Last Update 01 Dec 25

Fair value Decreased 2.79%

PRIM: Future Gains Will Be Driven By Data Center And Power Delivery Momentum

Analysts have slightly decreased their fair value estimate for Primoris Services from $153.36 to $149.08 per share, citing ongoing volatility in energy bookings and a more balanced near-term outlook for growth and margins.

Analyst Commentary

Recent Street research presents a split view on Primoris Services, reflecting both enthusiasm for growth drivers and caution regarding short-term volatility and competitive risks. Below is a summary of the main bullish and bearish analyst perspectives shaping the outlook and fair value estimate.

Bullish Takeaways

Bullish analysts have raised price targets, citing strong recent revenue driven by acceleration in renewables work and anticipated sales growth aligned with major industry megatrends.
Improving margins in the utilities segment, exposure to U.S.-based manufacturing, and diversified end markets are seen as enhancing long-term cash flow visibility and providing multiple avenues for continued growth.
Opportunities in data center construction and robust pipeline and gas-fired generation projects are highlighted as key drivers that could support sustained margin expansion and upward valuation revisions.
The company's management is credited with effective execution, supported by durability in trends across the power delivery, renewables, and natural gas generation businesses, as well as openness to further merger and acquisition activity.

Bearish Takeaways

Bearish analysts point to recent volatility in energy bookings and a slower pace of new contract wins as factors that could constrain near-term valuation and momentum.
Concerns exist that some recent revenue was driven by short-term pull-forwards, which may not be sustained, particularly given soft Energy backlog-to-bill (BTB) metrics.
Shares have made significant gains year to date, raising the risk of a re-rating and leading to a more cautious or “Neutral” stance among some analysts, especially in light of a potentially less impactful upcoming earnings report.
The absence of certain catalysts, such as weather events affecting power infrastructure, could reduce growth opportunities in the near term and pressure future margin improvement.

What's in the News

Primoris Services Corporation raised its earnings guidance for the year ending December 31, 2025. Net income is now expected to be between $260.5 million and $271.5 million, or $4.75 and $4.95 per fully diluted share (Key Developments).
On October 6, 2025, the Board of Directors appointed Koti Vadlamudi as President and Chief Executive Officer, effective November 10, 2025. He succeeds David King, who will continue as Chairman of the Board (Key Developments).

Valuation Changes

Fair Value Estimate: Decreased from $153.36 to $149.08 per share, reflecting a modest downward revision.
Discount Rate: Increased slightly from 8.79% to 8.82%, indicating a marginally higher risk premium in the updated outlook.
Revenue Growth: Adjusted from 6.99% to 6.95% annually, showing a minor reduction in projected top-line expansion.
Net Profit Margin: Remained nearly unchanged at 4.02%, signifying an essentially stable profitability outlook.
Future P/E Ratio: Declined from 29.58x to 28.25x, suggesting a somewhat less aggressive valuation on forward earnings.

Growth in renewables, utilities, and data center services is strengthening revenue streams, margins, and long-term earnings stability.
Strong operational execution and favorable legislative tailwinds are enhancing profitability, cash flow, and future project opportunities.
Heavy reliance on highly competitive sectors, margin pressures, and exposure to cyclical demand create risks for stable growth and earnings consistency.

Catalysts

About Primoris Services

Provides infrastructure services primarily in the United States and Canada.What are the underlying business or industry changes driving this perspective?

The accelerating build-out of renewable energy and battery storage infrastructure across North America continues to drive record renewables revenue and backlog for Primoris, positioning the company to benefit from multi-year secular demand tailwinds-supporting sustained revenue growth and long-term earnings visibility.
Expanding power delivery and grid modernization activity, underpinned by population growth in the Sun Belt and ongoing utility infrastructure upgrades, are fueling robust bookings and margin expansion in the Utilities segment-translating to higher net margins and more resilient cash flows.
Surging demand from data center development, including $1.7 billion of potential contracts being pursued, is creating incremental, higher-margin project opportunities across site prep, power generation, utility, and fiber network services, which is likely to lift future revenues and segment profitability.
Operational execution, improved productivity, and a favorable project mix in core segments (especially Utilities) are driving company-wide gross margin improvement and improved cash conversion, structurally enhancing Primoris's earnings and free cash flow profile.
Legislative clarity on tax incentives for renewables and improved order momentum in both gas generation and large-diameter pipeline work point to additional upside in backlog and future bookings, supporting above-trend top-line growth and EBITDA expansion in coming years.

Primoris Services Earnings and Revenue Growth

Primoris Services Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Primoris Services's revenue will grow by 7.7% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.5% today to 4.1% in 3 years time.
Analysts expect earnings to reach $358.2 million (and earnings per share of $6.2) by about September 2028, up from $241.0 million today. The analysts are largely in agreement about this estimate.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 24.0x on those 2028 earnings, down from 25.3x today. This future PE is lower than the current PE for the US Construction industry at 34.7x.
Analysts expect the number of shares outstanding to grow by 0.56% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.53%, as per the Simply Wall St company report.

Primoris Services Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company's future growth is increasingly reliant on data center-related work and utility-scale renewable projects, which are highly competitive industries; a failure to secure sufficient awards or maintain a differentiated offering could slow revenue growth and compress earnings.
Margins in the Renewables (Energy) segment have shown signs of pressure from factors like unfavorable weather and are not expected to structurally improve further; persistent margin headwinds or execution challenges could limit future net margin expansion.
The pipeline business, while expected to improve, has experienced revenue declines and remains subject to volatile demand cycles and the risk of longer-term declines as decarbonization policies shift investment away from fossil fuel infrastructure, potentially impacting revenue and backlog.
Dependence on Master Service Agreements (MSAs) in the Utilities segment and the cyclical timing of customer spending may expose the company to short-term project delays or spending pullbacks, causing revenue volatility and potentially uneven earnings.
While debt levels are currently manageable, any increase associated with future M&A or organic growth investments could heighten financial risk, especially if interest rates rise or if acquired assets underperform, leading to higher interest expense and risk to earnings stability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of $124.667 for Primoris Services based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of $135.0, and the most bearish reporting a price target of just $110.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $8.7 billion, earnings will come to $358.2 million, and it would be trading on a PE ratio of 24.0x, assuming you use a discount rate of 8.5%.
Given the current share price of $113.05, the analyst price target of $124.67 is 9.3% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

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Disclaimer

AnalystConsensusTarget is a tool utilizing a Large Language Model (LLM) that ingests data on consensus price targets, forecasted revenue and earnings figures, as well as the transcripts of earnings calls to produce qualitative analysis. The narratives produced by AnalystConsensusTarget are general in nature and are based solely on analyst data and publicly-available material published by the respective companies. These scenarios are not indicative of the company's future performance and are exploratory in nature. Simply Wall St has no position in the company(s) mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The price targets and estimates used are consensus data, and do not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that AnalystConsensusTarget's analysis may not factor in the latest price-sensitive company announcements or qualitative material.

PRIM: Utility and Renewables Demand Will Support Measured Upside Amid CEO Transition