Sterling vs. AECOM: Which Infrastructure Stock Deserves Your Capital?

Sterling Infrastructure, Inc. STRL and AECOM ACM are two names shaping the future of U.S. infrastructure from different angles. Sterling is focused on execution and delivering projects across three segments, with its E-Infrastructure business leading growth through large-scale developments like data centers, manufacturing plants and distribution facilities. AECOM, in contrast, has built its reputation as a global leader in planning, designing and program management, guiding governments and corporations through some of the most complex transportation, environmental, water and energy projects worldwide.

Both companies are aligned with key industry trends driving demand. The surge in data center construction, large-scale transportation upgrades and the ongoing energy transition are creating opportunities across the infrastructure value chain. Sterling brings strength in physical construction and end-to-end delivery, while AECOM leverages its scale and technical expertise to shape projects long before they break ground. With infrastructure spending accelerating, investors have two different approaches to consider in the sector.

The Federal Reserve’s recent decision to lower its key lending rate by 25 basis points, setting the target 4-4.25%, adds a layer to the investment backdrop. Cheaper financing costs may spur both public and private infrastructure investments, reinforcing the already favorable demand environment for companies like Sterling and AECOM.

Let's dive deep and closely compare the fundamentals of the two stocks to determine which one is a better investment now.

The Case for STRL

This Texas-based infrastructure services provider is building momentum by concentrating on high-value markets, such as data centers, e-commerce distribution and manufacturing facilities. This focus enabled the company to deliver solid growth in the second quarter of 2025, with revenues increasing 21% year over year, supported by a 29% jump in E-Infrastructure Solutions and a 24% increase in Transportation Solutions. Adjusted earnings per share climbed 41% to $2.69, while gross margins expanded by 400 basis points to 23.3%. The company continues to prioritize mission-critical projects that can deliver stronger profitability and long-term visibility.

The E-Infrastructure segment continued to set the pace, driven by surging demand for data centers and a rebound in large distribution projects. Recent wins highlight Sterling’s role as a trusted partner in these high-growth areas, and the company’s pipeline suggests that demand will remain strong over the coming years. Transportation Solutions also contributed, with healthy activity in core markets like the Rocky Mountain and Arizona regions.

However, the sequential backlog declined due to seasonal timing and strong revenue burn. In addition, Building Solutions faced headwinds, as segment revenue fell 1% year over year and adjusted operating income dropped 28% in the second quarter of 2025. Weaker housing affordability and softer residential demand weighed on results.

Despite these challenges, Sterling’s growth outlook remains well supported by a robust project pipeline. The company ended the second quarter with $2 billion in total backlog, up 24% from the prior year. Within this, E-Infrastructure backlog grew 44% to $1.2 billion, reflecting sustained demand for data centers and large-scale distribution projects.

On top of that, Sterling held about $750 million in future-phase opportunities tied to current projects, which brings combined visibility in E-Infrastructure close to $2 billion. This expanded pipeline provides multi-year clarity and underpinned the company’s decision to raise its 2025 guidance, signaling confidence in revenue growth and margin improvement.

The Case for ACM

AECOM is benefiting from steady demand across its global end-markets, supported by strong client relationships and government-backed infrastructure initiatives. In the first nine months of fiscal 2025, net service revenues (NSR) grew 6% year over year on an adjusted basis to $1.94 billion, with growth coming from the Americas and international markets. Exposure to long-term government programs in the U.K. and Canada, along with expanding opportunities in the Middle East, has reinforced revenue visibility in the year.

The company’s Americas segment remained the primary growth driver, with NSR increasing 8% year over year, reflecting robust activity in transportation and environmental projects. International markets also contributed, growing 3% despite varying regional dynamics. Together, these results highlight AECOM’s ability to capture opportunities across diverse geographies while maintaining consistent growth momentum.

However, AECOM continues to face challenges that reflect the complexity of its global footprint. Certain international markets remain vulnerable to political changes, funding delays and currency fluctuations, which can weigh on near-term results. Additionally, the company’s reliance on large government programs means that shifts in policy or budget cycles may affect project timing and execution.

The company’s strong backlog provides long-term growth prospects. As of the third quarter of fiscal 2025, total backlog stood at $24.6 billion, up 5% from the prior year. This record pipeline, supported by demand for water, transportation and environmental projects, gives the company multi-year visibility and underscores its competitive positioning in large-scale infrastructure. With its scale and expertise, AECOM is well-placed to capture the benefits of rising global investment in critical infrastructure.

Stock Performance & Valuation: STRL vs. ACM

As witnessed from the chart below, in the past three months, Sterling’s share price performance stands significantly above those of AECOM and the Zacks Engineering - R and D Services industry.

Considering valuation, over the past five years, Sterling has traded above AECOM on a forward 12-month price-to-earnings (P/E) ratio basis.

Comparing EPS Estimate Trends: STRL vs. ACM

The Zacks Consensus Estimate for STRL’s 2025 EPS indicates 56.9% year-over-year growth, with the 2026 estimate implying an increase of 14.7%. Its 2025 and 2026 EPS estimates have trended upward over the past 30 days.

STRL's EPS Estimate Revision

The Zacks Consensus Estimate for ACM’s fiscal 2025 EPS suggests 15.9% year-over-year growth, with the fiscal 2026 estimate indicating an increase of 9.8%. Its fiscal 2025 and 2026 EPS estimates have both been unchanged over the past 30 days.

ACM's EPS Estimate Revision

The Verdict

Sterling is emerging as a growth leader in the infrastructure space, supported by its focus on high-value markets like data centers, e-commerce distribution and manufacturing facilities. Its solid backlog and raised 2025 guidance point to strong visibility, while favorable earnings estimate revisions reinforce confidence in its ability to sustain momentum. With its shares outperforming AECOM and the broader industry in recent months, investors are rewarding Sterling’s execution and exposure to fast-growing end-markets.

AECOM continues to benefit from demand across transportation, water and environmental projects, with a strong backlog that provides multi-year visibility. However, the company faces greater exposure to international risks and has seen limited movement in its earnings estimates. While AECOM’s scale and expertise position it well in the long run, its stock performance has trailed Sterling’s more growth-oriented profile.

Considering stronger share price performance, upward estimate revisions and stronger earnings growth, Sterling, which flaunts a Zacks Rank #1 (Strong Buy), presents a better investment opportunity than AECOM, which has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks Rank #1 stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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