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  "documentTitle": "Construction Partners, Inc. (ROAD)",
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  "authorName": "Spruce Point Capital Management",
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  "sourceTypeLabel": "Short seller",
  "presentationDate": "2025-01-23 00:00:00",
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  "notes": "The slide uses a combination of qualitative expert testimony and quantitative historical valuation charts to support a short thesis.",
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      "kind": "callout",
      "text": "ROAD is trading close to a 5-year high multiple despite our evidence suggesting its move into Texas (and Oklahoma) may be a result of waning demand for its services in Florida with its largest customer.",
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      "text": "EV / NTM Sales Multiple",
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      "text": "EV/NTM Sales Multiple: 2.21",
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      "kind": "quote",
      "text": "If you look at the multiple that Construction Partners is trading at, it makes no sense to me... I think it is significantly overvalued...",
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      "text": "\"If you look at the multiple that Construction Partners is trading at, it makes no sense to me. I think Construction Partners is an ok company but nowhere near as good as CRH, I don't think their management team is as good as CRH is, their assets aren't as good, their geographical footprint isn't as good. I think the Street likes it because they operate in fairly high growth, warm weather climates. I personally wouldn't buy the stock. I think it is significantly overvalued and I think this Lone Star acquisition could prove quite challenging for them, and they don't have much in aggs [aggregates] so are relying on others.\" — Spruce Point Interview, Industry Executive",
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      "text": "1) Multiple is understated as a result of an incomplete pro forma for LSP, but directionally the multiple expansion is accurate. Source: Bloomberg, Spruce Point research interview",
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      "kind": "title",
      "text": "ROAD's Valuation Multiple Expansion Is Difficult To Reconcile With Challenges Ahead",
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