Valuation method | Value, $ | Upside, % |
---|---|---|
Artificial intelligence (AI) | 24.10 | -73 |
Intrinsic value (DCF) | 0.00 | -100 |
Graham-Dodd Method | 28.60 | -68 |
Graham Formula | 36.70 | -59 |
Arcosa, Inc. (NYSE: ACA) is a leading provider of infrastructure-related products and solutions serving the construction, energy, and transportation markets in North America. Headquartered in Dallas, Texas, Arcosa operates through three key segments: Construction Products, Engineered Structures, and Transportation Products. The company delivers essential materials such as aggregates, utility structures, wind towers, and transportation components, supporting critical infrastructure projects across residential, commercial, and industrial sectors. With a diversified portfolio and a strong presence in cyclical industries, Arcosa benefits from long-term demand drivers like renewable energy expansion, infrastructure modernization, and transportation efficiency. The company’s vertically integrated operations and focus on sustainability—including recycled materials and wind energy infrastructure—position it as a key player in the Industrials sector. Arcosa’s strategic acquisitions and organic growth initiatives further enhance its market leadership in infrastructure solutions.
Arcosa presents a compelling investment case due to its diversified exposure to high-growth infrastructure markets, including renewable energy and transportation. The company’s revenue stability across multiple segments mitigates cyclical risks, while its strong operating cash flow ($502M in the latest period) supports further growth and shareholder returns. However, investors should note its moderate leverage (total debt of $1.69B) and exposure to commodity price fluctuations in construction materials. With a market cap of ~$4.1B and a beta near 1.0, Arcosa offers balanced risk-reward potential for investors seeking infrastructure-driven industrials. The modest dividend (yield ~0.5%) and recent earnings growth (EPS of $1.91) suggest room for capital appreciation, particularly if infrastructure spending accelerates in North America.
Arcosa’s competitive advantage lies in its diversified product portfolio and vertical integration across infrastructure markets. Unlike pure-play competitors, Arcosa serves multiple end markets (construction, energy, transportation), reducing reliance on any single sector. Its Engineered Structures segment, particularly wind towers, benefits from the secular growth in renewable energy, while its Transportation Products segment holds a niche in barge and rail components. The company’s scale in aggregates and recycled materials (Construction Products) provides cost advantages in regional markets. However, Arcosa faces stiff competition from larger conglomerates like Martin Marietta (MLM) in construction materials and Trinity Industries (TRN) in transportation equipment. Its mid-market position means it must compete on specialization and customer service rather than pure pricing power. Strategic acquisitions, such as its expansion into utility structures, have bolstered its market share, but integration risks remain. Arcosa’s ability to cross-sell products across segments (e.g., supplying aggregates for wind farm construction) differentiates it from single-line competitors.