Construction Partners (ROAD) has just combined a strong quarterly update with a raised full year outlook, after reporting higher first quarter sales and a move from loss to profit compared with a year earlier.

The strong quarterly beat and upgraded guidance have coincided with a sharp pick up in momentum, with a 1 month share price return of 14.62% and a 1 year total shareholder return of 66.51% building on a very large 5 year total shareholder return.

If this kind of sustained run in ROAD has caught your eye, it could be a good time to broaden your watchlist with our screener of 22 top founder-led companies.

With ROAD trading close to analyst targets after a very large multi year run and upgraded guidance, you have to ask yourself: is there still mispricing here, or are markets already baking in the next leg of growth?

Most Popular Narrative: 5.3% Overvalued

Construction Partners last closed at $134.21, compared with a most followed narrative fair value of about $127.43. This frames the latest run in the share price.

Ongoing vertical integration through investment in owned asphalt plants and material sourcing combined with increasing scale, is already enhancing operational efficiencies and margin expansion, as shown by record adjusted EBITDA margins despite weather disruptions. This is expected to drive higher net margins and improved earnings resilience.

Read the complete narrative. Read the complete narrative.

Curious what kind of revenue climb, margin lift, and future earnings multiple are baked into that fair value? The core assumptions might surprise you.

Result: Fair Value of $127.43 (OVERVALUED)

However, you also have to weigh risks such as Construction Partners’ reliance on public infrastructure funding and its concentration in Southeast and Sunbelt states.

Build Your Own Construction Partners Narrative

If you see the story differently or just want to test your own assumptions against the data, you can build a personalised ROAD view in minutes: Do it your way.

A great starting point for your Construction Partners research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.