ORN

We rate Orion Group Holdings Inc (ORN) as a Hold with a composite score of 55.0/100 at a current price of $13.86. The stock presents a mixed quantitative picture — neither compelling enough to warrant new accumulation nor weak enough to justify selling for existing holders. Our factors are split, and the overall profile suggests patience is warranted.

The rating is primarily driven by strength in momentum (86th percentile) and value (49th percentile), which together account for the majority of the composite score. Offsetting weakness in stability (28th percentile) and investment (34th percentile) tempers our overall conviction. We assign a Narrow Moat rating (51/100), Medium uncertainty, and Standard capital allocation.

Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.

Orion Group Holdings Inc holds a lower-quartile position (#41 of 50) within the Construction sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 55.0/100 places it at rank #1262 in our full 7,333-stock universe. At $331M in market capitalization, Orion Group Holdings Inc is a small-cap player in the Construction space, which limits certain scale advantages but may allow for more agile strategic execution.

The near-term outlook is constructive, with revenue growing at 17% and momentum in the 86th percentile confirming positive market sentiment and institutional accumulation. The combination of strong top-line growth and favorable price dynamics suggests the company is executing well on its growth strategy. Investment factor at the 34th percentile indicates reinvestment patterns that investors should monitor for sustainability.

The margin cascade tells an important story: gross margins of 12% (-11.2pp vs sector) narrow to operating margins of 2% (-5.4pp vs sector) and net margins of 0.8%, yielding a gross-to-net conversion rate of 6%. The significant margin erosion from gross to net suggests elevated operating expenses, high interest costs, or other structural drags that warrant monitoring.

At a current price of $13.86, Orion Group Holdings Inc is trading near fair value based on current fundamentals. Our value factor score of 49/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.

The stock currently trades at a P/E of 79.7x (a 317% premium to the sector median of 19.1x), EV/EBITDA of 22.5x (at a premium), P/B of 3.5x, P/S of 0.7x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.

We assign a Medium uncertainty rating to Orion Group Holdings Inc. The stock presents a balanced risk profile: below-average price stability (28th percentile) and elevated valuation multiple (P/E 79.7x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.

Specific risk factors that inform our assessment include: below-average price stability (28th percentile); elevated valuation multiple (P/E 79.7x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 28th percentile and quality factor at the 44th percentile provide a quantitative summary of the overall risk landscape.

Key risk mitigants include: conservative leverage (19% D/E) limits balance sheet risk. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.

We rate Orion Group Holdings Inc's capital allocation as Standard. Management has shown adequate — though not exceptional — stewardship of shareholder capital. Returns on equity stand at 4.4%, and the balance sheet is managed within acceptable parameters (D/E: 19%). Exemplary allocators typically sustain ROE above 20% and D/E below 50%; Orion Group Holdings Inc falls short on at least one dimension.

There is room for improvement in optimizing the capital structure or enhancing shareholder returns. Absent a dividend, the overall capital allocation framework would benefit from either higher reinvestment returns, improved balance sheet efficiency, or increased shareholder distributions. We will monitor for signs of strategic improvement that could warrant an upgrade.

In summary, Orion Group Holdings Inc receives a Hold rating with a composite score of 55.0/100 (rank #1262 of 7,333). Our quantitative framework assigns a Narrow Moat (51/100, trend: stable), Medium uncertainty, and Standard capital allocation. The average factor score across quality, value, momentum, stability, and investment is 48/100.

Our analysis supports a neutral stance on Orion Group Holdings Inc. While the quantitative profile is not weak enough to warrant selling, it lacks the multi-factor strength required for a buy recommendation. Existing holders should maintain positions and monitor for catalysts — either fundamental improvement or valuation compression — that would shift the risk-reward balance.