Can Great Lakes Dredge & Dock Navigate Offshore Delays?

Great Lakes Dredge & Dock Corporation GLDD has been witnessing delays in offshore projects, especially in the offshore wind market of the United States, over the past year. These projects, being mainly government-backed, have amplified the risk factors in the form of regulatory, financial and logistical challenges. In April 2025, GLDD was hit by a temporary pause on Equinor's Empire Wind 1 project by the U.S. government, which is currently considered in its offshore energy backlog. This sudden pause created uncertainty around the project’s timeline, thus hurting GLDD’s revenue visibility.

However, Great Lakes Dredge & Dock did not sit idly surrounded by such uncertainties and underwent strategic efforts to expand its offshore wind business in the international markets. After recognizing indications toward possible delays in the U.S. offshore wind market in 2024, the company started shifting its focus to international markets, including the UK, European Union and Asia, for offshore wind projects. GLDD’s subsea rock installation vessel, Acadia, which is expected to be delivered by 2026, now includes domestic and international target markets for offshore wind projects.

Moreover, apart from expanding geographical reach, GLDD has also shifted its focus to rock protection projects for critical subsea infrastructure such as oil and gas pipelines and power and telecommunication cables. This portfolio diversification move ensures a diversified revenue stream for the company, thus minimizing the risks of payment failures from project delays in one market. With these strategic focal shifts, alongside fleet modernization efforts and robust market trends, Great Lakes Dredge & Dock is well-positioned to offset the adverse impacts of offshore project delays and elevate revenue visibility in the long term.

GLDD Stock’s Price Performance vs Other Market Players

Shares of this dredging service provider have trended upward 48.2% in the past three months, underperforming the Zacks Building Products - Heavy Construction industry but outshining the broader Zacks Construction sector and the S&P 500 index. The detailed price performance can be studied from the chart below.

Other renowned market players that compete with GLDD in the coastal, marine and other-related infrastructure segments include Granite Construction Incorporated GVA and Jacobs Solutions Inc. J. Realizing benefits from the robust market trends for public infrastructure, shares of Granite Construction and Jacobs have gained 29.9% and 18.4%, respectively, in the past three months.

GLDD’s Discounted Valuation Trend

GLDD’s current valuation looks promising for investors. The stock is currently trading at a discount compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 12.52X. The discounted valuation of the stock, compared with its peers, advocates for an attractive entry point for investors. That said, in the long term, the valuation could move toward a premium, given the strong market fundamentals backing the company’s revenue visibility and profitability.

Notably, Granite Construction and Jacobs are currently trading at a forward 12-month P/E ratio of 14.5X and 19.74X, respectively, which is higher than the current valuation trend of Great Lakes Dredge & Dock.

Earnings Estimate Revision of GLDD

GLDD’s earnings estimates for 2025 and 2026 have trended upward in the past 60 days by 39.1% to 96 cents per share and 14.5% to 95 cents per share, respectively. The estimated figure for 2025 implies 14.3% year-over-year growth, with the same for 2026 indicating a 0.4% decline.

The stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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

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