Last Update 05 Dec 25

Fair value Increased 0.33%

PWR: Expanding Power Generation And Grid Projects Will Support Balanced Long-Term Outlook

Analysts have nudged their fair value estimate for Quanta Services slightly higher to approximately $474, citing a series of price target increases toward the mid to high $400s and up to about $550. They point to strong Q3 execution, expanding power generation and energy infrastructure opportunities, and robust transmission and distribution demand as reinforcing confidence in its long term growth profile.

Analyst Commentary

Recent Street research is broadly constructive on Quanta Services, with a series of price target increases clustering in the mid to high 400s and extending as high as the mid 500s. Analysts point to strong Q3 execution, expanding market opportunities, and improving visibility into multi year infrastructure spending as key drivers behind their more optimistic outlooks.

At the same time, valuation and guidance dynamics are prompting some to maintain a more balanced stance, even as they acknowledge the company’s strong operating momentum and strategic positioning in energy transition related spending.

Bullish Takeaways

Bullish analysts highlight Q3 as a clean beat and raise quarter, with adjusted EBITDA growth in the mid 20 percent range and strength across Electric and Underground Utility segments. This reinforces confidence in sustained double digit earnings growth.
The formal push into the new power generation market through a Total Solutions Power Generation Platform is viewed as a structural growth accelerator, broadening the company’s addressable market in generation, storage, and holistic power solutions.
Survey and field work indicate accelerating activity and better than expected bidding and awards in transmission and distribution. This supports the view that Quanta remains a prime beneficiary of a multi decade grid and infrastructure build out.
A robust book to bill around the mid 1x range and an expanding pipeline in data centers, renewables, and pipelines underpin rising price targets toward and above $500, as analysts gain conviction that current valuation does not fully capture long term cash flow visibility.

Bearish Takeaways

More cautious analysts, including those at JPMorgan, acknowledge strong Q3 results but retain a Neutral stance. They suggest that much of the near term execution strength may already be reflected in the share price.
The mixed implied Q4 guide, with revenues up slightly more than the beat but full year EBITDA essentially unchanged, raises questions about the pace of incremental margin expansion from here.
Some see risk that a still elevated valuation could be sensitive to any slowdown in the broader clean energy or infrastructure spending cycle, particularly if residential or more cyclical end markets underperform.
There is ongoing focus on execution discipline in pipeline and communications businesses, with cautious analysts watching for signs that growth investments in newer platforms and diversified end markets translate consistently into higher returns on capital.

What's in the News

Truist raised its Quanta Services price target to $548 from $521 and reiterated a Buy rating after a Q3 earnings beat that featured 25.7% adjusted EBITDA growth and strong performance in Electric and Underground Utility segments, highlighting the new Total Solutions Power Generation Platform as a key growth driver (Truist research note).
Quanta expanded its total solutions platform to offer fully integrated power generation, storage, and infrastructure solutions, leveraging EPC expertise and self-perform capabilities to address surging electricity demand from data centers, industrial customers, electrification, and grid expansion, with NiSource engaging Quanta to develop approximately 3 gigawatts of generation capacity for a large load customer (company client announcement).
American Electric Power entered long term strategic agreements with Quanta to support AEP's $72 billion capital plan, including cooperation on 765 kV and other high voltage transmission projects and a development services agreement to expand U.S. manufacturing of extra high voltage transformers and circuit breakers, aimed at improving cost predictability and supply chain resilience (strategic alliance announcement).
Quanta announced a 10 percent increase in its quarterly cash dividend to $0.11 per share, or $0.44 annually, payable January 12, 2026 to shareholders of record as of January 2, 2026, reflecting confidence in its cash flow and long term outlook (dividend announcement).
Management signaled ongoing interest in strategic, culture aligned acquisitions focused on filling capability gaps and strengthening the vertical supply chain, emphasizing that potential deals will prioritize strategic fit and client centricity ahead of financial considerations (Q3 2025 earnings call).

Valuation Changes

The fair value estimate has risen slightly, moving from approximately $473 to about $474, reflecting modestly higher long term cash flow expectations.
The discount rate has increased slightly from roughly 8.64% to about 8.67%, implying a marginally higher required return and modestly tempering valuation support.
Revenue growth has edged down fractionally from around 12.64% to about 12.64%, effectively unchanged and signaling stable top line growth assumptions.
Net profit margin has improved very slightly from roughly 4.90% to about 4.90%, indicating a marginal uptick in expected profitability levels.
The future P/E has increased modestly from about 48.10x to approximately 48.30x, suggesting a small expansion in the multiple applied to forward earnings.

Robust demand for grid modernization, renewables, and data center power drives long-term growth, with expanding project pipelines and high-value contracts improving earnings stability.
Strategic acquisitions, service diversification, and execution expertise enhance Quanta's competitive edge, enabling margin expansion and resilience amid industry complexity and labor shortages.
Aggressive acquisitions, reliance on major industry trends, project complexity, labor pressures, and backlog uncertainty expose the company to execution, regulatory, and earnings risks.

Catalysts

About Quanta Services

Offers infrastructure solutions for the electric and gas utility, renewable energy, communications, pipeline, and energy industries in the United States, Canada, Australia, and internationally.What are the underlying business or industry changes driving this perspective?

The accelerating demand for transmission and distribution infrastructure-driven by rising electric loads from AI/data center proliferation, grid modernization needs, and the broader energy transition-positions Quanta to benefit from a major, long-term investment cycle in power grid expansion and resilience; this is likely to support sustained revenue and backlog growth in future years.
Multi-year, large-scale utility and renewable project pipelines continue to expand due to both increasing policy tailwinds (e.g., IRA, infrastructure bills) and heightened power demand, extending project visibility and enabling Quanta to lock in longer-term, higher-value contracts-improving future earnings predictability and quality.
Ongoing expansion into renewables EPC services, as well as strategic investments and acquisitions like Dynamic Systems and Bell Lumber & Pole, are broadening Quanta's service offering, creating cross-selling opportunities, and increasing exposure to high-growth markets-expected to drive above-average top-line growth and synergistic margin improvement.
Persistent labor shortages and the complexity of self-perform, integrated infrastructure solutions give Quanta a competitive advantage in execution certainty and scope, supporting positive pricing power and net margin expansion as the company becomes a partner-of-choice for utilities and technology customers.
The company's consistent ability to convert record backlogs, manage capital allocation through disciplined M&A, and adapt workforce allocation across project types minimizes risk from short-term sector volatility; this portfolio approach, alongside strong balance sheet management, positions Quanta for continued double-digit EPS growth and greater free cash flow accretion over the long term.

Quanta Services Earnings and Revenue Growth

Quanta Services Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming Quanta Services's revenue will grow by 12.9% annually over the next 3 years.
Analysts assume that profit margins will increase from 3.7% today to 4.6% in 3 years time.
Analysts expect earnings to reach $1.7 billion (and earnings per share of $11.56) by about September 2028, up from $971.8 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 47.6x on those 2028 earnings, down from 57.3x today. This future PE is greater than the current PE for the US Construction industry at 34.7x.
Analysts expect the number of shares outstanding to grow by 0.94% per year for the next 3 years.
To value all of this in today's terms, we will use a discount rate of 8.3%, as per the Simply Wall St company report.

Quanta Services Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company's aggressive acquisition strategy, including the recent purchase of Dynamic Systems, increases integration and execution risks; potential overpayment or difficulties in realizing expected synergies could compress net margins and increase leverage, threatening earnings growth.
The reliance on major secular trends such as utility transmission build-out, renewable energy growth, and AI/data center-driven power demand exposes Quanta to cyclicality if these trends moderate or capital expenditures by utilities/data companies slow, potentially leading to a weaker backlog and reduced revenue visibility.
The increasing complexity, size, and political sensitivity of transmission and infrastructure projects (e.g., delays to projects like Grain Belt Express facing political or regulatory obstacles) introduce risks of project cancellations, regulatory hurdles, or permitting delays, which could lead to missed revenue and negative earnings surprises.
Tight labor markets and rising wage inflation in skilled construction/trades, which Quanta heavily relies upon for self-perform capabilities, could increase operating costs and erode profit margins, especially if project pricing fails to keep pace with labor cost inflation.
Heavy reliance on a robust, multi-year backlog may obscure risks related to project timing (such as timing mismatches in MSA renewals or project start/stop dynamics), regulatory changes in renewable energy incentives (e.g., winding down of the ITC/PTC), or changes in customer procurement strategies, potentially resulting in revenue lumpiness and earnings volatility.

Valuation

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

The analysts have a consensus price target of $419.4 for Quanta 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 $490.0, and the most bearish reporting a price target of just $248.0.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be $37.5 billion, earnings will come to $1.7 billion, and it would be trading on a PE ratio of 47.6x, assuming you use a discount rate of 8.3%.
Given the current share price of $373.47, the analyst price target of $419.4 is 11.0% 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.

Have other thoughts on Quanta Services?

Create your own narrative on this stock, and estimate its Fair Value using our Valuator tool.

Create Narrative

How well do narratives help inform your perspective?

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.

Analysts Lift Price Target for Quanta Services Amid Upbeat Outlook and Valuation Adjustments