Al Root

Dycom Industries stock rose early Wednesday after posting better-than-expected fiscal fourth-quarter numbers and offering strong guidance for the coming year.

The company's telecom and data center businesses are firing on all cylinders, enabling it to grow sales and profit margins.

On Wednesday, the engineering and construction firm announced fiscal fourth-quarter earnings per share of $2.03 from sales of $1.46 billion. Wall Street was looking for $1.82 and $1.35 billion, respectively, according to FactSet.

A year ago, Dycom reported earnings per share of $1.17 from sales of just under $1.1 billion.

Earnings before interest, taxes, depreciation, and amortization, or Ebitda, profit margins were 11.1%, up 0.4 percentage points year over year.

For fiscal year 2027, which ends in January, management expects another year of Ebitda profit margin expansion and sales of $6.85 billion to $7.15 billion. The $7 billion midpoint is higher than Wall Street's current projection of $6.7 billion. Analysts also project Ebitda profit margin expansion to about 14%.

First-quarter 2027 sales are expected to be about $1.68 billion. Ebitda is expected to be about $210 million. Wall Street projects $1.6 billion and $208 million, respectively. (The first quarter is a seasonally weak period for the company.)

Dycom shares rose 1.5% in premarket trading to $409.69, while S&P 500 and Dow Jones Industrial Average futures were up 0.2% and 0.1%, respectively.

Coming into Wednesday trading, Dycom stock was up about 19% this year and up 164% over the past 12 months.

It isn't hard to figure out what's been driving the stock. Sales and earnings are growing as the telecom industry shifts from copper to fiber-optic cable and as hyperscalers spend hundreds of billions of dollars in an AI arms race.

Both trends show no signs of abating. Data center "demand is incredible...off the charts," says CEO Daniel Peyovich. "Even if it does taper...there is still a huge opportunity set for us going well into the future."

Dycom's sales grew about 16% in fiscal year 2026. Sales are expected to grow about 18% a year for the next three years, according to FactSet.

That's good news for investors, who have already enjoyed the benefits of rising demand.

Write to Al Root at allen.root@dowjones.com

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March 04, 2026 07:52 ET (12:52 GMT)

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