Civil infrastructure construction company Sterling Infrastructure (NASDAQ: STRL) reported Q2 CY2026 results beating Wall Street’s revenue expectations, with sales up 90.1% year on year to $1.17 billion. The company’s full-year revenue guidance of $4.08 billion at the midpoint came in 4.1% above analysts’ estimates. Its non-GAAP profit of $5.80 per share was 11.9% above analysts’ consensus estimates.

Is now the time to buy Sterling? Find out by accessing our full research report, it’s free.

Company Overview

Involved in the construction of a major highway, the Grand Parkway in Houston, TX, Sterling Infrastructure (NASDAQ: STRL) provides civil infrastructure construction.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can have short-term success, but a top-tier one grows for years. Thankfully, Sterling’s 18.9% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Sterling’s annualized revenue growth of 28.9% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Sterling reported magnificent year-on-year revenue growth of 90.1%, and its $1.17 billion of revenue beat Wall Street’s estimates by 14.2%.

Looking ahead, sell-side analysts expect revenue to grow 25.3% over the next 12 months, a deceleration versus the last two years. Despite the slowdown, this projection is admirable and suggests the market is forecasting success for its products and services.

ONE MORE THING: 3 Hidden Platforms Growing 3X Faster than Amazon, Google, and PayPal. Amazon, Google, and Meta all followed the same playbook: Dominate an ignored market. Build an unbeatable moat. Scale until you’re unstoppable.

These three platforms are running that exact playbook right now. The early investors in Amazon made fortunes. The early investors in these could do the same. Get All 3 Stocks Here for FREE.

Operating Margin

Operating margin is one of the best measures of profitability because it tells us how much money a company takes home after procuring and manufacturing its products, marketing and selling those products, and most importantly, keeping them relevant through research and development.

Sterling has been an efficient company over the last five years. It was one of the more profitable businesses in the industrials sector, boasting an average operating margin of 13.1%. This result was particularly impressive because of its low gross margin, which is mostly a factor of what it sells and takes huge shifts to move meaningfully. Companies have more control over their operating margins, and it’s a show of well-managed operations if they’re high when gross margins are low.

Analyzing the trend in its profitability, Sterling’s operating margin rose by 10.3 percentage points over the last five years, as its sales growth gave it immense operating leverage.

In Q2, Sterling generated an operating margin profit margin of 18.8%, up 1.1 percentage points year on year. Since its gross margin expanded more than its operating margin, we can infer that leverage on its cost of sales was the primary driver behind the recently higher efficiency.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Sterling’s EPS grew at 55% compounded annual growth rate over the last five years, higher than its 18.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

Diving into Sterling’s quality of earnings can give us a better understanding of its performance. As we mentioned earlier, Sterling’s operating margin expanded by 10.3 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Sterling, its two-year annual EPS growth of 74.7% was higher than its five-year trend. We love it when earnings growth accelerates, especially when it accelerates off an already high base.

In Q2, Sterling reported adjusted EPS of $5.80, up from $2.51 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Sterling’s full-year EPS to grow 36.8% from $15.95 to $21.83.

Key Takeaways from Sterling’s Q2 Results

We were impressed by how significantly Sterling blew past analysts’ EBITDA expectations this quarter. We were also excited its revenue outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The market seemed to be hoping for more, and the stock traded down 3.2% to $595.10 immediately after reporting.

So should you invest in Sterling right now? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).