ACA - Arcosa: A Good Business But Already Priced In

2024-02-09 08:44:16 ET

Summary

• The company experienced volume growth and price increases across most of its businesses during the last quarter.
• Long-term outlook is good followed by government investment on the wind power side and the potential need for deliveries of new barge to keep fleet age constant.
• The ACA stock is not a good buy at current levels due to its premium valuation.

Thesis

Arcosa ( ACA ) has experienced decent volume growth during the last quarter, which should continue further as the economy recovers. The strong backlog levels and increased prices should also act as key drivers for topline growth in the quarters ahead. The long term looks promising as well due to tailwinds primarily in the Barge business and wind tower business, which should drive growth in the coming years. Margin also improved Year on year, and should continue to improve with operational efficiencies across the business and volume leverage in the long term....

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