VenkatP
Physician, Growth & Value Stock Investor
Sterling's CEC-heavy revenue mix appears to explain its consolidated margin decline rather than deteriorating CEC economics. Adjusted EBITDA margin was 21.6%, down about one percentage point as CEC made up more revenue, while CEC operating margin improved sequentially and year over year. Substantial organic growth and expanding work visibility made this a very strong operating report. The CEC acquisition's effect on the business remains worth watching. x.comÂ
Sterling's acquisition of CEC sets up a major re-rating from cyclical contractor to AI data center, power and mission-critical builder, a multiple expansion story. CEC added $156M of revenue in one quarter, $592M of signed backlog and $1.88B to total pipeline and backlog, plugging directly into e-infrastructure for data centers, semiconductor fabs and mission-critical power. Book-to-burn is 3.5x. x.com x.comÂ
Sterling Infrastructure's year-over-year backlog growth and CEC outlook strengthen its AI-campus case. At 18.5x forward adjusted EPS before earnings, the risk/reward looked attractive after management flagged softer Q3 awards and a possible sequential backlog decline. Results beat expectations: signed backlog reached $4.14B (+61% YoY), combined backlog $6.14B (+78%), and 2026 adjusted EPS guidance rose to $21.70-$21.96. CEC revenue could top $1B in 2026, with improving margins. x.com x.comÂ
Sterling Infrastructure's larger, more complex campus jobs should bring pricing power and repeat customers. Its operating, free-cash-flow and EBITDA margins are 18%, 14% and 21%, versus IES Holdings' 12%, 6% and 14%; Sterling also has net cash and buybacks. IES is better value, but Sterling is the preferred business for site development and inside electrical work on AI data-center and semiconductor campuses, while IES's larger residential mix dilutes its data-center margins. x.com x.comÂ
Sterling Infrastructure looks like a bubble name carried along by the AI boom, at 17x book for a concrete company after a recent skyrocket. It has had three CFOs since 2024, the first lasting under nine months, and the current CFO stayed at his prior company, Orbital Infrastructure, through its 2023 bankruptcy. It lacks institutional ownership despite going from micro cap to multibillion valuation. It may be nothing, but it is not one to back. x.comÂ
Celestica's conservative guidance and program pipeline leave room for further revenue upside. Its 2027 outlook is $40B, 90% above the $21B 2026 outlook, which has risen four times; a beat looks possible. StockedgeN cites 60-70 new programs, and only a few need to convert to matter at Celestica's scale. Complex racks force it up the value chain. At about 15x next-twelve-month earnings, the stock looks cheap, though a dip may be a better entry. Organic growth takes priority over buybacks. x.com … Show more
Celestica's strong quarter and above-estimate 2026 revenue guide make its stock deserve to be much higher. Revenue was $5.83B versus $5.46B expected, adjusted EPS $3.30 versus $2.97, and 2026 revenue guidance $21B versus $20.61B. The stock is going to $400, though it might take time. Its investment-grade customers make heavy customer concentration less concerning. x.com x.com x.com x.comÂ
Sterling Infrastructure won't work at about 3x its $1.5 billion annual order run-rate. x.comÂ
Celestica looks unusually inexpensive relative to its growth. Its enterprise value is 0.99 times next-twelve-month revenue against 58.7% revenue growth, yielding a 0.0168 growth-adjusted revenue multiple; few companies compare better. Its 14.7 times forward earnings against 69.8% earnings growth gives a 0.21 PEG, below the conventional 1.0 fair-value heuristic. x.com x.com x.comÂ
AI infrastructure names such as Vertiv, Bloom Energy and Sterling are an attractive, asymmetric short because slowing data-center builds should slow their order growth. Semis are historically overbought, a $200 billion company jumped 40% on its CEO calling it undervalued, companies may start rationalizing AI spend, Anthropic's revenue acceleration could slow, and a $1.5 trillion space IPO looms. Any waning momentum could cause severe unraveling. This is a high-conviction playbook into September. … Show more
