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Construction Partners (ROAD) Gains As Market Dips: What You Should Know

Zacks Equity Research

Construction Partners (ROAD) closed the most recent trading day at $13.75, moving +0.22% from the previous trading session. The stock outpaced the S&P 500's daily loss of 0.62%. At the same time, the Dow lost 0.25%, and the tech-heavy Nasdaq lost 0.74%.

Coming into today, shares of the road and highway construction company had lost 0.94% in the past month. In that same time, the Construction sector lost 1.38%, while the S&P 500 gained 2.8%.

Investors will be hoping for strength from ROAD as it approaches its next earnings release, which is expected to be August 8, 2019. In that report, analysts expect ROAD to post earnings of $0.30 per share. This would mark year-over-year growth of 3.45%. Meanwhile, our latest consensus estimate is calling for revenue of $230.51 million, up 18.16% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $0.83 per share and revenue of $800.61 million, which would represent changes of -3.49% and +17.72%, respectively, from the prior year.

Investors might also notice recent changes to analyst estimates for ROAD. Recent revisions tend to reflect the latest near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. ROAD is currently a Zacks Rank #2 (Buy).

Looking at its valuation, ROAD is holding a Forward P/E ratio of 16.61. This represents a premium compared to its industry's average Forward P/E of 15.99.

We can also see that ROAD currently has a PEG ratio of 1.66. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Building Products - Miscellaneous industry currently had an average PEG ratio of 1.49 as of yesterday's close.

The Building Products - Miscellaneous industry is part of the Construction sector. This industry currently has a Zacks Industry Rank of 48, which puts it in the top 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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