Should Investors Rethink Primoris Services After Shares Climb Over 130% in Past Year?

If you have been eyeing Primoris Services stock lately and wondering whether it is time to jump in, you are not alone. This is a stock that has made some big moves in both the short and long term, catching the attention of newcomers and seasoned investors alike. Just in the last week, shares have climbed 3.6%. Zoom out a bit, and the momentum becomes even more impressive: up 13.7% over the past month, a staggering 73.5% since the start of the year, and an eye-popping 130.7% over the last twelve months. Long-term holders have enjoyed a 735.9% gain over three years and an incredible 665.8% surge across the last five years.

These numbers speak to the market’s growing confidence in Primoris Services, likely driven by a mix of broad sector upswings and a perception that the company is well-positioned for growth. Still, with rapid price appreciation comes the natural question: is the stock still undervalued, or are we now paying a premium?

To help answer that, Primoris Services currently checks in with a value score of 2 out of 6, meaning it is considered undervalued in two valuation measures. But as every savvy investor knows, a simple score only tells part of the story. Next, we will break down what goes into that valuation rating and look at some key methods analysts use. By the end, you will learn a smarter, more holistic way to view valuation than any single metric can provide.

Primoris Services scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Primoris Services Discounted Cash Flow (DCF) Analysis

The Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by projecting its future cash flows and then discounting those cash flows back to today’s dollars. This helps investors gauge what the business is truly worth based on its expected earning power.

Primoris Services produced $539.1 million in Free Cash Flow (FCF) over the last twelve months. Analysts have projected annual FCF for the next several years, starting with $287.9 million in 2026 and reaching an extrapolated $388.5 million by 2035. Notably, projections beyond five years are derived by Simply Wall St based on assumed trends rather than direct analyst estimates, so there is more uncertainty the further out the estimate goes.

All cash flows are reported in US dollars. Using the 2 Stage Free Cash Flow to Equity model, the fair value of Primoris Services shares is estimated at $103.62. Relative to the current trading price, this indicates the stock is about 28.8% above its intrinsic value, suggesting it is overvalued according to this method.

Result: OVERVALUED

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Primoris Services.

Our Discounted Cash Flow (DCF) analysis suggests Primoris Services may be overvalued by 28.8%. Find undervalued stocks or create your own screener to find better value opportunities.

Approach 2: Primoris Services Price vs Earnings

The Price-to-Earnings (PE) ratio is a popular valuation tool for profitable companies like Primoris Services. It measures how much investors are willing to pay today for each dollar of current earnings. For businesses generating consistent profits, the PE ratio offers a snapshot of market expectations around growth, risk, and the company’s potential to generate future earnings.

While a higher PE can sometimes signal optimism about a company’s growth prospects, it can also reflect elevated risks or premium pricing. Comparing Primoris Services' current PE multiple of 29.91x with the Construction industry average of 34.50x and a peer group averaging 39.84x, the company's valuation appears more conservative. However, relying solely on these comparisons can overlook other factors that affect what a “fair” multiple should be, such as unique growth rates, profitability, market size, and risk profile.

This is where Simply Wall St’s Fair Ratio metric steps in. Unlike a raw industry comparison, the Fair Ratio calculates the multiple Primoris Services should trade at after accounting for its specific outlook, historic performance, profit margins, and overall risk profile. For Primoris, the Fair Ratio is estimated at 29.12x, aligning almost exactly with its actual PE.

With the PE ratio of 29.91x nearly matching the Fair Ratio of 29.12x, the analysis suggests Primoris Services is priced about right relative to what it fundamentally deserves in today’s market.

Result: ABOUT RIGHT

PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover companies where insiders are betting big on explosive growth.

Upgrade Your Decision Making: Choose your Primoris Services Narrative

Earlier we mentioned that there is an even better way to understand valuation, so let's introduce you to Narratives. A Narrative is a way to create your own story about a company. In other words, you link your personal view on its future (like revenue growth, earnings, and margins) to a forecast and a fair value, which helps clarify your specific investment outlook.

Narratives make it easy to go beyond the numbers and see how your assumptions and expectations stack up against reality. Available right now on the Simply Wall St platform’s Community page, Narratives are used by millions of investors to keep their investment thinking clear and focused.

You can use a Narrative to decide if it is worth buying, holding, or selling shares at the current price by comparing your own calculated fair value to the market price. As new news or earnings updates come in, Narratives automatically refresh so you are always up to date.

For Primoris Services, some investors may craft a bullish Narrative based on strong growth in renewables and expect a fair value of $135.00 per share, while others may focus on risks and set a fair value closer to $110.00, showing how every investor’s story can lead to a different investment decision.

Do you think there's more to the story for Primoris Services? Create your own Narrative to let the Community know!

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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