Arcosa (ACA): Evaluating Valuation Following Strong Q3 Earnings Growth and Raised 2025 Guidance

Arcosa (ACA) just announced its third quarter results, showing strong growth in both sales and net income compared to last year. The company also updated its full-year 2025 revenue and profit outlook, which signals ongoing confidence.

See our latest analysis for Arcosa.

Arcosa’s upbeat third quarter results and revised outlook have added fuel to a strong run in its shares, with a one-day share price return of 10.6% and 21.8% gains over the past three months. Over the longer term, investors have enjoyed a total shareholder return of 9.1% in the past year and an impressive 69% over three years. This indicates that momentum is still building for the stock following this earnings boost.

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But with the stock trading near all-time highs after these strong results, is Arcosa still undervalued, or have investors already priced in all of this future growth, leaving little room for further upside?

Most Popular Narrative: 12.1% Undervalued

With Arcosa’s fair value pegged at $116 by the most-followed analyst narrative, and shares recently closing at $102, expectations are running high for more upside. The stage is set for a bold vision of how infrastructure and renewable energy trends could propel future growth.

Accelerating investment in grid modernization, data center development, and renewable energy integration is boosting demand for utility and transmission structures. This has led to a record backlog and has prompted capacity expansions expected to support higher earnings growth and margin accretion.

Read the complete narrative.

Curious which catalysts fuel this bullish outlook? Hidden beneath the surface are ambitious targets for top-line growth, margin expansion, and a future profit multiple that rivals market leaders. See how these projections reshape Arcosa’s fair value.

Result: Fair Value of $116 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, if government infrastructure spending slows or acquisitions disrupt operations, these factors could quickly challenge Arcosa’s optimistic outlook and valuation case.

Find out about the key risks to this Arcosa narrative.

Another View: Market Ratios Add Caution

Looking at Arcosa's valuation from a price-to-earnings angle, the market paints a more conservative picture. The current P/E stands at 33.7x, which is just under the industry average of 34.5x, but notably above the fair ratio of 29.6x that the market could gravitate toward. This suggests limited cushion if sentiment turns. Is Arcosa priced for perfection, or could market realities temper further gains?

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Arcosa Narrative

If you think there’s more to the story or want a hands-on look at the numbers yourself, it’s easy to shape your own view in just a few minutes with Do it your way.

A great starting point for your Arcosa research is our analysis highlighting 3 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.