Granite Construction (NYSE:GVA) Releases Earnings Results, Beats Estimates By $0.54 EPS

Key Points

• Granite Construction beat quarterly estimates: The company reported $3.81 in EPS versus the $3.27 consensus, while revenue reached $1.77 billion, up 23.5% year over year and above expectations.
• Growth outlook strengthened: Record construction revenue, a $7.5 billion backlog, and improved 2026 guidance support management’s expectations for 10%–12% organic revenue growth in 2027.
• Profitability was mixed: Adjusted EBITDA rose 31% to $283 million, but materials gross margin declined 420 basis points due to higher energy costs; analysts remain divided, with the stock holding a consensus “Hold” rating and a $158.50 price target.

Granite Construction (NYSE:GVA - Get Free Report) issued its quarterly earnings data on Thursday. The construction company reported $3.81 earnings per share for the quarter, beating analysts' consensus estimates of $3.27 by $0.54, FiscalAI reports. The business had revenue of $1.77 billion for the quarter, compared to analysts' expectations of $1.70 billion. Granite Construction had a negative net margin of 3.32% and a positive return on equity of 27.83%. The company's revenue was up 23.5% on a year-over-year basis. During the same period in the previous year, the business earned $1.98 earnings per share.

Here are the key takeaways from Granite Construction's conference call:

• Record third-quarter performance: Revenue rose 23% year over year to $1.8 billion, while adjusted EBITDA increased 31% to $283 million. Construction revenue grew 27%, and construction gross margin expanded 210 basis points, supported by strong execution and disciplined project selection.
• Guidance and backlog strengthened: Granite raised the low end of its 2026 revenue outlook to $5.4 billion from $5.3 billion and expects 10%–12% organic revenue growth in 2027. Construction CAP reached a record $7.5 billion, providing significant visibility into future revenue.
• Long-term growth opportunities remain broad: Management reiterated its targets for 10%–12% organic revenue CAGR and 14%–16% adjusted EBITDA margins by 2029. Federal, rail, and mission-critical infrastructure—including data centers, space, and battery storage—are expected to complement mid-single-digit growth in core transportation markets.
• Materials margins were pressured: Materials gross margin fell 420 basis points because higher energy costs and related surcharges increased revenue but reduced incremental margins. Management said underlying unit economics remained solid and expects margins to improve as energy costs normalize, pricing, volume, vertical integration, and automation contribute.
• Cash generation supports capital allocation: Year-to-date operating cash flow reached $404 million, up from $290 million a year earlier, and the company remains on track for its 2026 cash-flow target. Granite plans to continue investing organically, pursue acquisitions, and consider share repurchases while maintaining a long-term net leverage target of approximately 2.5 times.

Granite Construction Price Performance

GVA stock traded up $9.77 on Thursday, hitting $121.44. 1,645,249 shares of the company's stock traded hands, compared to its average volume of 696,606. Granite Construction has a 1-year low of $97.26 and a 1-year high of $162.08. The stock has a market cap of $5.31 billion, a price-to-earnings ratio of 17.29 and a beta of 1.34. The stock has a fifty day moving average of $115.78 and a 200-day moving average of $126.39. The company has a current ratio of 1.01, a quick ratio of 0.94 and a debt-to-equity ratio of 1.46.

Granite Construction Announces Dividend

The firm also recently announced a quarterly dividend, which was paid on Thursday, October 15th. Investors of record on Wednesday, September 30th were issued a $0.13 dividend. This represents a $0.52 dividend on an annualized basis and a dividend yield of 0.4%. The ex-dividend date was Wednesday, September 30th. Granite Construction's payout ratio is presently -12.06%.

Insider Transactions at Granite Construction

In related news, Director Carlos M. Hernandez purchased 400 shares of the company's stock in a transaction on Thursday, August 6th. The shares were bought at an average price of $123.99 per share, with a total value of $49,596.00. Following the completion of the acquisition, the director owned 5,033 shares of the company's stock, valued at approximately $624,041.67. This represents a 8.63% increase in their ownership of the stock. The transaction was disclosed in a legal filing with the SEC, which is available through the SEC website. Company insiders own 0.88% of the company's stock.

Wall Street Analyst Weigh In

A number of analysts have commented on the stock. Oppenheimer boosted their price target on shares of Granite Construction from $170.00 to $180.00 and gave the stock an "outperform" rating in a research report on Friday, July 31st. Wall Street Zen cut shares of Granite Construction from a "buy" rating to a "hold" rating in a report on Saturday, July 18th. The Goldman Sachs Group lowered their price objective on shares of Granite Construction from $139.00 to $119.00 and set a "sell" rating on the stock in a research note on Friday, July 31st. Finally, Weiss Ratings cut Granite Construction from a "hold (c-)" rating to a "sell (d+)" rating in a report on Wednesday, September 2nd. One equities research analyst has rated the stock with a Strong Buy rating, two have assigned a Buy rating, one has given a Hold rating and two have given a Sell rating to the company. Based on data from MarketBeat, Granite Construction presently has an average rating of "Hold" and a consensus price target of $158.50.

About Granite Construction

Granite Construction Incorporated NYSE: GVA is an infrastructure construction company that provides engineering, construction and rehabilitation services for public and private-sector clients. The company's work supports transportation, water and other essential infrastructure projects across the United States.

Granite's transportation activities include the construction and maintenance of highways, roads, bridges, airports, rail systems and other transit facilities. Its water-related services include the development and improvement of water treatment and distribution systems, wastewater facilities, dams, pipelines and related infrastructure.

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