Shares of Acrow Ltd (ASX: ACF) are staging a strong turnaround on Wednesday afternoon after the company released a market update.
Earlier in the day, the stock had been trading in the red, down 0.60% to 82.5 cents.
But sentiment shifted quickly after the release, sending the shares 6.63% higher to 88.5 cents.
The sudden reversal suggests investors saw enough in the update to feel more confident about the company’s growth over the next year.
Here’s what appears to be driving the move.
Momentum builds after a strong March
According to today’s announcement, Acrow secured $14.3 million in new hire contracts during March, making it the strongest month in the company’s history.
That pushed its hire revenue pipeline to a record $256 million, up 34% on the prior comparable period.
Management said conditions have improved across Australia. Queensland has been a standout, with March revenue reaching its highest level in more than 12 months.
That strength has given the board confidence to reaffirm its FY26 guidance and provide initial FY27 guidance.
The company continues to expect FY26 revenue of $315 million to $325 million, with EBITDA of $80 million to $84 million.
Looking ahead, Acrow expects FY27 revenue between $335 million and $350 million, and EBITDA in the range of $88 million to $98 million.
Using the midpoint, that implies roughly 7% revenue growth and 13% EBITDA growth year over year.
Management commentary
Chief Executive Officer Steven Boland said the company’s multi-year diversification strategy is helping build a more resilient earnings base.
Boland said Acrow had spent the past three years broadening its revenue streams to better handle ups and downs in the broader construction industry.
He noted that the strategy has positioned the company to take advantage of the next uplift in the construction cycle, particularly across civil infrastructure markets in Queensland.
Those comments are likely to have supported today’s move higher, with investors focusing on both current trading momentum and clearer growth prospects into FY27.
Foolish Takeaway
Today’s gain came after investors received a clearer growth outlook for both FY26 and FY27.
After trading lower earlier in the afternoon, the stock reversed course as the company pointed to record contract momentum and a stronger forward pipeline.
With early FY27 guidance now in place, the focus shifts to whether Acrow can keep turning infrastructure demand into higher revenue and profits.
That could leave the stock better placed if infrastructure demand continues to improve across key East Coast markets.
The post From red to green: Why this under-the-radar ASX stock is ripping higher this afternoon appeared first on The Motley Fool Australia.
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Motley Fool contributor Aaron Teboneras has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.