America’s Most Boring Growth Stock Is Down 44%. Opportunity or Warning?
Revenue is growing 29% a year, guidance has been raised three times, and the backlog is at a record high. Yet the stock keeps setting new yearly lows. The market has noticed something you won’t find in press releases: the price the company is paying for its growth.
Key points
Revenue is growing 29% a year and guidance has been raised three times, yet the stock hit a new yearly low of 79.33 dollars
Of the latest 28.2% increase in revenue, only 8.9 percentage points came organically; the rest was bought
Debt of 1.79 billion dollars and annual interest costs of more than 112 million change the math that press releases don’t show
Analysts maintain a target price of 132.67 dollars, about 60% above where the stock trades today
The company operates in eight states that account for 70 to 75% of new data center construction in the U.S.
Asphalt that grows like software
Construction Partners $ROAD is a company most investors would skip at first glance. It’s based in Dothan, Alabama, laying asphalt on county roads, repairing highways, airport runways, and supermarket parking lots. No product to show off at a conference, no brand customers would recognize. Just hot asphalt, gravel, and thousands of miles of roads in the states Americans are moving to: Florida, Texas, Georgia, North and South Carolina, Tennessee, Alabama, and Oklahoma.
And yet its revenue is growing at a pace more typical of a software company. More than 29% a year over the long term, and a remarkable 54% in fiscal 2025, to 2.81 billion dollars. For fiscal 2026, which ended on September 30, guidance calls for 3.64 to 3.68 billion dollars. The backlog reached a record 3.36 billion dollars, and management raised its full-year guidance three times in a single year.
Here’s the paradox. The stock has fallen from its May high of 151 dollars to around 83 to 85 dollars, a drop of 44%, and hit a new yearly low of 79.33 dollars on October 14. A company reporting records every quarter is 30% cheaper on the stock market than it was a year ago. The explanation isn’t what the company does, but how it pays for its growth.