Construction Partners, Inc. (ROAD): A Bull Case Theory

We came across a bullish thesis on Construction Partners, Inc. on Danny’s Substack by Danny Green. In this article, we will summarize the bulls’ thesis on ROAD. Construction Partners, Inc.'s share was trading at $131.21 as of February 19th. ROAD’s trailing and forward P/E were 60.60 and 44.05 respectively according to Yahoo Finance.

Construction Partners, Inc., a civil infrastructure company, constructs and maintains roadways in Alabama, Florida, Georgia, North Carolina, Oklahoma, South Carolina, Tennessee, and Texas. ROAD is targeting an ambitious growth trajectory under its ROAD 2030 plan, aiming to double revenue to $6 billion by 2030, building on FY2025 revenue growth of 54% to $2.8 billion. The company benefits from a record $3.03 billion backlog and multi-year visibility from the Infrastructure Investment and Jobs Act (IIJA), though growth remains heavily reliant on acquisitions, and any slowdown in M&A activity could hinder this goal.

ROAD’s strategic positioning in the Sunbelt—where population growth exceeds the national average—provides a durable demand base, as road maintenance remains an evergreen requirement even with potential long-term shifts from autonomous vehicles or urban planning changes. The company’s vertically integrated model, owning over 90 asphalt plants and aggregate facilities, captures both manufacturing and contracting margins while mitigating supply chain risks, giving it a competitive edge despite local competition from larger players like Granite and Vulcan Materials.

ROAD’s “Family of Companies” culture preserves local leadership and relationships while providing capital for expansion, although rapid scaling and multiple acquisitions in 2025 test the resilience of this culture. Public DOTs value ROAD’s reliability, safety, and recycling initiatives, which also support ESG mandates. Adjusted EBITDA grew 92% in FY2025, and management targets expanding margins from 15.1% to 17% by 2030, leveraging acquisitions and existing plant capacity.

Capital deployment emphasizes accretive acquisitions at low multiples, with debt levels at ~185% of equity. In a best-case scenario, consolidating the Sunbelt and achieving $10B+ revenue with 18% margins could position ROAD as the “Waste Management of Roads,” potentially driving a fivefold market cap increase. The market’s current commodity perception underestimates ROAD’s logistics and manufacturing scale, creating a compelling risk/reward opportunity for disciplined investors.

Previously, we covered a bullish thesis on Quanta Services, Inc. PWR by Bulls On Parade in May 2025, which highlighted the company’s leadership in electric power infrastructure, AI-driven growth, strategic acquisitions, and strong free cash flow. PWR’s stock price has appreciated by approximately 89.47% since our coverage. Danny Green shares a similar view but emphasizes Construction Partners, Inc.’s ROAD ROAD 2030 plan, vertical integration, and Sunbelt-focused expansion as a durable, M&A-driven growth opportunity.

Construction Partners, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 26 hedge fund portfolios held ROAD at the end of the third quarter which was 27 in the previous quarter. While we acknowledge the risk and potential of ROAD as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than ROAD and that has 10,000% upside potential, check out our report about this cheapest AI stock.

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Disclosure: None.