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While searching for a stock with a low valuation and strong expected future growth, I discovered Sterling Infrastructure (Nasdaq: STRL). The company had a positive Q2 2023 earnings report with increased future earnings estimates which should provide a catalyst for the stock. The long-term outlook for Sterling is likely to be positive as infrastructure spending is expected to be robust to 2027.

Sterling is involved in e-infrastructure, transportation, and building solutions in various regions in the United States. The company is involved in infrastructure projects such as roads, highways, airports, bridges, light rail, water/wastewater, and storm drainage systems. The company's customers include departments of transportation of various states, airports, port authorities, transit authorities, railroads, and water authorities.

Sterling's Positive Q2 2023 Results

Sterling's earnings results should have a positive influence on the stock over the next several months. Multiple positives came from Q2. Sterling's revenue increased by a robust 13%. Acquisitions accounted for 2% of total revenue, while organic growth comprised the other 11% in Q2.

Sterling achieved growth in each business segment during Q2. E-infrastructure is the largest segment and comprised 50% of Sterling's sales. E-infrastructure revenue increased 11% while operating margin for the segment increased 2.5% for a 32% increase in operating income. Growth in this segment was attributed to advanced manufacturing projects and data centers. The advanced manufacturing growth was driven by projects for Hyundai (OTCPK: HYMTF) and Rivian (RIVN).

The Transportation Solutions segment (29% of total revenue) achieved revenue growth of 5.9% and a 1.3% increase in operating margin contributing to operating income growth of 33%. This segment experienced a significant increase in aviation project bids in Q2.

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