DYCOM INDUSTRIES, INC. (DY): what the price requires
At today's price, DYCOM INDUSTRIES, INC. (DY) is priced for today's economics sustained for ~6.9 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/DY
Headline
| Field | Value |
|---|---|
| Ticker | DY |
| Company | DYCOM INDUSTRIES, INC. |
| Current price | $409.22/sh |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 3.8% |
| Operating margin today | 7.5% |
| Margin compression implied | -3.7pp |
| Must persist for | 6.9y |
| Multiple paid | 32x operating income |
The operating-margin requirement is derived from the framework's value band at year 11, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 9.4% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~1.9 years.
How unusual the bet is: high
| Reference | Value |
|---|---|
| vs own history | +2.13σ |
| cohort percentile (of 225 peers) | 73 |
| sustained it ~6.9 years at this level | 22% |
| implied end-window share | 0% |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 3.09x | 4 | expensive |
| Earnings | 4.51x | 4 | expensive |
| Relative | 1.79x | 5 | expensive |
| Growth | 0.67x | 3 | justifies |
Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=16)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $682.94 | 0.60x | yes | FCF base $0.5B, growth 25% (input: historical growth), terminal g 4.0%, WACC 8.3%, 7yr projection |
| DCF Exit Multiple | Growth | $571.32 | 0.72x | yes | Exit EV/EBITDA: 43.1x / 46.1x / 49.1x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | $228.83 | 1.79x | yes | P/E 24.58x (blended: static sector reference 18x + trailing (TTM) 40x), scenarios: 19.7x / 24.6x / 29.5x (bear / base = reference held flat / bull), EV/EBITDA 22.24x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $110.81 | 3.69x | yes | BV/sh $62.40, ROE (TTM) 16.4%, ke 9.3% |
| Two-Stage Excess Return | Asset | $145.77 | 2.81x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $610.34 | 0.67x | yes | Rev $6.3B, growth 30% (input: historical growth; tapered), Terminal P/S: 1.6x / 2.0x / 2.4x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $225.59 | 1.81x | yes | EPS $10.47, growth 22% (input: historical EPS growth), PEG=1.85 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | — | — | no | — |
| Residual Income | Asset | $147.56 | 2.77x | yes | BV $62.40 + 5yr PV of (ROE (TTM) 16.4% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $121.24 | 3.38x | yes | √(22.5 × EPS $10.47 × BVPS $62.40) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $46.53 | 8.79x | yes | EBITDA $0.32B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $75.69 | 5.41x | yes | FCF $440.3M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $62.90 | 6.51x | yes | SBC-adj FCF $0.40B (FCF $0.44B − SBC $0.04B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $337.83 | 1.21x | yes | EPS $10.47 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | — | — | no | — |
| P/Sales Sector | Relative | $514.45 | 0.80x | yes | Revenue $6.25B × sector P/S 2.5x |
| PEG Fair Value | Relative | $338.39 | 1.21x | yes | EPS $10.47 × (PEG 1.5 × growth 21.5% (input: historical EPS growth)) → PE 32.3x |
| Earnings Yield | Earnings | $113.19 | 3.62x | yes | EPS $10.47 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $2.3b |
| Net debt / NOPAT (after-tax) | 5.84x |
| Net debt / operating income (pre-tax) | 4.99x |
| Share count CAGR (dilution) | 0.2% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
Dycom is executing at a peak: record fiscal Q1 2027 revenue of $1.965 billion (up 56.1%, 24.7% organic), adjusted EPS of $4.42, a record $11.9 billion backlog, a 2.2x book-to-bill, and a raised full-year outlook of $7.38 to $7.65 billion.
The structural risk is the business model: a thin roughly 7.3% operating margin, about $2.46 billion of net debt, and a highly concentrated customer base (top five customers near 55% of revenue), all riding cyclical fiber and data-center construction demand.
Bull Case
Lead with the fear, because it is the real one: Dycom is a thin-margin specialty contractor (operating margin around 7.3%) whose revenue is concentrated in a handful of large telecom customers, and at $456.64 the stock has been bid up to a multiple that assumes the current building boom never ends. That is a legitimate worry. But the data, for now, are running hard in the bulls' favor, and the question is whether the fear or the momentum is the better guide. Fiscal Q1 2027 revenue was a record $1.965 billion, up 56.1% year over year and 24.7% organically, with adjusted EPS of $4.42. A contractor does not grow organic revenue at 25% by accident; it grows that fast because demand is overwhelming its capacity.
The backlog turns that momentum into visibility, which is the heart of the bull case for a project business. Dycom ended the quarter with a record total backlog of $11.9 billion, up 25% sequentially, a book-to-bill of 2.2 times, meaning it signed more than twice as much new work as it completed. Backlog represents services to be performed under master service agreements and other contracts [DY FY2025 10-K, accession 0000067215-25-000012], so this is contracted, identifiable demand, not a hopeful pipeline. Management raised its full-year fiscal 2027 outlook to $7.38 to $7.65 billion on the strength of it.
The demand drivers are secular and large. Fiber-to-the-home deployment is in a multi-year buildout, and AI-related data center infrastructure has emerged as a powerful new source of construction demand, with management pointing directly to AI infrastructure as a tailwind. Dycom is also expanding through M&A, agreeing to acquire National Technology Integrators for $275 million, and it has been buying back its own stock (share count actually shrank). A specialty contractor with record backlog, 25% organic growth, fiber and data-center demand behind it, and a 2.2x book-to-bill is exactly the kind of operator whose value the static methods cannot capture, which is why only the growth methods reach the price.
Bear Case
The structural caution on Dycom is what kind of business it is underneath the growth: a low-margin, capital-and-labor-intensive contractor carrying real leverage, with its fortunes tied to a few customers' spending decisions. Net debt is about $2.46 billion against $3.0 billion of gross debt, and the operating margin is roughly 7.3%, the thin spread typical of construction. That combination is fragile in a way the current numbers obscure: when a leveraged, thin-margin contractor hits a demand air pocket, the fixed debt service does not shrink with revenue, and a few points of margin compression on a 7% base is the difference between healthy and distressed. The balance sheet is fine while the boom runs; it is exposed the moment the boom pauses.
The customer concentration is the structural fault line. Dycom's own filing is blunt: its customer base is highly concentrated, with the top five customers accounting for roughly 55% of total revenue [DY FY2025 10-K, accession 0000067215-25-000012]. When more than half the revenue depends on the capital-spending plans of five large telecom and infrastructure buyers, any one of them cutting its fiber budget, switching vendors, or pausing a build hits the top line hard. Telecom capital spending is itself cyclical and program-driven, and the fiber buildout that is fueling today's record backlog is, by its nature, a finite project that will eventually be substantially complete.
The valuation leaves no margin for that to happen. At $456.64 (June 27, 2026) the stock trades at roughly 35 times operating income, the inversion has to assume the elevated economics persist for about eight years, and the priced-in assumption is genuinely stretched against the company's own history, with the rarity and fade signals both tripped and the composite reading high. The static methods sit far below the price (the earnings-power frame implies the price is roughly five times no-growth value), and only the growth-DCF reaches it. The bear case is straightforward: a cyclical, concentrated, leveraged, thin-margin contractor is being priced at peak demand as if peak demand is permanent. If fiber spending normalizes, a major customer pulls back, or the data-center surge cools, the same operating leverage that produced 56% growth works in reverse against a balance sheet that depends on the work continuing.
Valuation
Dycom is a durability-premium valuation stretched to an unusual degree, and the signals say so. At $456.64 the inversion prices the business at roughly 35 times operating income and runs in duration mode, requiring the elevated economics to persist for about eight years. The composite reads high, and critically the rarity signal is tripped with a high positive reading, meaning the priced-in assumption is genuinely unusual against the company's own history, not merely full. The fade signal is also tripped.
The method families confirm the stretch. The asset, earnings-power, and peer-multiple frames all sit well below the price (the earnings-power frame implies roughly five times, the asset frame about three and a half times), and only the growth-DCF reaches it by extrapolating the recent 30%-plus revenue growth. The blended estimate lands near $235, roughly half the price. That gap is the entire premium, and it is a bet that a thin-margin contractor sustains boom-level economics for the better part of a decade.
The practical read: the business is executing extraordinarily well (record $1.965 billion quarter, $11.9 billion backlog, 2.2x book-to-bill, raised guidance), and a contractor riding the fiber and data-center buildouts can justify a premium while the work flows. But the price is not just paying a premium; it is paying a peak multiple on peak demand for a cyclical, concentrated, leveraged business. The valuation works only if the buildout proves durable and the customer base holds, and the rarity flag is the model's way of saying the assumption embedded in the price is far out on the distribution.
Catalysts
The most recent catalyst was a record fiscal Q1 2027 report that sent the stock up about 25%. Contract revenues reached $1.965 billion, up 56.1% year over year and 24.7% organically, with net income of $91.3 million ($3.00 GAAP diluted EPS) and non-GAAP adjusted net income of $134.3 million ($4.42 adjusted EPS). The company ended the quarter with a record total backlog of $11.9 billion, up 25% sequentially, for a book-to-bill of 2.2 times, and raised its full-year fiscal 2027 revenue outlook to $7.38 to $7.65 billion, with Q2 revenues guided to $1.94 to $2.01 billion.
The demand drivers are the forward catalysts. Management cited a multi-year fiber-to-the-home deployment and strong AI-related data-center infrastructure demand as the engines behind the record backlog, with CEO Dan Peyovich also pointing to investment in skilled-trades training and recruiting to staff the work. The conversion of the $11.9 billion backlog into revenue, the cadence of new master service agreement awards, and any signs of fiber or data-center spending acceleration or deceleration are the key items to track.
M&A and capital allocation are additional catalysts. Dycom agreed to acquire National Technology Integrators for $275 million, extending its capabilities, and has been repurchasing shares. The watch items on the risk side are customer concentration (a pullback by any of the top customers would be material), the durability of the fiber buildout as it matures, and margin trends in a thin-margin, leveraged contractor. The next quarterly backlog and organic-growth prints are the near-term markers of whether the boom is continuing.
Sources: https://www.stocktitan.net/news/DY/dycom-industries-inc-reports-record-first-quarter-results-and-raises-x7odpliuozca.html , https://www.benzinga.com/insights/news/26/05/52809073/dycom-industries-reports-q1-2027-results-full-earnings-call-transcript , https://www.tikr.com/blog/dycom-industries-rose-25-after-q1-2027-earnings-heres-where-the-stock-could-go , https://www.theglobeandmail.com/investing/markets/stocks/DY/pressreleases/2203067/dycom-dy-q1-2027-earnings-call-transcript/
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.
- 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.