Surging Data Center Contract Pipeline Could Be a Game Changer for Primoris Services (PRIM)

• Primoris Services Corporation has recently reported strong demand across power delivery, gas operations, and communication projects in its Utilities segment, with approximately US$1.7 billion in potential data center-related contracts being evaluated for award by the end of 2025.
• Recent operational measures have led to expanded gross margins and higher adjusted earnings per share for the first half of 2025, reinforcing the company’s momentum and revenue visibility in key markets.
• We'll examine how this accelerating pipeline of data center contracts could further strengthen Primoris Services' investment narrative and growth prospects.

Find companies with promising cash flow potential yet trading below their fair value.

Primoris Services Investment Narrative Recap

The Primoris Services story hinges on benefiting from multi-year trends in power delivery and data center infrastructure, as well as maintaining margin improvements despite competitive pressures. The latest news of US$1.7 billion in potential data center contracts provides a material near-term catalyst, expanding visibility but also raising exposure to execution and client spending cycles, while the primary short-term risk remains the volatility tied to major project awards in highly competitive markets.

Among recent developments, the raised earnings guidance for FY 2025 stands out. This increase followed stronger gross margins and higher segment earnings, directly reflecting the company’s improved operational execution and the strength of the Utilities pipeline, both closely related to this latest focus on large-scale data center projects.

However, even as revenue visibility increases, investors should also keep an eye out for the risks associated with project award timing in competitive sectors...

Read the full narrative on Primoris Services (it's free!)

Primoris Services is projected to reach $8.7 billion in revenue and $350.7 million in earnings by 2028. This scenario assumes a 7.8% annual revenue growth rate and a $109.7 million increase in earnings from the current $241.0 million.

Uncover how Primoris Services' forecasts yield a $125.00 fair value, a 9% upside to its current price.

Exploring Other Perspectives

Simply Wall St Community contributors offered three distinct fair value estimates for Primoris, ranging from US$77.76 to US$125. Amid these opinions, keep in mind that recent demand for large-scale projects could boost revenue growth but still exposes the business to award timing risk. Explore several viewpoints to understand how market participants assess such catalysts and risks.

Explore 3 other fair value estimates on Primoris Services - why the stock might be worth 32% less than the current price!

Build Your Own Primoris Services Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Primoris Services research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Primoris Services' overall financial health at a glance.

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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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