2 Reasons to Watch DY and 1 to Stay Cautious

October 10, 2025 at 00:03 AM EDT

DY Cover Image

The past six months have been a windfall for Dycom’s shareholders. The company’s stock price has jumped 91.8%, hitting $289.68 per share. This was partly due to its solid quarterly results, and the run-up might have investors contemplating their next move.

Is now still a good time to buy DY? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free for active Edge members.

Why Does DY Stock Spark Debate?

Working alongside some of the most popular mobile carriers in the world, Dycom (NYSE: DY) builds and maintains telecommunications infrastructure.

Two Things to Like:

1. Long-Term Revenue Growth Shows Momentum

Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years. Thankfully, Dycom’s 8.9% annualized revenue growth over the last five years was decent. Its growth was slightly above the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Dycom’s EPS grew at an astounding 28% compounded annual growth rate over the last five years, higher than its 8.9% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

One Reason to be Careful:

Low Gross Margin Reveals Weak Structural Profitability

At StockStory, we prefer high gross margin businesses because they indicate the company has pricing power or differentiated products, giving it a chance to generate higher operating profits.

Dycom has bad unit economics for an industrials business, signaling it operates in a competitive market. As you can see below, it averaged a 18.5% gross margin over the last five years. Said differently, Dycom had to pay a chunky $81.50 to its suppliers for every $100 in revenue. Dycom Trailing 12-Month Gross Margin

Final Judgment

Dycom has huge potential even though it has some open questions, and after the recent surge, the stock trades at 27.4× forward P/E (or $289.68 per share). Is now the time to buy despite the apparent froth? See for yourself in our in-depth research report, it’s free for active Edge members.

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