Why this new Caltrans contract matters for Granite Construction stock
Granite Construction (GVA) has attracted attention after winning a roughly $66 million California Department of Transportation contract to widen State Route 49 in Nevada County, with the work slated for its 2025 fourth quarter CAP.
The project includes adding travel lanes, safety oriented design features, and supplying 75,000 tons of asphalt from Granite’s Bradshaw Hot Plant. This gives investors a concrete example of how the company can combine its construction and materials businesses on a single contract.
See our latest analysis for Granite Construction.
Granite’s latest Caltrans win lands at a time when the stock has a 30 day share price return of 5.05% and a 1 year total shareholder return of 33.41%. Multi year total shareholder returns are in the very large range, with price momentum building in recent months from a 90 day share price return of 15.13%.
If this kind of contract win has your attention, it could be a good moment to cast the net wider and check out aerospace and defense stocks as another source of infrastructure linked ideas.
With Granite trading at $121.55, sitting at a 26% modelled intrinsic discount and about 9% below the average analyst price target, you have to ask: is there still value here, or is the market already baking in future growth?
Most Popular Narrative: 10.3% Undervalued
Compared with the last close at $121.55, the most followed narrative points to a fair value of $135.50, framing Granite as modestly undervalued on that view.
Record capital acquisition program (CAP) levels and robust booking momentum provide high confidence in long-term growth and visibility through 2026. Recent performance demonstrates that management's strategic initiatives continue to drive substantially better results across key financial metrics.
Curious how a richer contract pipeline, wider margins, and a higher future earnings multiple all line up to justify that higher value? The tension between slightly softer revenue assumptions and a higher projected profit run rate sits at the core of this narrative. If you want to see how those moving parts come together in the model, the full story is worth a closer read.
Result: Fair Value of $135.50 (UNDERVALUED)
Have a read of the narrative in full and understand what's behind the forecasts.
However, you also need to weigh up the reliance on acquisitions and higher debt, as well as the risk that changes in public infrastructure funding or project timing could undercut those assumptions.
Find out about the key risks to this Granite Construction narrative.
Build Your Own Granite Construction Narrative
If you see the numbers differently or prefer to test the assumptions yourself, you can build a custom view in minutes with Do it your way.
A great starting point for your Granite Construction research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.
Looking for more investment ideas?
If Granite has you thinking more broadly about your portfolio, this is the moment to widen the lens and look for other opportunities before the crowd catches on.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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