Blowing away their Q2 expectations last week, Willdan Group WLDN and Sterling Infrastructure STRL both reported record revenue and net income for the quarter, driven by their exceptional execution in high-growth infrastructure sectors.
Willdan is capitalizing on strong demand for energy infrastructure, with Sterling seeing increased demand for its digital infrastructure and transportation solutions.
With both companies riding on powerful secular trends, investors may be wondering which of these engineering stocks is the better investment.
Notably, steady revenue from states and municipal contracts led to Willdan and Sterling raising their full-year guidance following their strong Q2 reports.
Willdan increased its full-year targets for net revenue ($340-$350 million), Adjusted EPS ($3.50-$3.65), and Adjusted EBITDA ($70-$73 million). This comes as Willdan has secured a $30 million contract with the City of Fairfield (California), a $20 million deal with National Grid NGG, and a multi-year contract with the Los Angeles Department of Water and Power.
Pivoting to Sterling, the company raised its full-year revenue guidance ($2.10-$2.15 billion), net income ($243-252 million), and adjusted EPS ($9.21-$9.47) forecasts. It’s noteworthy that Sterling’s backlog sits at over $2 billion, having a focus on high-margin projects, including roadway projects in Utah, Colorado, and Texas.
Outside of showing the ability to consistently beat earnings expectations and raise their forecasts, Willdan and Sterling have lifted investor sentiment through strategic acquisitions. Specifically, they have fueled their expansion into data center infrastructure, capitalizing on the advancement of artificial intelligence.
In this regard, Willdan acquired Alternative Power Generation (APG) in March, which will enhance its ability to serve commercial electric loads and complex grid interconnection needs for AI data centers and EV charging stations as well.
Similarly, Sterling Infrastructure has planned to acquire CEC Facilities Group later in the year, a provider of electrical and mechanical services that will expand its reach into mission-critical electrical contracting for semiconductors and data centers. Furthermore, Sterling has already proven its ability to build out EV infrastructure, working on EV manufacturing facilities in Georgia for Hyundai HYMLF and Rivian RIVN.
As two of the market’s top performers, Willdan’s stock has skyrocketed nearly +200% year to date to around $112 a share, with Sterling shares up over +70% to just under $300. More impressive, over the last three years, WLDN and STRL are up over +380% and +260%, respectively.
