Dycom Stock Trades Below 200 & 50-Day Moving Averages: Buy or Fold?

Dycom Industries, Inc.’s DY stock has been trading below its 200-day and 50-day moving averages since the middle of February 2025. On Tuesday, the stock’s closing price of $140.69 was below its 50-day moving average of $165.41 and the 200-day moving average of 178.08.

The DY stock has dropped 17.9% so far this year, reflecting pressure from broader market concerns and policy-related uncertainty. This includes potential policy changes under the Trump administration, such as the pause on infrastructure funds and uncertainty surrounding the $42.5-billion Broadband Equity, Access and Deployment (BEAD) program, which aims to expand broadband access in underserved areas.

DY Trades Below 200 & 50-Day Moving Averages

The stock’s performance compares with the Zacks Building Products – Heavy Construction industry’s 22.9% decline. When it comes to the broader Construction sector and the S&P 500 Composite, the drops were 18.9% and 15.6%, respectively, during the same period.

Dycom Stock Outperforms Industry YTD

Could the recent decline present a compelling entry point for DY stock? Let us take a closer look at the company’s prospects to understand the potential ahead.

Nonetheless, the DY stock has performed better than its competitors like EMCOR Group, Inc. EME, Fluor Corporation FLR and MasTec, Inc. MTZ, which has declined 21.8%, 37.3% and 21.5%, respectively, year to date.

Analysts Show Confidence in DY’s Long-Term Growth

Analysts remain optimistic about Dycom’s earnings despite a downward revision in near-term estimates. Over the past 30 days, the Zacks Consensus Estimate for fiscal 2026 has declined from $9.33 to $9.25. However, the estimate for fiscal 2027 has increased from $10.36 to $10.39, implying 12.4% year-over-year growth and signaling continued confidence in the company’s performance.

Dycom Shares Trade at a Discount

DY is currently trading at a discount compared with the industry, with a forward 12-month price-to-earnings (P/E) ratio of 14.78X. This is slightly lower than the industry average of 14.84X, indicating that the stock may be undervalued. The lower valuation suggests an upside, making it an appealing opportunity for investors looking for value in the telecommunications and utility infrastructure space.
 

The stock also has a Value Score of A, supported by a Growth Score of A, indicating strong fundamentals at current levels.

Let us explore the key factors that could support the DY stock and drive a rebound in the near term.

Project Wins Support Dycom’s Growth Amid BEAD Uncertainty

Despite ongoing uncertainty around the BEAD program, efforts to improve broadband access continue to move forward. Dycom remains well-positioned to benefit from fiber deployment projects and recent contract wins, supporting growth in the near term. Fiber-to-the-home projects are expected to remain a key driver for the company in fiscal 2026.

In the fourth quarter, more than $1 billion in broadband infrastructure funding was awarded across nine states. Several states are actively allocating grants for rural fiber-to-the-home and middle-mile projects, creating growth opportunities for Dycom. The company also secured market awards from Verizon and extended multiple agreements covering both maintenance and fiber-to-the-home work. These wins support the company’s role in Verizon’s network expansion planned for calendar year 2025.

Owing to strong demand from ongoing fiber-to-the-home programs, long-haul network projects by hyperscalers and rising wireless equipment upgrades, Dycom expects total revenues to grow 10-13% year over year in fiscal 2026.

Acquisitions Strengthen Market Position of Dycom

DY has expanded its presence through key acquisitions, enhancing capabilities in the wireless construction space. These moves have widened the company’s geographic reach and positioned it to better serve the growing demand for wireless network modernization and deployment services.

In fiscal 2025, Dycom acquired three telecommunications construction contractors, including Black & Veatch’s public carrier wireless business. This was Dycom’s largest deal in the wireless segment and it strengthened DY’s capabilities in wireless construction services. The acquisition is expected to support top-line growth and improve the company’s position in the competitive telecommunications infrastructure market.

DY’s Growing Backlog Reflects Steady Demand & Visibility

Dycom continues to expand its backlog through a mix of service, maintenance and select higher-risk contracts. This approach supports long-term visibility and highlights the company’s focus on core offerings, even amid ongoing market uncertainties. At the end of the fiscal fourth quarter, the backlog stood at $7.76 billion, up from $6.92 billion a year ago. Of this, $4.6 billion is expected to be completed within the next 12 months.

Should You Buy, Sell or Hold DY Stock?

While near-term headwinds like BEAD program uncertainty and broader market risks may weigh on sentiment, Dycom’s strong execution, recent project wins and focus on key growth areas provide meaningful support. The company’s expanding backlog, acquisitions, and rising demand across fiber and wireless markets position it well for future growth.

Existing stakeholders are advised to hold their positions in this Zacks Rank #3 (Hold) stock, while prospective investors should monitor how the company manages these challenges before investing. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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

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