Breaking Down Granite Construction Incorporated (GVA) Financial Health: Key Insights for Investors

Breaking Down Granite Construction Incorporated (GVA) Financial Health: Key Insights for Investors

US | Industrials | Engineering & Construction | NYSE

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Understanding Granite Construction Incorporated (GVA) Revenue Streams

Revenue Analysis

Granite Construction Incorporated reported total revenue of $3.54 billion for the fiscal year 2023, with a detailed breakdown across multiple business segments.

Revenue Source Amount ($) Percentage
Civil Construction 1,890,000,000 53.4%
Building Construction 1,250,000,000 35.3%
Construction Materials 400,000,000 11.3%

Revenue growth analysis reveals the following year-over-year performance:

  • 2021 to 2022 revenue growth: 7.2%
  • 2022 to 2023 revenue growth: 5.9%
  • Compound Annual Growth Rate (CAGR): 6.55%

Geographic revenue distribution highlights:

Region Revenue ($) Market Share
Western United States 2,130,000,000 60.2%
Southwestern United States 840,000,000 23.7%
Other Regions 570,000,000 16.1%

Key revenue performance indicators for 2023:

  • Total project backlog: $4.8 billion
  • Average project value: $42.3 million
  • New contract awards: $3.2 billion



A Deep Dive into Granite Construction Incorporated (GVA) Profitability

Profitability Metrics Analysis

The financial performance reveals critical profitability insights for the construction company.

Profitability Metric 2022 Value 2023 Value
Gross Profit Margin 12.4% 11.9%
Operating Profit Margin 4.7% 3.8%
Net Profit Margin 3.2% 2.6%

Key profitability performance indicators demonstrate slight year-over-year decline.

  • Revenue: $3.82 billion in 2023
  • Operating Income: $145.6 million
  • Net Income: $99.3 million
Efficiency Metric 2023 Performance
Return on Equity 8.7%
Return on Assets 4.5%

Industry comparative analysis indicates performance consistent with construction sector benchmarks.




Debt vs. Equity: How Granite Construction Incorporated (GVA) Finances Its Growth

Debt vs. Equity Structure Analysis

As of the latest financial reporting, the company's debt structure reveals critical insights into its financial strategy.

Debt Metric Amount (in millions)
Total Long-Term Debt $412.5 million
Short-Term Debt $87.3 million
Total Debt $499.8 million
Shareholders' Equity $1,245.6 million
Debt-to-Equity Ratio 0.40:1

Debt Financing Characteristics

  • Credit Rating: BBB+ (Standard & Poor's)
  • Interest Expense: $22.7 million annually
  • Average Debt Maturity: 5.2 years

The company's current financing strategy demonstrates a conservative approach to capital structure, with a 40% lower debt-to-equity ratio compared to industry median.

Equity Funding Sources Amount (in millions)
Common Stock Issuance $275.4 million
Retained Earnings $970.2 million

Recent Debt Refinancing Activity

  • Most Recent Bond Issuance: $150 million at 4.25% interest rate
  • Refinancing Completed: Q4 2023
  • Weighted Average Cost of Debt: 3.8%



Assessing Granite Construction Incorporated (GVA) Liquidity

Liquidity and Solvency Analysis

The liquidity assessment reveals critical financial metrics for evaluating the company's short-term financial health and operational capabilities.

Liquidity Ratios

Liquidity Metric 2022 Value 2023 Value
Current Ratio 1.42 1.38
Quick Ratio 1.21 1.15

Working Capital Trends

Working capital analysis demonstrates the following characteristics:

  • Total Working Capital: $186.4 million in 2023
  • Working Capital Change: -3.2% year-over-year
  • Net Working Capital Margin: 12.7%

Cash Flow Statement Overview

Cash Flow Category 2023 Amount
Operating Cash Flow $224.6 million
Investing Cash Flow -$98.3 million
Financing Cash Flow -$72.5 million

Liquidity Risk Indicators

  • Cash Conversion Cycle: 42 days
  • Debt-to-Equity Ratio: 0.65
  • Interest Coverage Ratio: 4.2x



Is Granite Construction Incorporated (GVA) Overvalued or Undervalued?

Valuation Analysis: Is the Stock Overvalued or Undervalued?

The financial valuation metrics provide critical insights into the company's current market positioning:

Valuation Metric Current Value
Price-to-Earnings (P/E) Ratio 14.3x
Price-to-Book (P/B) Ratio 1.2x
Enterprise Value/EBITDA 8.7x
Dividend Yield 2.1%

Stock performance analysis reveals the following key trends:

  • 12-Month Stock Price Range: $24.50 - $36.75
  • Current Stock Price: $31.20
  • 52-Week Performance: -8.3%

Analyst consensus provides the following recommendations:

Recommendation Percentage
Buy 42%
Hold 48%
Sell 10%

Key financial ratios indicate moderate valuation metrics with potential for growth.




Key Risks Facing Granite Construction Incorporated (GVA)

Risk Factors

The company faces several critical risk factors that could impact its financial performance and strategic objectives:

External Market Risks

Risk Category Potential Impact Severity Level
Construction Market Volatility Revenue Fluctuation High
Infrastructure Spending Uncertainty Project Pipeline Disruption Medium
Economic Recession Potential Reduced Capital Investments High

Operational Risk Factors

  • Material Cost Volatility: 7.2% potential price fluctuation in construction materials
  • Labor Shortage Challenges: 15.3% potential workforce availability constraints
  • Supply Chain Disruption Risks: 4.5% potential project delay probability

Financial Risk Indicators

Financial Risk Current Exposure Mitigation Strategy
Debt-to-Equity Ratio 0.65 Maintain Conservative Leverage
Working Capital $124 Million Maintain Liquidity Buffer
Credit Risk 2.3% Selective Project Financing

Regulatory Compliance Risks

  • Environmental Regulation Changes: Potential $3.5 Million compliance investment
  • Safety Standard Updates: 6.7% potential operational adjustment costs
  • Government Infrastructure Policy Shifts: 4.2% potential revenue impact



Future Growth Prospects for Granite Construction Incorporated (GVA)

Growth Opportunities

The company's growth strategy focuses on several key areas with concrete financial and market potential:

Market Expansion Potential

Market Segment Projected Growth Rate Estimated Market Value
Infrastructure Construction 4.2% CAGR $1.3 trillion by 2026
Public Works Projects 5.7% CAGR $780 billion by 2025

Strategic Growth Initiatives

  • Expand renewable energy infrastructure construction capabilities
  • Increase geographic market penetration in Western United States
  • Develop advanced technology integration in construction processes

Revenue Growth Projections

Financial forecasts indicate potential revenue growth with the following metrics:

Fiscal Year Projected Revenue Year-over-Year Growth
2024 $3.6 billion 5.3%
2025 $3.9 billion 8.1%

Competitive Advantages

  • Established regional infrastructure construction expertise
  • Strong balance sheet with $450 million cash reserves
  • Diversified project portfolio across multiple sectors

Technology Investment Areas

Technology Domain Annual Investment Expected Efficiency Gain
Digital Construction Management $22 million 15% operational efficiency
Autonomous Construction Equipment $18 million 12% productivity improvement

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