Bear of the Day: Cardinal Infrastructure (CDNL)

Cardinal Infrastructure Group Inc. CDNL is expanding its construction business. But this Zacks Rank #5 (Strong Sell) has seen earnings estimates cut in the last week.

Cardinal Infrastructure Group delivers its suite of comprehensive infrastructure services that support the planning, preparation, installation, and development of residential, commercial, industrial, municipal, and state infrastructure projects.

Cardinal's operations leverage in-house, skilled teams and equipment fleets to deliver wet utility installations (water, sewer, and stormwater systems), as well as grading, site clearing, erosion control, drilling and blasting, paving, and other related site services.

Cardinal to Acquire Hughes Brothers Construction for $357.5 Million

On Oct 13, 2026, Cardinal announced it had entered into an agreement to acquire Hughes Brothers Construction Inc., which is a Central Florida heavy civil and site development contractor.

The deal was modified on Oct 19, 2026. The amended agreement maintained the $357.5 million purchase price but changed the consideration to 60% cash and 40% common stock, from 50% of each previously.

The acquisition is expected to be immediately accretive to adjusted EBITDA per share.

Hughes Brothers had a current backlog of approximately $350 million. It establishes a platform in the fast-growing Central Florida market.

This comes on top of the acquisition of Allied Paving, which was announced on Aug 11, 2026. Allied Paving is an Atlanta-based paving and heavy site construction contractor.

Why is Cardinal Infrastructure Group a Strong Sell?

The Zacks Rank is based on changes to analyst earnings estimates.

One estimate has been cut on Cardinal for both 2026 and 2027 in the last week. In 2026, it pushed the Zacks Consensus Estimate down to $1.77 from $1.85 during that time.

That doesn’t seem so bad. But the most accurate estimate, which is the most recent, has the 2026 earnings at $1.52 versus the $1.77 consensus.

One estimate was also cut for 2027 in the last week. It pushed the Zacks Consensus down to $2.16 from $2.28. That’s earnings growth of 22.1%, however.

Here’s what it looks like on the price, consensus, and surprise chart.

Cardinal Shares Sink

Cardinal Infrastructure Group got caught up in the AI stock rally in early summer and in the AI stock sell-off of the last several months.

Here’s the 6-month chart.

Shares are now cheap. Cardinal trades with a forward price-to-earnings (P/E) ratio of 8.3. A P/E under 10 usually indicates a company has deep value.

Cardinal Infrastructure has not yet reported its third quarter of 2026 earnings.

Cardinal seems like a deal. But until the earnings estimates turn around, value investors might want to wait on the sidelines for a stronger entry point.

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

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