Will Sterling's 78% Backlog Surge Remain Sustainable Through 2026?

Sterling Infrastructure, Inc. STRL closed 2025 with a headline-grabbing 78% year-over-year surge in signed backlog to $3.01 billion, with the CEC acquisition contributing $488.9 million to backlog, reinforcing confidence in its multi-year growth trajectory. Excluding the contribution from the CEC acquisition, backlog rose an impressive 49%, signaling strong organic demand momentum.

The strength is heavily concentrated in the E-Infrastructure Solutions segment, where mission-critical projects around data centers, semiconductor fabs and large manufacturing facilities now account for 84% of the segment's backlog. Besides, the Texas market is showing strong prospects for both electrical and site development. Management highlighted that STRL is gaining traction in its efforts to cross-sell CEC’s mission-critical electrical services and the best-in-class site development services.

Combined with $300 million in unsigned awards and a future-phase pipeline exceeding $1 billion, Sterling has visibility into a work pool approaching $4.5 billion. Sustainability hinges on continued mission-critical investment cycles and successful labor scaling, especially in high-demand electrical markets. Apart from favorable market tailwinds, the company’s diversified portfolio and strategy to focus on growth in high-margin end markets are supporting the growth further. For 2026, STRL predicts revenues to be between $3.05 billion and $3.2 billion, up from $2.49 billion reported in 2025.

Sterling’s backlog growth appears structurally supported by powerful secular tailwinds in data centers and electrification. While near-term execution risks remain, current visibility suggests the 78% surge is not a one-quarter spike but a foundation for durable expansion into 2026.

Does Sterling’s Backlog Boom Past Market Rivals?

Sterling sits at the center of mission-critical electrical and E-Infrastructure projects where demand and pricing are robust. However, this distinction does not immunize it from competition from big names like Granite Construction Incorporated GVA and MasTec, Inc. MTZ.

Granite Construction is a large, diversified civil contractor focused on heavy civil infrastructure whose niche lies in long-cycle public works backed by federal, state and local funding. Although this drives a steady backlog for Granite Construction, the typically slower growth compared with mission-critical commercial projects restricts prospects. Conversely, MasTec is a leading engineering and construction provider specializing in energy, communications and utility infrastructure.

Compared with Granite Construction’s infrastructure focus and MasTec’s utility buildouts, Sterling’s backlog growth is more closely aligned with strong commercial investment cycles. While GVA and MTZ benefit from diversified public and utility spending, STRL’s niche in high-growth mission-critical projects positions it for more accelerated backlog trends.

STRL Stock’s Price Performance & Valuation Trend

Shares of this Texas-based infrastructure services provider have gained 25.9% in the past three months, outperforming the Zacks Engineering - R and D Services industry, the broader Construction sector and the S&P 500 Index.

Image Source: Zacks Investment Research

STRL stock is currently trading at a premium compared with its industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 34.48, as shown in the chart below.

Image Source: Zacks Investment Research

Earnings Estimate Revision for STRL

STRL’s earnings estimates for 2026 and 2027 have moved upward in the past seven days. The estimated figures for 2026 and 2027 imply year-over-year growth of 12.6% and 18.9%, respectively.

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Sterling currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.