Time To Buy The Dip In Construction Partners Stock?
Construction Partners (ROAD) stock has fallen by 18.5% in less than a month, from $138.88 on 24th Feb, 2026 to $113.24 now. Should you buy this dip?
Dip buying is a viable strategy for quality stocks that have a history of recovering from dips. As it turns out, ROAD stock passes basic quality checks. Historically, the median return for the 12-month period following sharp dips was 72% , with median peak return reaching 72%. We define sharp dip as stock going down 20% or more, in less than 30 day period.
Below, we get into details of historical dips and subsequent returns.
Historical Median Returns Post Dips
| Period | Past Median Return |
|---|---|
| 1M | 13.5% |
| 3M | 32.9% |
| 6M | 36.2% |
| 12M | 71.6% |
Historical Dip-Wise Details
ROAD had 7 events since 5/4/2018 where the dip threshold of -20% within 30 days was triggered
- 72% median peak return within 1 year of dip event
- 348 days is the median time to peak return after a dip event
- -3.6% median max drawdown within 1 year of dip event
| 30 Day Dip | ROAD Subsequent Performance | |||||||
|---|---|---|---|---|---|---|---|---|
| Date | ROAD | SPY | 1Y | Peak Return |
Max Drop |
# Days to Peak |
||
| Median | 72% | 72% | -4% | 348 | ||||
| 2242025 | -22% | 1% | 95% | 98% | -4% | 365 | ||
| 12092022 | -21% | 4% | 72% | 72% | -3% | 348 | ||
| 6162022 | -29% | -15% | 72% | 69% | -2% | 365 | ||
| 5102022 | -23% | -12% | 43% | 64% | -4% | 195 | ||
| 12172021 | -26% | -1% | -12% | 9% | -36% | 339 | ||
| 3122020 | -30% | -24% | 170% | 194% | 0% | 306 | ||
| 10232018 | -20% | -5% | 71% | 73% | -17% | 360 | ||
Construction Partners Passes Basic Financial Quality Checks
Revenue growth, profitability, cash flow, and balance sheet strength need to be evaluated to reduce the risk of a dip being the sign of a deteriorating business situation.
| Quality Metrics | Value | Quality Check |
|---|---|---|
| Revenue Growth (LTM) | 53.9% | Pass |
| Revenue Growth (3-Yr Avg) | 32.0% | Pass |
| Operating Cash Flow Margin (LTM) | 10.9% | Pass |
| Leverage (see below) | – | Pass |
| => Interest Coverage Ratio | 2.6 | |
| => Cash To Interest Expense Ratio | 1.0 |
Not sure if you can take a call on ROAD stock? Consider portfolio approach
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