Sterling Infrastructure, Inc. (NASDAQ:STRL), might not be a large cap stock, but it saw a decent share price growth of 16% on the NASDAQGS over the last few months. The recent rally in share prices has nudged the company in the right direction, though it still falls short of its yearly peak. As a US$3.6b market cap stock, it seems odd Sterling Infrastructure is not more well-covered by analysts. However, this is not necessarily a bad thing given that there are less eyes on the stock to push it closer to fair value. Is there still an opportunity to buy? Today we will analyse the most recent data on Sterling Infrastructure’s outlook and valuation to see if the opportunity still exists.

Check out our latest analysis for Sterling Infrastructure

Is Sterling Infrastructure Still Cheap?

According to our valuation model, Sterling Infrastructure seems to be fairly priced at around 14% below our intrinsic value, which means if you buy Sterling Infrastructure today, you’d be paying a fair price for it. And if you believe the company’s true value is $137.85, then there’s not much of an upside to gain from mispricing. Although, there may be an opportunity to buy in the future. This is because Sterling Infrastructure’s beta (a measure of share price volatility) is high, meaning its price movements will be exaggerated relative to the rest of the market. If the market is bearish, the company’s shares will likely fall by more than the rest of the market, providing a prime buying opportunity.

Can we expect growth from Sterling Infrastructure?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. Sterling Infrastructure's earnings over the next few years are expected to increase by 27%, indicating a highly optimistic future ahead. This should lead to more robust cash flows, feeding into a higher share value.

What This Means For You

Are you a shareholder? It seems like the market has already priced in STRL’s positive outlook, with shares trading around its fair value. However, there are also other important factors which we haven’t considered today, such as the financial strength of the company. Have these factors changed since the last time you looked at the stock? Will you have enough confidence to invest in the company should the price drop below its fair value?