Centuri Holdings (CTRI): Valuation Insights Following U.S. Gas Division Leadership Change

Centuri Holdings recently named Ryan Palazzo as President of its U.S. Gas segment, a division that represents about half of the company’s revenue. Palazzo’s strong background in pipeline and energy infrastructure could shape Centuri’s next phase of growth.

See our latest analysis for Centuri Holdings.

Centuri’s latest leadership move comes after a year of solid momentum, with its latest share price at $20.53 and a 6.87% year-to-date share price return. While the 1-year total shareholder return of 11.27% highlights growing investor confidence, near-term price movements have been mixed. This suggests the market is closely watching how new leadership could shape future prospects and mitigate recent volatility.

If you’re exploring companies where leadership shifts signal new growth stories, now’s the perfect time to discover fast growing stocks with high insider ownership.

With shares trading below analyst price targets, but recent gains already lifting returns, the question is whether Centuri offers real value at these levels or if the market has already priced in its next stage of growth.

Price-to-Sales Ratio of 0.7x: Is it justified?

Centuri Holdings is currently valued at a price-to-sales ratio of 0.7x, which puts its last close price in a more attractive light compared to both its peers and the broader industry average.

The price-to-sales (P/S) ratio measures how much investors are willing to pay for each dollar of the company’s sales. For construction and capital goods businesses like Centuri, this ratio helps frame whether the market expects strong future top-line growth or is discounting current risks.

Compared to its immediate peer group average of 1.2x and the US Construction industry’s 1.4x benchmark, Centuri’s P/S of 0.7x appears outright cheap. This suggests investors might be underpricing its revenue stream. However, the company’s current unprofitability and recent growth trajectory could be holding the multiple back. The market also values Centuri exactly in line with SWS’s estimate of fair value for its P/S ratio at 0.7x, which implies little room for a rerate unless business performance surprises. This fair ratio represents a level that the stock could migrate toward if company fundamentals strengthen or sentiment shifts.

Explore the SWS fair ratio for Centuri Holdings

Result: Preferred multiple of price-to-sales ratio: 0.7x (ABOUT RIGHT)

However, Centuri’s unprofitability and slower revenue growth may dampen optimism if they persist. This could put pressure on valuations despite attractive metrics.

Find out about the key risks to this Centuri Holdings narrative.

Another View: What Does the SWS DCF Model Say?

While the price-to-sales ratio positions Centuri as attractively valued against peers, our DCF model tells a more cautious story. At $20.53, the shares sit above the model’s estimate of fair value at $18.17. This suggests the stock may be a bit overvalued by this approach. Does the market see something the model does not, or is optimism running ahead of fundamentals?

Look into how the SWS DCF model arrives at its fair value.

Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Centuri Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.

Build Your Own Centuri Holdings Narrative

If you want to dig into the data yourself or bring your own perspective, the tools to build a custom view are quick and straightforward. Do it your way.

A good starting point is our analysis highlighting 1 key reward investors are optimistic about regarding Centuri Holdings.

Looking for More Investment Ideas?

Take charge of your next investment move with these hand-picked opportunities from Simply Wall Street’s powerful Screener. Don’t let the market’s next winners pass you by.

• Boost your portfolio’s yield by tapping into these 17 dividend stocks with yields > 3%, where robust companies are rewarding shareholders with dividends above 3%.
• Ride the AI wave early by checking out these 24 AI penny stocks, which are gaining momentum at the cutting edge of machine learning and automation.
• Capitalize on breakthrough technology advancements with these 26 quantum computing stocks, uncovering firms at the forefront of quantum computing innovation.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com