Investment Research report

Construction Partners, Inc.

Previous Item
All Reports
Construction Partners, Inc.
An As-Faulty Investment
Download Report
Construction Partners, Inc.
Download Report 2
Construction Partners, Inc.
Download Report 3
Construction Partners, Inc.
Download Report 4
Construction Partners, Inc.
Download Report 5
Construction Partners, Inc.
Download Report 6
Construction Partners, Inc.
Download Report 7

Research Overview

INDEX:
S&P 500
Sector:
Industrials
Position:
Short
Date:
Jan 23, 2025

After conducting a forensic financial review of Construction Partners, Inc. (Nasdaq: ROAD) (“ROAD” or the “Company”), a vertically integrated producer of asphalt and provider of road paving services to state departments of transportation and commercial clients, Spruce Point raises concerns about the long-term sustainability of the Company’s business, as there have been increased pressures resulting in organic revenue growth failure. Notably, further investigation revealed evidence that contracts awarded by the Company’s biggest customer have materially declined. Based on our investigation, we estimate a 35% - 50% potential long-term downside and market underperformance risk.

The report highlights several key concerns with the Company, including:

  • We believe that ROAD’s business is under greater pressure than is widely understood, which is masked by poor transparency and aggressive financial presentation methods.  
  • ROAD’s biggest customer is the Florida Department of Transportation, but evidence obtained through Freedom of Information Act requests suggests that contract awards are poised to materially decline.
  • We believe ROAD’s levered acquisition expansion to Texas and Oklahoma is problematic and deflects attention away from Florida.
  • We believe the market miscalculates ROAD’s enterprise value and its valuation reflects a misunderstanding of its business and financial prospects.
Downloads & More

Research Assets & Releases

Join The Mailing List

Spruce Point Alerts & Updates

See the other side of the Wall Street hype machine.