Sterling Construction Company Inc (STRL)
Profitability ratios
Return on sales
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Gross profit margin | 21.08% | 20.14% | 19.55% | 18.04% | 17.56% | 17.12% | 16.27% | 15.79% | 14.64% | 14.30% | 13.95% | 13.33% | 13.47% | 13.58% | 13.46% | 13.66% | 13.91% | 13.41% | 12.50% | 11.81% |
| Operating profit margin | 13.23% | 12.51% | 12.27% | 11.01% | 10.72% | 10.43% | 9.67% | 9.20% | 8.25% | 8.00% | 7.28% | 6.79% | 6.73% | 6.78% | 7.10% | 7.27% | 7.30% | 6.65% | 5.87% | 5.02% |
| Pretax margin | 17.78% | 16.93% | 12.24% | 10.76% | 10.20% | 9.66% | 8.64% | 8.07% | 7.18% | 7.11% | 6.47% | 6.05% | 5.95% | 5.69% | 5.74% | 5.55% | 5.35% | 4.58% | 3.23% | 2.53% |
| Net profit margin | 12.62% | 12.17% | 8.77% | 7.85% | 7.47% | 7.03% | 6.16% | 5.66% | 4.99% | 4.95% | 4.56% | 4.33% | 4.25% | 3.96% | 3.77% | 3.56% | 3.44% | 2.96% | 4.12% | 3.86% |
The profitability ratios of Sterling Construction Company Inc demonstrate a consistent upward trend over the analyzed period, indicating progressive improvements in the company's ability to generate profits relative to its sales and revenues.
Gross Profit Margin:
The gross profit margin has steadily increased from approximately 11.81% as of June 30, 2020, to 21.08% by March 31, 2025. This reflects not only improved cost management concerning direct costs of construction but also potential enhancements in pricing strategies or project mix. The margin growth signifies enhanced efficiency in controlling production costs and a stronger ability to convert sales into gross profits.
Operating Profit Margin:
Similarly, the operating profit margin has experienced a positive trajectory, rising from 5.02% at June 30, 2020, to 13.23% at March 31, 2025. The nearly doubling of this ratio suggests that the company is becoming more effective in managing operating expenses, including overheads, administrative costs, and other operating costs, thereby contributing to improved core profitability.
Pretax Margin:
The pretax margin has shown a meaningful uplift from 2.53% in June 2020 to 17.78% in March 2025. This significant increase indicates better control over non-operating expenses, financial costs, or improvements in other income components. The rising pretax margin reflects the company's enhanced capacity to translate operating success into pre-tax profits.
Net Profit Margin:
The net profit margin has also demonstrated a positive pattern, moving from 3.86% as of June 2020 to 12.62% at March 2025. The sharp increase towards the latter part of the period suggests that, after accounting for all expenses, including taxes, the company is increasingly efficient in converting revenues into bottom-line profits.
Overall Analysis:
Collectively, these profitability ratios reveal a compelling narrative of sustained profitability enhancement for Sterling Construction Company Inc. The consistent improvement across gross, operating, pretax, and net margins signifies effective cost management, operational efficiencies, and potentially favorable market conditions or project margins. The notable acceleration in margins towards 2024 and 2025 suggests strategic advantages or operational improvements that position the company well for future profitability.
Return on investment
| Mar 31, 2025 | Dec 31, 2024 | Sep 30, 2024 | Jun 30, 2024 | Mar 31, 2024 | Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Operating return on assets (Operating ROA) | 13.69% | 13.12% | 12.76% | 11.59% | 11.85% | 11.58% | 10.85% | 11.33% | 11.07% | 10.69% | 9.10% | 8.95% | 9.08% | 8.72% | 10.19% | 10.24% | 11.14% | 9.96% | 8.19% | 6.58% |
| Return on assets (ROA) | 13.07% | 12.77% | 9.11% | 8.27% | 8.26% | 7.80% | 6.91% | 6.97% | 6.69% | 6.62% | 5.70% | 5.71% | 5.74% | 5.09% | 5.41% | 5.02% | 5.25% | 4.44% | 5.75% | 5.07% |
| Return on total capital | 46.58% | 43.86% | 34.80% | 32.06% | 34.32% | 34.23% | 33.18% | 33.73% | 33.06% | 33.79% | 33.58% | 31.90% | 31.32% | 30.91% | 35.81% | 37.72% | 41.03% | 38.42% | 33.84% | 30.11% |
| Return on equity (ROE) | 33.01% | 31.86% | 25.74% | 24.22% | 23.28% | 22.40% | 20.53% | 20.33% | 19.36% | 20.10% | 19.59% | 19.06% | 18.98% | 17.46% | 17.89% | 17.31% | 18.08% | 15.83% | 22.82% | 21.53% |
The analysis of Sterling Construction Company Inc.'s profitability ratios over the period from June 30, 2020, through March 31, 2025, reveals a generally positive trend, with notable fluctuations and progressive improvements in key profitability metrics.
Operating Return on Assets (Operating ROA):
The Operating ROA exhibits a consistent upward trajectory, indicating enhanced efficiency in generating operating income relative to the assets employed. Starting at 6.58% on June 30, 2020, it steadily increases, surpassing 8% in September 2020, and approaching 11.58% by the end of 2023. The upward momentum continues into 2024 and early 2025, reaching 13.69% on March 31, 2025. This indicates the company's core operational activities are becoming increasingly effective at converting assets into operating income.
Return on Assets (ROA):
ROA, a broader measure including all income before taxes and interest, follows a similar but more subdued upward trend. It begins at 5.07% in June 2020, with fluctuations but a general rise to 7.80% by December 2023, and further increasing to approximately 13.07% by March 2025. This suggests improvements not only in operating efficiency but also in overall profitability after considering non-operating factors.
Return on Total Capital:
This ratio demonstrates the company's ability to generate profit from all capital invested, including both debt and equity. The data shows a significant escalation from about 30.11% on June 30, 2020, to approximately 46.58% on March 31, 2025. Despite some periodic fluctuations—such as a temporary decline around the second half of 2021—the trend highlights increasing efficiency in utilizing total capital to produce profits.
Return on Equity (ROE):
ROE ratios reflect the company's capacity to generate returns for shareholder equity. Initially at 21.53% on June 30, 2020, it experiences some variability, with dips and rises, but overall, it progresses, reaching 33.01% by March 31, 2025. The data indicates an enhancement in shareholder returns, aligned with the company's improving operational and capital efficiency.
Summary:
Collectively, the ratios suggest that Sterling Construction Company Inc. has demonstrated a sustained improvement in profitability over the period analyzed. The upward trend in Operating ROA, ROA, Return on Total Capital, and ROE points to increased operational efficiency, better utilization of assets and capital, and higher returns to shareholders. Variations within the period are relatively moderate, indicating periods of adjustment or strategic realignment, but the overarching pattern reflects a positive growth trajectory in profitability metrics.