Will the inclusion of this contract in the third‑quarter CAP materially move the company's projected EBITDA or net income?

Impact on EBITDA / Net Income

Granite Inc. (GVA) reports annual revenues in the $2‑3 billion range with FY‑2024 EBITDA in the low‑hundreds of millions of dollars. A $13 million contract—once it flows through the third‑quarter Capital Allocation Plan (CAP) – represents only about 0.5–0.8 % of quarterly revenue and well under 2 % of annual EBITDA. Even assuming the full contract margin contributes a typical 10‑15 % gross margin, the incremental contribution to EBITDA would be roughly $1.3‑$2 million. After accounting for typical project‑level overhead and taxes, the net‑income boost would be on the order of $0.8‑$1.5 million, i.e., far less than 1 % of the company’s projected FY‑2024 net income. In other words, the contract is not material to the company’s EBITDA or net‑income projections; it is a modest add‑on that will be folded into the existing guidance envelope.

Trading Implications

The market has already priced the positive but modest nature of the deal (the news carries a 70 % sentiment rating). Expect only a slight uptick in the share price—typically a few‑tens of basis points—if the market had not yet accounted for the incremental earnings. The real driver for the next move will be broader macro‑conditions (e.g., infrastructure spending, Fed policy) and Granite’s overall pipeline. For traders, the contract does not justify a position shift; it supports a “hold‑or‑light‑long” thesis. If you are already long, keep the position; if you are neutral, the news is a minor catalyst—no need to initiate a new position solely on this contract. Keep an eye on the upcoming Q3 earnings release: a beat on the incremental $13 M contribution could provide a small upside catalyst, while a miss would be more significant than the contract itself.