Why Dycom Industries Stock Was Soaring This Week
Key Points
It posted an excellent quarterly earnings report.
It also announced a highly strategic acquisition.
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Dycom Industries (NYSE: DY) stock was a hit with investors over the past few days. This was due mostly to an estimates-beating quarterly earnings report and an acquisition announced by the contracting services company.
According to data compiled by S&P Global Market Intelligence, Dycom's shares were trading almost 14% higher week-to-date as of early afternoon Friday.
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A record-busting quarter
Dycom's third quarter of fiscal 2026 featured some new all-time highs posted by the company. Among these were revenue, which rose 14% year-over-year to over $1.45 billion, and net income, as reported according to generally accepted accounting principles (GAAP). That line item grew by 34% to more than $106 million, or $3.63 per share.
Image source: Getty Images.
The two key fundamentals came in above the consensus analyst estimates. On average, pundits tracking Dycom stock were modeling $1.40 billion in revenue and $3.15 per share for profitability, according to Zacks.
Management attributed the company's growth primarily to the increased need for its services. The company stated that demand for telecom and data infrastructure is at historic highs, driven by factors such as fiber network build-outs and the greater resource requirements of data centers.
Dycom also raised its top-line guidance for the full fiscal year. It's now expecting revenue to be between $5.35 billion and $5.43 billion for the period, which would represent year-over-year growth of at least 13.8%.
Separately, Dycom announced it is acquiring privately held Power Solutions, an electrical contracting company active in the Mid-Atlantic region that specializes in that popular data center segment. The cost of the purchase is $1.95 million, roughly $293 million of which is to be effected in Dycom stock.
Providing the right kinds of services
Given that Dycom is a business notching new all-time highs and doubling down on a white-hot client segment (data centers), it seems that the investor reaction should have been more positive. These days, Dycom appears to be an excellent pick-and-shovel play on the explosive growth of data center construction and expansion; investors should definitely consider its stock for a buy.
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Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
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