the firm's projected EBITDA for FY2026, representing a 4 times discount relative to the Specialty E&C sector.
KeyBanc's assessment underscores the potential undervaluation of Dycom's stock in comparison to industry counterparts. The firm's analysis suggests room for growth in the stock's valuation, as indicated by the raised price target.
Investors have taken note of this new valuation, with Dycom Industries' shares reacting positively to the updated price target. The Overweight rating suggests that KeyBanc views the company's stock as a favorable investment compared to the average equity in the analyst's coverage universe.
InvestingPro Insights
As Dycom Industries (NYSE:DY) captures the attention of investors with its updated price target from KeyBanc, a closer look at the company's financial metrics and InvestingPro Tips can provide a deeper understanding of its market position.
The company's market capitalization stands at a robust $4.44 billion, with a Price/Earnings (P/E) ratio of 20.49, indicating a valuation that may be attractive relative to its near-term earnings growth. Moreover, Dycom's Price/Book ratio of 4.2, alongside a solid revenue growth of 9.64% over the last twelve months as of Q4 2024, underscores the company's financial health and potential for further expansion.
InvestingPro Tips suggest that Dycom is trading near its 52-week high, reflecting strong investor confidence and a significant price uptick over the last six months. The company's shares have seen a remarkable 80.95% return over this period, emphasizing the positive trend in its stock performance.
Dycom's liquid assets exceed its short-term obligations, providing a stable financial cushion for the company. Notably, analysts predict that Dycom will be profitable this year, a sentiment that aligns with the company's performance over the last twelve months.
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