Primoris Services Corporation (NYSE:PRIM) Just Reported And Analysts Have Been Lifting Their Price Targets

Last week saw the newest full-year earnings release from Primoris Services Corporation (NYSE:PRIM), an important milestone in the company's journey to build a stronger business. Primoris Services reported in line with analyst predictions, delivering revenues of US$5.7b and statutory earnings per share of US$2.33, suggesting the business is executing well and in line with its plan. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. We've gathered the most recent statutory forecasts to see whether the analysts have changed their earnings models, following these results.

See our latest analysis for Primoris Services

After the latest results, the five analysts covering Primoris Services are now predicting revenues of US$6.08b in 2024. If met, this would reflect a modest 6.4% improvement in revenue compared to the last 12 months. Per-share earnings are expected to grow 14% to US$2.70. Before this earnings report, the analysts had been forecasting revenues of US$6.20b and earnings per share (EPS) of US$2.83 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a minor downgrade to their earnings per share forecasts.

Despite cutting their earnings forecasts,the analysts have lifted their price target 13% to US$43.80, suggesting that these impacts are not expected to weigh on the stock's value in the long term. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Primoris Services analyst has a price target of US$47.00 per share, while the most pessimistic values it at US$38.00. Still, with such a tight range of estimates, it suggeststhe analysts have a pretty good idea of what they think the company is worth.

Another way we can view these estimates is in the context of the bigger picture, such as how the forecasts stack up against past performance, and whether forecasts are more or less bullish relative to other companies in the industry. It's pretty clear that there is an expectation that Primoris Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this to the 53 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.7% per year. So it's pretty clear that, while Primoris Services' revenue growth is expected to slow, it's expected to grow roughly in line with the industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Primoris Services. They also reconfirmed their revenue estimates, with the company predicted to grow at about the same rate as the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Primoris Services analysts - going out to 2026, and you can see them free on our platform here.

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Primoris Services , and understanding these should be part of your investment process.

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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.