Arcosa, Inc. (ACA) stock intrinsic value fair value estimate & owner earnings analysis

Arcosa supplies infrastructure-related products: construction aggregates, asphalt and specialty materials (Construction Products), utility, wind and telecom structures plus storage and steel components (Engineered Structures), and transportation products. Its earning power has stepped up after the 2024 purchases of Ameron and of Stavola's New York/New Jersey aggregates and asphalt business ($1.2 billion, October 2024). Backlog at December 31, 2025 was about $1.1 billion in Engineered Structures and $296.9 million in Construction Products, which supports near-term volumes. Earnings power. We measure earnings as operating cash flow less swings in receivables, inventory, payables and accruals, less stock compensation, less only the portion of capital spending needed to maintain existing operations. On that basis earnings per share were $1.64 to $3.70 from 2019 to 2023, $3.69 in 2024 and $5.80 in 2025. The 2025 figure is flattered because inventory and receivables built by about $118 million, which we removed as a timing effect, and it is 57% above 2024. We therefore anchor on about $3.70 a share, the median of 2023-2025, the period that includes the acquisitions, rather than the 2025 peak. Depreciation and amortization ($223 million in 2025) are non-cash and added back automatically; because part of that is acquired intangibles that wear out, we do not grow earnings faster than the demonstrated pace. Note that the 2024 cash flow could not be fully explained by the four working-capital lines tagged in the filings; we used reported operating cash flow, which is unaffected. Base case: earnings of about $3.70 growing 3% a year for five years (backlog, price increases and the full-year effect of recent purchases, below the 57% trailing jump and well below revenue growth of 12% in 2025) and 2% for the next five, then holding flat. Aggregates reserves and long-lived quarry positions are structural, so we assume earnings persist without extra growth. Value about $72 per share. Bear case: earnings slip back to about $2.20, the 2021-2023 level, when heavy capital spending and working capital consumed cash, and stay flat. The 2024 acquisitions were debt-funded and infrastructure demand depends on government spending (the IIJA funding program), and Stavola is concentrated in New Jersey. Value about $37 per share. Bull case: the 2025 level is largely sustained at about $5.00 with 3% growth for five years and 2% for five, reflecting the backlog converting and the acquired aggregates franchises operating at scale. Value about $100 per share. What would make this wrong: cash flow recorded in 2025 was weighed by higher inventories; if that build does not reverse and margins do not hold, the base earnings level is too high. The company also could not be checked against any subsequent-event or legal item that would change the level. The margin-of-safety price sits at a substantial discount to the base case because cash earnings are cyclical and volatile, and debt from acquisitions widens the downside.