DYCOM INDUSTRIES, INC. (DY): what the price assumes

In the published model solve dated 2026-Q2, anchored at $299.12, DYCOM INDUSTRIES, INC. (DY) is priced for +24.5% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/DY

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 11: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 8.9% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: n/a

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.9%); the inversion above states its own rate.

Per-Model Detail (n=16)

Economic-Unit Decomposition (Sum Of The Parts)

Only one reportable economic unit is present in the current topology source. Consolidated operating lenses remain available, but there is no multi-unit decomposition.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• One customer now supplies a quarter of the work: AT&T accounted for 25.4% of contract revenues in fiscal 2026, against 20.1% and 16.9% in the two years before it, and the four largest customers together account for well over half.
• Backlog is moving the right way: Communications backlog stood at 8,333.5 million dollars at January 31, 2026 against 7,759.9 million a year earlier, with the portion expected inside twelve months rising to 5,249.6 million from 4,642.5 million.
• Results are next due August 19, following a May quarter in which revenue of $1.96 billion cleared the $1.67 billion consensus for that quarter by a wide margin.

Bull Case

Three numbers tell the story of the last three years better than any paragraph could. Revenue from AT&T ran 706.5 million dollars, then 942.8 million, then 1,410.5 million. That is roughly half again in the most recent fiscal year alone, from a single customer, in a business where the work is measured in miles of buried fibre rather than in software seats. Something structural is happening in the ground beneath American telecom networks, and Dycom is the contractor doing a large share of the digging.

The backlog says it is not one good year. Communications backlog reached 8,333.5 million dollars at January 31, 2026 from 7,759.9 million twelve months earlier, and the slice management expects to convert inside the next year rose to 5,249.6 million from 4,642.5 million. That second figure is the more useful one, because it is near-dated work rather than a distant option, and it grew faster than the total. Backlog in this industry is an estimate rather than a contract, but a rising near-term estimate against a rising total is what an accelerating build looks like from the outside.

The most recent print did not merely confirm the trend, it outran it. First-quarter fiscal 2027 revenue came in at $1.96 billion against a consensus of $1.67 billion for the quarter. A specialty contractor beating a revenue estimate by that margin is not a pricing story. It is a volume story, which means crews are in the field and the schedule is running ahead of what the customer originally laid out.

The customer relationships behind that are broad even where the revenue is concentrated. The 10-K describes established relationships with "telephone companies, cable multiple system operators, wireless carriers, telecommunication equipment and infrastructure providers, as well as electric and gas utilities", and the work largely runs through master service agreements rather than one-off projects. That structure matters: a master service agreement makes the incumbent contractor the default choice for the next tranche of work, and switching contractors mid-build costs a carrier schedule it does not have to spare.

Underneath all of it, the returns are honest ones. Return on equity runs near 16.4% on book value of 62.40 dollars a share, and the share count has been essentially unchanged across four years. Nothing in the per-share progression comes from financial engineering. The forward-looking methods are the only ones that reach today's price, and that is precisely what a build cycle looks like to a backward-facing model: the earnings that justify the price have not happened yet, but the backlog that produces them has been signed.

Bear Case

Today's price is underwriting one specific future, and it is worth naming the single most fragile input in it. The price requires growth near the fastest pace this business could fund from its own cash, held for about seven years. The thing that would have to hold for seven years is a capital spending program controlled by a very small number of buyers. AT&T alone was 25.4% of contract revenues in fiscal 2026, up from 16.9% two years earlier. Verizon was 14.0%, Lumen 10.8%, Comcast 7.4%. And the 10-K is explicit about what those relationships are and are not: "Generally, our customers are not contractually committed to procure specific volumes of services".

The concentration is about to tighten rather than loosen. Verizon completed its acquisition of Frontier Communications on January 20, 2026, and AT&T completed its acquisition of substantially all of the mass markets fiber business from Lumen Technologies after fiscal 2026 closed. Two of the four names on that list are being folded into the other two. The company states the position without decoration: it believes "a substantial portion of our total contract revenues and operating income will continue to be generated from a concentrated group of customers". Fewer buyers with larger programs is good for volume in the build phase and unhelpful in the negotiation that follows it.

Then there is the arithmetic of persistence. The pace the price assumes runs above what this company has actually delivered over its own history, and of the fast growers it can be measured against, only about 21% held a comparable pace for roughly seven years. The assumption is also brittle in a way that has nothing to do with the business: add one percentage point to the return a buyer demands and the implied runway shortens by roughly two years. When two years of a seven-year assumption hinge on a discount rate, the estimate is not measuring the company so much as the environment.

Industry economics set the ceiling on how forgiving a disappointment could be. PWR converts 5.7% of revenue into operating profit on sales of 30.12 billion dollars while growing 21.1%, PRIM manages 4.9% on 7.49 billion, MYRG 5.2% on 3.82 billion, and MTZ under 1% on 15.28 billion. Specialty contracting runs on thin single-digit conversion because the work is bid, the labour is the cost, and the customer owns the schedule. A business with that structure does not glide into a slowdown; it discovers idle crews.

Seasonality and leverage complete the picture. Net debt sits near 2.28 billion dollars, and the 800 million dollar senior secured term loan carried a weighted average rate of 5.43% at January 31, 2026. Meanwhile the filing warns that fewer available workdays and weather mean "we are most likely to experience reduced revenue and profitability or losses during the fiscal quarters ending in January". None of this threatens the next twelve months, which the backlog largely covers. The bear case has never been about the next twelve months. It is about years four through seven, which nothing in the current disclosure reaches.

Valuation

Only one family of method reaches this price. The forward-growth approaches get there; the asset-value, earnings-power and peer-multiple readings all land beneath it, with the price sitting about 83% above where peer multiples land and considerably further above the earnings-power reading. That configuration always means the same thing: what is being paid for is durability that static frames structurally cannot see. Here the premium is unusually wide even by that standard.

Put in plain terms, the enterprise is carried at roughly 34 times trailing profit before tax, which works backward to growth near 25% a year, about the fastest pace the business could fund from its own cash, sustained for something like seven years. The historical record on that is thin: only about 21% of comparable fast growers held a pace like that that long, and the assumed pace runs above what this company has itself delivered. The multiple also sits at the very top of the specialty contracting peer set, beyond the upper quartile of it.

The peer numbers explain why that placement is worth pausing on. PWR grows 21.1% on revenue of 30.12 billion dollars at a 5.7% operating margin, and STRL grows 37.0% on 2.88 billion at 16.9%. Growth comparable to Dycom's is not scarce in this cohort. What is scarce is a multiple like this one attached to it, which means the market is distinguishing Dycom from its peers on something other than growth rate, most plausibly on the visibility of the fibre program it serves.

The concrete version of "what has to be true" here is a customer roster rather than a ratio. AT&T supplied 25.4% of contract revenues in fiscal 2026, against 16.9% two fiscal years earlier. For the seven-year assumption to pay, that program has to keep running near its current pace and then be replaced by something comparable when it completes. Backlog covers the near end of that: of 8,333.5 million dollars of Communications backlog at January 31, 2026, 5,249.6 million was expected within twelve months. The filing is careful to note those estimates "can be subject to change due to a number of factors, including contract cancellations", and in any case they say nothing about year five.

Solvency is adequate rather than decisive. Net debt runs near 2.28 billion dollars against liquid assets near 539 million, the 800 million dollar term loan carried a weighted average rate of 5.43% at January 31, 2026, and the credit agreement leaves room for up to 927.0 million dollars of incremental facilities. The share count has barely moved in four years, so borrowing has funded expansion rather than buybacks. In a build cycle that is the correct use of a balance sheet. It also means the capacity added is fixed while the revenue that pays for it is not.

Catalysts

The next scheduled event is second-quarter results on August 19, 2026. They follow a first quarter reported on May 27 in which revenue reached $1.96 billion against a $1.67 billion consensus for that quarter. After a beat of that size, the question in August is whether the schedule acceleration was pulled forward from later quarters or added to the year.

Two customer transactions reshape who signs the contracts. Verizon completed its acquisition of Frontier Communications on January 20, 2026, and AT&T completed its acquisition of substantially all of the mass markets fiber business from Lumen Technologies after the fiscal year closed. Both consolidations put work that was previously spread across four buyers under two, and the practical question is whether the acquirers keep the acquired build programs running at the same pace or re-plan them.

Backlog conversion is the measure to track through all of it. Communications backlog stood at 8,333.5 million dollars at January 31, 2026, of which 5,249.6 million was expected inside twelve months, against 7,759.9 million and 4,642.5 million the year before. The disclosure comes with its own caveat, since those estimates "can be subject to change due to a number of factors, including contract cancellations", and the quarter ending in January is seasonally the weakest of the four. A backlog that keeps rising through the August and November prints would say the fibre program still has years to run.

Peer Cohorts (Per Segment, With Filing Citations)

Specialty Contracting Services (consolidated) (reported)

• MTZ (MasTec, Inc.)
• FY2025 10-K: …Policies, Note 14 - Segments and Related Information and Note 15 - Commitments and Contingencies in the notes to the audited consolidated financial statements, which are incorporated by reference, for revenue concentration information. We also derive a significant portion of our revenue from multi-year master service…
• FY2025 10-K: …as well as pipeline integrity, including the repair of pipeline infrastructure and facilitating their safe use throughout their lifecycle, and other services for the energy and utilities industries. The Other segment includes certain equity investees, the services of which may vary from those provided by the…
• PWR (Quanta Services, Inc.)
• FY2025 10-K: …or the issuance of change orders and/or assertion of contract claims against customers. See Contract Estimates and Changes in Estimates in Note 4 of the Notes to Consolidated Financial Statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report. Subcontract work and provision of…
• FY2025 10-K: …the required information is shown in the consolidated financial statements or the notes to the consolidated financial statements in Item 8. Financial Statements and Supplementary Data in Part II of this Annual Report on Form 10-K. (3) Exhibits. 115 EXHIBIT INDEX Exhibit No. Description 2.1 - Agreement and Plan of…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …such as pipe, solar panels, turbines, boilers and vessels, are typically supplied by the customer. ​ Substantially all of our gas and electric distribution and communication services are provided pursuant to renewable MSAs on a "unit-price" basis. Fees on unit-price contracts are negotiated and earned based on units…
• FY2025 10-K: …​ The caption "Contract liabilities" in the Consolidated Balance Sheets represents the following: ​ ● deferred revenue on billings in excess of contract revenue recognized to date, and ​ ● the accrued loss provision. ​ Contract liabilities consist of the following (in millions): ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​…
• IESC (IES Holdings, Inc.)
• FY2025 10-K: …of materials at specified intervals at a fixed price over the term. As of September 30, 2025, we had firm commitments of $13.4 million outstanding under agreements to purchase materials over the next 12 months in the ordinary course of business. Many of our customers require us to post performance and payment bonds…
• FY2025 10-K: …Leverage Ratio, in accordance with the following thresholds: Pricing Level Consolidated Total Leverage Ratio Interest Margin applicable to Daily Simple SOFR/Term SOFR Interest Margin applicable to Base Rate I Greater than or equal to 2.50 to 1.00 2.25 percentage points 1.25 percentage points II Greater than or equal…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …services as a subcontractor to general contractors in the C&I industry, but also contracts directly with facility owners. 79 TABLE OF CONTENTS The information in the following tables are derived from the segment's internal financial reports used for corporate management purposes: For the Year ended December 31, 2025…
• FY2025 10-K: …reversal may occur, the Company uses constraint in recognizing revenue on variable consideration. The Company often enters into contracts that contain liquidated damage clauses. The Company does not include amounts associated with liquidated damage clauses until it is probable that liquidated damages will occur.…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …in RHB at December 31, 2024 and thereafter, as a single line item ("Investment in unconsolidated subsidiary") in the Consolidated Balance Sheets. RHB's revenue is no longer included in Sterling's consolidated revenue in 2025 and Sterling's consolidated remaining performance obligations ("RPOs") as of December 31,…
• FY2025 10-K: …partner's performance issues, the customer may terminate the project, which could result in legal liability to us, harm to our reputation and reduce our profit on a project. Certain counterparties to construction joint venture arrangements, which may include our historical direct competitors, may not desire to…
• GVA (GRANITE CONSTRUCTION INC)
• FY2025 10-K: …construction joint ventures on a pro rata basis in revenue and cost of revenue in the consolidated statements of operations. We record the corresponding investment balance in equity in construction joint ventures in the consolidated balance sheets except when a project is in a loss position, the investment balance is…
• FY2025 10-K: …from the customer are expensed as incurred and included in selling, general and administrative expenses in our consolidated statements of operations. Although unusual, pre-bid costs that are explicitly chargeable to the customer even if the contract is not obtained are included in accounts receivable in our…
• ROAD (Construction Partners, Inc.)
• FY2025 10-K: …to the customer and use the same measure of progress toward satisfaction of the performance obligation as the customer's asset is created or enhanced by the Company. Revenue recognized during a reporting period is based on the cost-to-cost input method applied to the total transaction price, including adjustments for…
• FY2025 10-K: …consolidated financial statements of Construction Partners, Inc. and its subsidiaries and the parent-only financial statements of Construction Partners, Inc. included herein at Item 8 are as follows: • Reports of Independent Registered Public Accounting Firm - RSM US LLP • Consolidated Balance Sheets as of September…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.