Chicago, IL – April 2, 2025 – Zacks Equity Research shares Sterling Infrastructure's STRL as the Bull of the Day and AppFolio APPF as the Bear of the Day. In addition, Zacks Equity Research provides analysis on NVIDIA Corp. NVDA, Interactive Brokers Group, Inc. IBKR and Robinhood Markets, Inc. HOOD.
Here is a synopsis of all five stocks:
As a cornerstone to advancing infrastructure in the United States, Sterling Infrastructure's stock looks poised for a sharp rebound amid recent market volatility.
Reassuringly, this year's pullback in Sterling Infrastructure's stock appears to be a healthy correction considering STRL has skyrocketed +2,300% over the last decade.
That said, more upside appears to be ahead as the E-infrastructure, transportation, and building solutions company has added to its impressive backlog.
1. E-Infrastructure Solutions: Sterling Infrastructure focuses on large-scale site development for next-generation manufacturing, data centers, e-commerce distribution centers, and energy projects. The segment is its fastest-growing and most profitable, addressing critical needs in modern infrastructure.
This includes a $325 million contract for the Hyundai Engineering America facility in Georgia which is aimed at boosting the production of EVs and hybrid cars, covering over 600 acres, and is the largest E-Infrastructure project in the company's history. In addition to this, advancements in artificial intelligence have driven the need for Sterling Infrastructure's data center solutions, with contract rewards of over $300 million as well.
2. Transportation Solutions: Sterling Infrastructure is involved in constructing and rehabilitating highways, roads, bridges, airports, ports, and water systems. These projects are essential for improving connectivity and supporting economic growth.
3. Building Solutions: The company also provides concrete foundation services for residential and commercial buildings, helping to meet housing and urban development demand.
Entering 2025, Sterling Infrastructure had a combined backlog of $1.83 billion and was recently awarded an interstate roadway project with the Utah Department of Transportation (UDOT) in February. The project is expected to begin this spring and will continue through 2027 and has a total value of $195 million with Sterling Infrastructure having a 60% interest through its subsidiary Ralph L. Wadsworth (RLW).
Notably, RLW is also embarking on the next phase of a multi-year project with the Colorado Department of Transportation (CDOT) which has an award of $86 million.
Coming off a fifth consecutive year of record top and bottom-line growth, Sterling Infrastructure's total sales are expected to dip 4% in fiscal 2025 but are projected to rebound and rise 8% in FY26 to $2.2 billion.
Alluding to Sterling Infrastructure's impressive operating efficiency is that despite projections of a modest dip in sales this year, annual earnings are expected to soar 34% to $8.21 per share compared to EPS of $6.10 in FY24. Plus, FY26 EPS is projected to pop another 14% to $9.37.
Correlating with bullish sentiment is that over the last 60 days, FY25 and FY26 EPS estimates have soared 29% and 32%, respectively.
Underlying financial factors that point to STRL as a viable long-term investment are that Sterling Infrastructure achieved record gross margins of more than 20% last year and a peak in operating cash flow at $500 million.
While investors may have gotten the jitters to invest in a stock that continued to climb with little interruption, the pullback in STRL certainly looks like a healthy correction. To that point, STRL is trading 45% below its 52-week and record high of $206 a share, which it hit in January.
Furthermore, at around $115, STRL trades at 13.8X forward earnings. This is well below its decade-long high of 52.3X and is on par with a median of 13.3X during this period. Trading at a discount to the S&P 500's 21.2X forward earnings multiple, Sterling Infrastructure's stock also trades beneath its Zacks Engineering-R and D Services Industry average of 16.9X with some of the other notable names in the space being Fluor Corporation and AECOM.
Sporting a Zacks Rank #1 (Strong Buy) and landing the Bull of the Day, Sterling Infrastructure's stock may be one of the best buy-the-dip prospects to consider at the moment. This is evident in the compelling trend of positive earnings estimate revisions, especially with STRL trading at a much more reasonable P/E valuation.
With the Nasdaq dwelling in correction territory, AppFolio appears to be a tech stock that investors may want to avoid at the moment.
As a cloud-based software provider for the real estate industry, AppFolio's exposure to higher tariffs might be limited but increased competition from a number of private and public competitors' have contributed to investor caution along with fluctuations in demand for property management solutions.
Now may be an ideal time to take profits in AppFolio's stock which is down 10% in 2025 but is still sitting on +90% gains over the last three years to top the +20% gains of the broader indexes and its Zacks Internet-Software Market.
While AppFolio is still expected to post 20% EPS growth in fiscal 2025 and FY26, it's noteworthy that earnings estimate revisions are down in the last 60 days. This trend has become evident for its primary competitor CoStar Group as well.
Pictured below is the Consensus EPS trend for AppFolio with some of its private market competitors being up-and-coming property management software providers such as RealPage and Yardi Systems.
The decline in EPS estimates doesn't necessarily scream sell but APPF is trading over $220 and at 40.9X forward earnings with investors getting increasingly cautious of the premium they are paying for stocks, even with high-growth tech companies.
In this regard, APPF still trades at a noticeable premium to the benchmark S&P 500's 21.2X forward earnings multiple and its Zacks Internet-Software Industry average of 26.2X.
Simply put, the hype for AppFolio's stock may wear thin as more property management solution providers enter the market. Keeping this in mind, it would be no surprise if a further drop in APPF is still ahead, especially as the Nasdaq grapples with correction territory.
The cryptocurrency market didn't have a great first quarter after a stellar 2024. Bitcoin (BTC), the world's most popular cryptocurrency, has seen a steep decline in the past month, with its price retreating sharply from its all-time high by more than 25%.
Rising inflation, coupled with President Donald Trump's proposed tariffs on several trading partners of the United States, has raised fears of taking a massive toll on the economy's health. The fears of a recession have seen investors rushing to safe-haven stocks lately. However, Bitcoin still has a lot of potential and once the ongoing trade tensions ease and inflation cools, the cryptocurrency will resume its rally.
Given this scenario, it would be ideal to adopt the buy-the-dip approach. It would thus be ideal to add bitcoin-centric stocks like NVIDIA Corp., Interactive Brokers Group, Inc. and Robinhood Markets, Inc. to your portfolio. Each of these stocks has strong growth potential for 2025 and has seen positive earnings estimate revisions in the last 60 days.
Bitcoin has given up almost all the gains it made immediately after Trump's victory in the Presidential election. The cryptocurrency hit an all-time high of $106,533 on Dec. 22. However, it has since failed to hold on to the momentum. Bitcoin has retreated sharply over the past month and was hovering around $83750 on Monday.
The decline comes as fears of a trade war continue to escalate following Trump's announcement of hefty tariffs on several countries. The President last week announced 25% tariffs on all imported cars and light trucks, which go into effect on April.
Also, Trump has already announced 25% reciprocal tariffs on imports from Canada and Mexico, which will also go into effect on Wednesday. Besides, a 10% tariff on Chinese goods is already in place.
However, Trump also said last week that the tariffs will be flexible and narrower in scope and he may give some countries a break from the reciprocal tariffs. Also, sector-specific tariffs could be delayed further. This has eased some of the fears but investors are yet to get a clearer picture of how the situation will shape up in the near term.
The Bitcoin rally in the final quarter of 2024 was also largely triggered by the decline in inflation as the Federal Reserve started its easing cycle with a 100-basis-point rate cut between September and December.
However, the Fed has since paused its rate cuts after inflation showed signs of increasing. The Federal Reserve has since adopted a cautious approach and is unlikely to go for a rate cut before the second half of the year.
However, Federal Reserve Chairman Jerome Powell said at the end of the March FOMC meeting that the central bank still plans two rate cuts this year. Higher interest rates for a longer period can negatively affect cryptocurrencies by reducing investor appetite for riskier assets, raising the opportunity cost of holding non-yielding assets like Bitcoin, and strengthening the U.S. dollar, which often puts pressure on the crypto market.
Bitcoin's recent decline can be attributed to the uncertainty over the ongoing trade turmoil and steep inflation. The cryptocurrency is bound to resume its rally once these tensions ease.
Moreover, Bitcoin has historically reached new record highs every four years, following bullish trends since 2017. In the past cycles, it surged by 2,300% and 1,700%, only to experience corrections of 70% to 80%. After hitting a low of $16,000 in early 2023, Bitcoin has risen by almost 600%, indicating strong growth potential moving forward.
NVIDIA
NVIDIA Corporation is a major player in the semiconductor industry and has been one of the standout success stories of 2023. As a leading designer of graphic processing units (GPUs), the value of the NVDA stock tends to surge in a thriving crypto market. This is primarily due to the crucial role that GPUs play in data centers, artificial intelligence and the mining or production of cryptocurrencies.
NVIDIA's expected earnings growth rate for the current year is 48%. The Zacks Consensus Estimate for current-year earnings has improved 4.8% over the last 60 days. Currently, NVIDIA has a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
Interactive Brokers Group
Interactive Brokers Group, Inc. is a global automated electronic broker. IBKR executes, processes and trades in cryptocurrencies. IBKR's commodities futures trading desk also offers customers a chance to trade cryptocurrency futures.
Interactive Brokers Group has an expected earnings growth rate of 1.3% for the current year. The Zacks Consensus Estimate for current-year earnings has improved 1.3% over the last 60 days. IBKR currently has a Zacks Rank #2.
Robinhood Markets
Robinhood Markets, Inc. operates a financial services platform in the United States. Its platform allows users to invest in stocks, exchange-traded funds, options, gold and cryptocurrencies. HOOD buys and sells Bitcoin, Ethereum, Dogecoin and other cryptocurrencies using its Robinhood Crypto platform.
Robinhood Markets' expected earnings growth rate for the current year is 36.7%.The Zacks Consensus Estimate for current-year earnings has improved 26.3% over the last 60 days. Robinhood Markets currently has a Zacks Rank #2.
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Interactive Brokers Group, Inc. (IBKR) : Free Stock Analysis Report
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Robinhood Markets, Inc. (HOOD) : Free Stock Analysis Report
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