Construction Partners heads into its fiscal fourth-quarter report with a striking disconnect. Management has raised its full-year outlook four quarters running, backlog has grown for 20 straight quarters to a record $3.36 billion, and the company keeps adding acquisitions. Yet the stock has fallen almost 26% since the last report, trailing the S&P 500 by more than 23 percentage points. Investors are clearly not questioning what the company has said. They are questioning whether the story can hold up from here.
The Street expects earnings of $1.36 per share on revenue of about $1.08 billion, up roughly 20% from $899.8 million a year ago. That is strong growth for a road builder, though much of it comes from acquisitions. Last quarter's 28% revenue gain split into about 9% organic and 19% acquired. The whisper number of $1.45 sits meaningfully above consensus, so the informal bar is higher than the published one. A result that only matches the official estimate could be read as a soft quarter. Management's fiscal 2026 revenue range of $3.64 billion to $3.68 billion is well above the $3.56 billion full-year consensus, which suggests some estimates have not kept up with the raises. Delivering the high end of guidance would be a quiet but real upside signal.
Because this quarter closes the fiscal year, it is the direct test of the most recent raise. Adjusted EBITDA guidance moved up to $559 million to $569 million, and net income guidance rose to $165 million to $168 million. Hitting those figures would show that the margin story is intact. Adjusted EBITDA margin last quarter was 16.3%, and the full-year midpoint implies about 15.4%. The weak spot was gross margin, which slipped to 16.8% from 16.9%. That came as higher energy and liquid asphalt costs hit the business and an unusually wet May disrupted work in many markets. Management said its pass-through pricing model largely absorbed both. A stable or improving gross margin would support that claim. Another small decline would raise the question of whether input costs are moving faster than contract indexes can adjust.
The forward signals may matter even more than the quarter itself. Last call, management talked up data centers far more than before. It cited a Central Texas pipeline of more than $100 million and roughly $100 million of active work in Oklahoma, with more than $130 million in the pipeline behind it. It also said 70% to 75% of new data-center construction is in its states. The Ellsworth acquisition expands the Tulsa and Oklahoma City presence tied to that theme and brings about $140 million of acquired revenue into fiscal 2027. Investors should look for these pipelines turning into booked backlog, another record backlog figure, and progress on the greenfield plants slated to open later this year. If management outlines fiscal 2027, a view combining Ellsworth's contribution with solid organic growth would directly answer the bears.
The mood has soured, even if only modestly. Sentiment has slipped further into bearish territory, moving from 4.2% bearish to 9.0% bearish. The stock trades near $81.64, far below its 200-day moving average of $110.28. It sits near the bottom of a post-earnings range of $74.51 to $123.46, well below the prior quarter's $93 to $151 band. That leaves room for relief if results are clean, but the chart offers no support for the bullish case on its own. Uncertainty over federal highway reauthorization, including a possible stopgap extension, is another overhang that management has called immaterial.
The key question is whether Construction Partners can show that its growth is more than acquisitions layered on a cyclical paving business. The company needs to finish the year at or above the raised guidance, hold margins despite energy costs, and show data-center prospects becoming real backlog. Do that, and the recent selloff looks like a gap between price and fundamentals. Fall short, and the market's skepticism will look justified.