Cardinal Infrastructure Group (CDNL -25.72%) stock is getting crushed in Tuesday's trading. Shares were down 25.7% as of 11:30 a.m. ET despite relatively little movement for the broader market.

Cardinal published its second-quarter report before the market opened this morning, publishing mixed results that have sent its valuation tumbling. While the company is getting hit with a dramatic valuation pullback, shares are still up roughly 78% year to date.

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Cardinal stock sinks following big earnings miss

With the Q2 report it published this morning, Cardinal delivered a significant revenue beat alongside a large earnings miss that is receiving far more investor focus. The company posted a profit of $0.26 per share on sales of $226.9 million, while the average analyst estimate had targeted earnings of $0.47 per share on sales of roughly $274.7 million.

Sales were up roughly 114% year over year, and the company raised its full-year guidance, but the increase for its backlog in Q2 came in at a more modest 35%. For reference, the company's backlog grew 60% year over year in Q1.

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NASDAQ: CDNL

Cardinal Infrastructure Group

Today's Change

(-25.72%) $-15.43

Current Price

$44.57

Key Data Points

Market Cap

$1.2BMarket cap calculated using publicly traded shares outstanding only. Does not include unlisted, private, or dual-class non-traded shares. Implied market cap may vary.

Day's Range

$42.50 - $53.51

52wk Range

$21.00 - $96.40

Volume

1.8M

Avg Vol

667.2K

What's next for Cardinal?

Cardinal has raised its full-year sales guidance to between $880 million and $900 million -- far above the average analyst estimate for sales of roughly $717.7 million prior to the company's Q2 report. On the other hand, management lowered its non-GAAP (adjusted) earnings before interest, taxes, depreciation, and amortization (EBITDA) margin guidance to between 16% and 18% -- down from previous guidance for a margin greater than 20%.

While the company delivered a substantial sales beat, margins were far softer than anticipated in the quarter -- and investors are selling out of the stock in response to concerns about the quality of the business's revenue. With margins contracting and growth for the company's backlog seeing a substantial deceleration, the infrastructure services specialist's growth outlook may be weakening even though its headline revenue numbers look impressive.