Primoris Services (PRIM): Analyzing Valuation After Standout Quarter and Surging Investor Interest

If you are weighing what to do with Primoris Services (PRIM) right now, you are not alone. The company just posted an outstanding quarter, with revenues jumping 20.9% year on year and beating Wall Street’s expectations on both the top and bottom line. This performance appears to be the reason for the recent surge in investor enthusiasm and the attention gathering around the stock after the Q2 release.

To put this in perspective, Primoris has not only outpaced short-term expectations but is also continuing a streak of steady growth. The stock is up 25% over the past year and has soared nearly 60% in the last three months, signaling that momentum is firmly with shareholders for now. Management also just participated in the 12th Annual ROTH Solar & Storage Symposium, which is another sign the company is positioning itself in high-growth infrastructure markets.

With all this action in recent months and the current price reflecting impressive gains, it begs the question: is this a temporary spike, or is Primoris Services still trading at a discount with further upside ahead?

Most Popular Narrative: 5.6% Undervalued

The prevailing view among analysts is that Primoris Services is currently trading below its estimated fair value, with a modest upside potential. The narrative suggests this valuation is primarily rooted in projections around earnings growth, revenue trends, and profit margins.

"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."

Curious how analysts arrive at this margin of safety for Primoris? The narrative’s valuation leans on ambitious profit expansion and a sector-defining multiple. Astonishing growth assumptions, shifting market dynamics, and a very specific profitability target all play a role. Do you want to uncover the exact numbers and strategic bets behind this fair value estimate?

Result: Fair Value of $124.67 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressures or failure to secure major data center or utility contracts could quickly undermine the company’s current growth momentum.

Find out about the key risks to this Primoris Services narrative.

Another View: What Does the SWS DCF Model Say?

While multiples show Primoris trading below industry averages, our DCF model presents a less optimistic view. It suggests shares might actually be overvalued. Could one approach be missing part of the bigger story?

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 Primoris Services 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 Primoris Services Narrative

If our analyses have not convinced you, or if you enjoy drawing your own conclusions from the numbers, you can build your own thesis in just a few minutes. Do it your way

A great starting point for your Primoris Services research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

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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.

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