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Arcosa - AI Stock Analysis

Analysis generated February 9, 2025

Arcosa, Inc. (NYSE: ACA) is a provider of infrastructure-related products and services with operations in the U.S. and internationally. The company's offerings span construction materials, engineered structures, and transportation products, positioning it as a significant player in the infrastructure sector. Established in November 2018 after being spun off from Trinity Industries, Arcosa constitutes a diversified industrial platform with a broad portfolio that supports multiple end markets, including construction, energy, and transportation.

Fundamental Analysis

Arcosa reported revenue of $640 million for the last quarter. While this represents an 8.23% increase compared to the same quarter last year, it is a 3.66% decrease from the previous quarter. This mixed signal suggests that although year-over-year growth is positive, the quarter-to-quarter revenue decline may warrant closer scrutiny.

Net income stood at $17 million in the last quarter, which signifies a substantial 63.60% decrease from the previous quarter and a 53.24% decrease from the same quarter last year. Such a notable reduction in net income indicates potential profitability issues, which could be a red flag for investors.

EBITDA for the last quarter was $34 million, marking a 67.84% decrease from the previous quarter and a 61.42% decrease year-over-year. This significant decline in EBITDA heightens concerns about the company’s operational efficiency and profit margins.

The current Price-to-Earnings (P/E) ratio is 39.37, which may be considered high. A higher P/E ratio generally suggests that the stock could be overvalued, leading to a bearish outlook and recommending caution for potential investors.

Technical Analysis

Currently, Arcosa's stock price is $101.70, which indicates a 7.12% increase over the past month. Over the span of a year, the stock has appreciated by 22.04%, suggesting a strong long-term bullish trend. The short- and long-term movements indicate a positive investor sentiment.

The Simple Moving Average (SMA) for 10 days is $101.65, which is slightly higher than the previous SMA10 of $101.65, suggesting an upward trend in stock price movement. Meanwhile, the Relative Strength Index (RSI) is currently 42.8, indicating a neutral condition. Historically, RSI values between 30 and 70 are deemed neutral, suggesting neither overbought nor oversold conditions.

Alternative Data Analysis

Reviewing alternative data, Arcosa maintains 214 open positions as indicated by job postings on major platforms. This number has remained stable, suggesting that the company is not undergoing significant expansion or contraction, indicative of a stable position.

Regarding customer acquisition, Arcosa's website garners approximately 9,000 visitors monthly with no notable change in recent months, pointing to stable, if not stagnant, customer engagement.

According to AltIndex’s AI score, which amalgamates fundamental, technical, and alternative data to gauge stock performance, Arcosa holds a score of 58. A score of 58 typically suggests a "hold" signal, indicating neither a strong buy nor a prompt sell recommendation.

Conclusion and Recommendation

Assessing Arcosa through multiple analytical lenses reveals a complex yet informative picture. While the revenue growth year-over-year is positive, significant decreases in net income and EBITDA highlight underlying challenges. The high P/E ratio suggests caution due to potential overvaluation. On the technical side, the stock exhibits a bullish trend over both short and long-term periods, endorsing a positive outlook for price movements. Alternative data relays a stable operational stance without notable changes in workforce dynamics or customer acquisition rates.

Based on the comprehensive analysis, it would be prudent to adopt a cautionary stance on Arcosa. The "hold" signal from the AI score aligns with a strategy of monitoring the stock closely for further developments while exercising caution in immediate buy or sell decisions.

Disclaimer: This AI stock analysis, generated by an experimental AI tool, is for informational purposes only and not financial advice. Information is based on publicly available data and may not always be accurate or current.