Construction and construction materials company Granite Construction (NYSE:GVA) missed Wall Street’s revenue expectations in Q1 CY2025 as sales rose 4.1% year on year to $699.5 million. On the other hand, the company’s outlook for the full year was close to analysts’ estimates with revenue guided to $4.3 billion at the midpoint. Its non-GAAP profit of $0.01 per share was significantly above analysts’ consensus estimates.
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Granite Construction (GVA) Q1 CY2025 Highlights:
StockStory’s Take
Granite Construction’s first quarter results reflected a blend of margin improvement and continued project portfolio transformation, with management attributing the quarter’s performance to improved project execution and a focus on higher-quality work. CEO Kyle Larkin noted that adverse weather slowed some activity in March, yet the company achieved higher construction segment margins and grew its backlog (CAP), supported by federal infrastructure funding and strong bidding momentum. Management also highlighted progress in its Materials segment, emphasizing investments in automation and plant upgrades as key contributors to profit gains and operational resilience.
Looking forward, management reaffirmed its full-year outlook, underpinned by expectations for a robust public sector pipeline and a healthy mix of upcoming projects. Larkin pointed to ongoing support from the Infrastructure Investment and Jobs Act (IIJA), suggesting that “opportunities funded by the bill continue to increase because of the timing delay between allocations to states and funding for specific projects.” While management acknowledged uncertainties around tariffs and equipment costs, they expressed confidence in their ability to mitigate these headwinds and sustain growth through a disciplined approach to bidding, risk management, and targeted M&A.
Key Insights from Management’s Remarks
Granite Construction’s management focused on strategic execution improvements and investments in core capabilities as key drivers of the quarter’s performance and margin gains.
Drivers of Future Performance
Management’s outlook for the remainder of the year is anchored by anticipated public infrastructure investment, targeted Materials segment growth, and ongoing margin improvement initiatives.
Top Analyst Questions
Catalysts in Upcoming Quarters
In upcoming quarters, the StockStory team will focus on (1) tracking margin trends in both Construction and Materials segments as project execution and price initiatives take hold, (2) monitoring progress on targeted M&A, particularly any materials-focused acquisitions that could reshape the business mix, and (3) assessing the impact of public infrastructure funding, including the timing and flow of IIJA-related projects. Any changes in tariff exposure or significant weather disruptions will also be key factors influencing Granite Construction’s operational and financial trajectory.
Granite Construction currently trades at a forward EV-to-EBITDA ratio of 8×. Is the company at an inflection point that warrants a buy or sell? Find out in our free research report .
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