Filing Flows › Companies › Sterling Infrastructure › Analysis traps
Sterling Infrastructure (STRL): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Oct 29, 2026; rules v1.1
Sterling Infrastructure (STRL): 0 rules of 10 triggered on the filings to Sep 30, 2026. 1 to review; 3 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
A precise DCF value = the true value To review · confidence high
The DCF's point value is 427.98 a share (price 252.82); 71% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 353.14 to 502.82; across every method the research ran the range is 22 to 1,942. The value is a range; the decimals are not information.
Innocent reading: A stable, mature business with a narrow range of outcomes, where the point value is a fair summary.
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow did not rise ($416M → $363M): the trap does not arise.
The figures and how they are read
| Fiscal year before | FY2024 |
| Fiscal year | FY2025 |
| Operating cash flow, year before | $497M |
| Operating cash flow | $440M |
| Capex, year before | $81M |
| Capex | $77M |
| Free cash flow, year before | $416M |
| Free cash flow | $363M |
| Change in FCF | −$53M |
| Change in capex | −$4M |
| Working capital: change in its cash contribution | −$215M |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY2025 (cash flow statement, fiscal year) · FY2024 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Not triggered confidence high
Stock compensation is 1.0% of revenue: small enough that adding it back changes little.
The figures and how they are read
| Fiscal year | FY2025 |
| Stock compensation | $24M |
| Revenue | $2.5B |
| SBC / revenue | +1.0% |
| Buybacks | $74M |
| Buybacks / SBC | 3.1 |
| Diluted shares, year before | 31.1M shares |
| Diluted shares | 30.9M shares |
| Diluted shares: change | -0.6% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY2025 (stock compensation, buybacks and the diluted share count, fiscal year)
B02 Receivables growing = future cash is certain Insufficient data
fewer than five quarters with receivables and revenue on file (a year-over-year comparison needs five)
B08 Adjusted profit = economic profit Insufficient data
no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS
C02 Low net debt = no refinancing risk Not triggered confidence medium
$143K comes due within a year, 4812.8× covered by cash and investments of $217M plus $471M of free cash flow.
The figures and how they are read
| Cash and investments | $217M |
| Debt | $95M |
| Net debt | −$122M |
| Due within a year | $143K |
| Read from | the current portion of debt on the balance sheet |
| Free cash flow, twelve months | $471M |
| Cash plus free cash flow | $688M |
| Coverage of what is due | 4812.8 |
| Due in the second year | — |
| Balance sheet date | 2026-09-30 |
due within a year from the maturity table (else the current portion of debt), against cash and investments plus free cash flow over the last twelve months (zero if negative); no credit lines assumed
Source: 2026-09-30 (debt maturities, cash and investments)
D03 EPS growth = profit growth Insufficient data
no quarter with EPS, net income and diluted shares for both this year and last
E02 Low P/E at a cyclical peak = undervalued Not triggered confidence medium
Net income of $554M is a high, but the last eight years rose almost every year (median $106M): a steady climb, not a cycle's top, so the P/E of 14.2× is not on peak profit in that sense.
The figures and how they are read
| market value | $7.9B |
| net income ttm | $554M |
| pe ttm | 14.20 |
| net income median fy | $106M |
| pe mid cycle | 73.80 |
| net income peak fy | $290M |
| years | FY2018 / 25.0; FY2019 / 40.0; FY2020 / 42.0; FY2021 / 63.0; FY2022 / 106.0; FY2023 / 139.0; FY2024 / 257.0; FY2025 / 290.0 |
| down years in window | 0 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q3 2026 (net income, trailing twelve months)
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 427.98 a share (price 252.82); 71% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 353.14 to 502.82; across every method the research ran the range is 22 to 1,942. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 427.98 |
| price | 252.82 |
| terminal value share | +70.7% |
| swing by input | Operating margin / ±3 pts / 353.14 / 502.82; Revenue growth (each year) / ±5 pts / 360.46 / 506.39; WACC / ±1 pt / 385.87 / 479.38; Tax rate / ±5 pts / 399.29 / 456.67 |
| range all methods | 21.59; 1941.64 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Sterling Infrastructure: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.