Primoris Services (PRIM) AI Stock Analysis

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Primoris Services

(NYSE:PRIM)

75Outperform

Primoris Services is performing well financially with strong growth prospects, particularly in utilities and renewables. While technical indicators show mixed signals, the stock remains fundamentally sound. Debt management and regulatory impacts in the energy segment are potential risks. Overall, the company's strategic focus and leadership changes are positive steps towards sustaining growth.

Positive Factors

Market Positioning

PRIM is well-positioned to benefit from steady and evolving structural tailwinds across end-markets.

Renewables and Infrastructure

Primoris Services is positioned to benefit from increased spending on renewables and energy infrastructure due to numerous demand tailwinds.

Negative Factors

Management Uncertainty

There is an uncertain permanent CEO backdrop, which contributes to a cautious sentiment until further engagement from interim leadership.

Renewables Spending Risk

A slowdown in renewables spending is identified as the biggest risk to the company's growth story.

Primoris Services (PRIM) vs. S&P 500 (SPY)

Market Cap

$3.12B

Dividend Yield0.48%

Average Volume (3M)983.25K

Price to Earnings (P/E)17.5

Beta (1Y)1.58

Revenue Growth11.40%

EPS Growth42.51%

CountryUS

Employees15,716

SectorIndustrials

Sector Strength68

IndustryEngineering & Construction

Share Statistics

EPS (TTM)3.31

Shares Outstanding53,915,203

10 Day Avg. Volume913,105

30 Day Avg. Volume983,245

Financial Highlights & Ratios

PEG Ratio0.41

Price to Book (P/B)N/A

Price to Sales (P/S)0.54

Price to Cash Flow (P/CF)2.90

P/FCF Ratio2.90

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$86.00

Price Target Upside48.81% Upside

Rating ConsensusStrong Buy

Number of Analyst Covering6

Primoris Services Business Overview & Revenue Model

Company DescriptionPrimoris Services Corporation, a specialty contractor company, provides a range of construction, fabrication, maintenance, replacement, and engineering services in the United States and Canada. It operates through three segments: Utilities, Energy/Renewables, and Pipeline Services. The Utilities segment offers installation and maintenance services for new and existing natural gas distribution systems, electric utility distribution and transmission systems, and communications systems. The Energy/Renewables segment provides a range of services, including engineering, procurement, and construction, as well as retrofits, highway and bridge construction, demolition, site work, soil stabilization, mass excavation, flood control, upgrades, repairs, outages, and maintenance services to renewable energy and energy storage, renewable fuels, petroleum, refining, and petrochemical industries, as well as state departments of transportation. The Pipeline Services segment offers a range of services comprising pipeline construction, maintenance, facility, and integrity services; installation of compressor and pump stations; and metering facilities for entities in the petroleum and petrochemical industries, as well as gas, water, and sewer utilities. The company was founded in 1960 and is headquartered in Dallas, Texas.

How the Company Makes MoneyPrimoris Services Corporation generates revenue through its diverse portfolio of services which are primarily divided into three key segments: Utilities, Energy/Renewables, and Pipeline Services. The Utilities segment focuses on electric and gas utility services, including distribution and transmission infrastructure. The Energy/Renewables segment involves the construction and maintenance of power plants, solar installations, and other renewable energy projects. The Pipeline Services segment offers construction and maintenance services for pipeline infrastructure. The company earns money by securing contracts with government entities, utilities, and private companies, often through competitive bidding processes. Long-term maintenance contracts and strategic partnerships with major energy companies also contribute significantly to its earnings.

Primoris Services Financial Statement Overview

Summary

Primoris Services shows strong financial performance with consistent revenue growth and robust cash flow management. The balance sheet is stable, though an increase in debt should be monitored.

Income Statement

Very Positive

Primoris Services has shown a consistent increase in revenue, with a revenue growth rate of approximately 11.4% from 2023 to 2024. The company maintains a healthy gross profit margin of 11.04% and a net profit margin of 2.84% for 2024. The EBIT margin stands at 4.99%, reflecting effective cost management. However, the EBITDA margin remains consistent with EBIT, indicating no additional significant non-operating income or expenses.

Balance Sheet

Positive

The company has a moderate debt-to-equity ratio of 0.29 in 2024, indicating a balanced use of leverage. Return on Equity (ROE) is at 12.83%, showing efficient use of equity capital. The equity ratio is robust at 33.6%, suggesting a stable financial position and sufficient asset coverage. However, the increase in total debt from previous years should be monitored for potential risks.

Cash Flow

Positive

Primoris Services demonstrates strong cash flow management with a significant increase in operating cash flow in 2024. The free cash flow to net income ratio of 2.11 indicates efficient conversion of net income into cash flow, supporting future investments and debt servicing. The operating cash flow to net income ratio of 2.81 underscores strong operational efficiency.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
6.37B	5.72B	4.42B	3.50B	3.49B
	Gross Profit
703.25M	587.49M	456.88M	416.66M	370.21M
	EBIT
317.45M	253.07M	195.34M	170.15M	163.95M
	EBITDA
317.45M	362.88M	301.73M	276.75M	242.23M
	Net Income Common Stockholders
180.89M	126.14M	133.02M	115.74M	104.98M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
455.82M	217.78M	248.69M	200.51M	326.74M
	Total Assets
4.20B	3.83B	3.54B	2.54B	1.97B
	Total Debt
408.00M	1.32B	1.27B	759.52M	454.47M
	Net Debt
-47.82M	1.10B	1.03B	559.01M	127.73M
	Total Liabilities
2.79B	2.59B	2.44B	1.55B	1.25B
	Stockholders Equity
1.41B	1.24B	1.11B	990.05M	714.75M
Cash Flow		Free Cash Flow
381.76M	95.55M	-11.34M	-54.09M	247.57M
	Operating Cash Flow
508.31M	198.55M	83.35M	79.75M	311.93M
	Investing Cash Flow
-27.23M	-30.01M	-481.94M	-691.27M	-42.51M
	Financing Cash Flow
-244.36M	-205.28M	452.04M	485.73M	-62.82M

Primoris Services Technical Analysis

Technical Analysis Sentiment

Negative

Last Price57.79

Price Trends

50DMA

65.48

Negative

100DMA

72.97

Negative

200DMA

65.35

Negative

Market Momentum

MACD

-2.59

Negative

RSI

44.19

Neutral

STOCH

76.00

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PRIM, the sentiment is Negative. The current price of 57.79 is below the 20-day moving average (MA) of 58.79, below the 50-day MA of 65.48, and below the 200-day MA of 65.35, indicating a bearish trend. The MACD of -2.59 indicates Negative momentum. The RSI at 44.19 is Neutral, neither overbought nor oversold. The STOCH value of 76.00 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PRIM.

Primoris Services Risk Analysis

Primoris Services disclosed 42 risk factors in its most recent earnings report. Primoris Services reported the most risks in the “Finance & Corporate” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Primoris Services Peers Comparison

Overall Rating

UnderperformOutperform

Sector (63)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
STRL	80 Outperform	$4.11B	16.35	36.08%	―	7.28%	85.63%
GVA	76 Outperform	$3.38B	32.35	12.68%	0.66%	14.20%	191.86%
PRIM	75 Outperform	$3.12B	17.45	13.67%	0.48%	11.40%	42.51%
ROAD	72 Outperform	$4.46B	74.99	8.41%	―	22.91%	-1.39%
IESC	70 Neutral	$3.78B	17.79	37.89%	―	23.09%	102.01%
Sector *	63 Neutral	$4.30B	10.98	5.71%	232.99%	4.77%	-5.69%
MYRG	58 Neutral	$1.82B	61.05	4.84%	―	-7.73%	-65.81%

* Industrials Sector Average

Performance Comparison

PRIM

Primoris Services

57.79

13.48

30.42%

GVA

Granite Construction

77.67

23.76

44.07%

IESC

IES Holdings

188.09

67.42

55.87%

MYRG

MYR Group

113.46

-51.17

-31.08%

STRL

Sterling Construction

141.00

41.31

41.44%

ROAD

Construction Partners

79.96

26.20

48.74%

Primoris Services Earnings Call Summary

Earnings Call Date: Feb 24, 2025 | % Change Since: -10.03% | Next Earnings Date: May 13, 2025

Earnings Call Sentiment Positive

The earnings call highlighted a record-breaking year for Primoris with significant achievements in revenue, backlog, and cash flow. While there were challenges in the energy segment and pipeline activity, the overall outlook for 2025 remains positive with strong growth expected in utilities, renewables, and other strategic areas.

Highlights

Record-Breaking Year

Primoris had its best year in company history for revenue, earnings, backlog, and cash flow from operations. Total backlog reached $11.9 billion, with more than $7.7 billion of new work booked during the year.

Strong Cash Flow

Record cash flow from operations exceeded $500 million, driven by improvements in contract assets and upfront procurement and mobilization payments.

Utilities Segment Performance

Utilities segment revenue grew, with significant margin improvements, driven by favorable weather, increased customer activity, and $9 million from storm restoration work. Gross margins improved to 12.1% from 7.4% in the prior year.

Renewables Growth

Renewables business approached $2 billion in revenue in 2024 with nearly $900 million booked in the fourth quarter, closing the year with approximately $3.1 billion in backlog.

Earnings Guidance for 2025

Primoris expects earnings per fully diluted share to be between $3.70 and $3.90, with adjusted EPS between $4.20 and $4.40, both representing double-digit percent growth from 2024.

Lowlights

Energy Segment Challenges

Energy segment gross profit decreased by $9.5 million or 8% compared to the prior year, with gross margins falling to 9.5% due to fewer project closeouts in renewables and weather impacts.

Pipeline Activity Decline

Pipeline activity remained slow and competitive, with a lower year in pipeline activity anticipated. Gross margins were impacted by challenges in pipeline projects.

Impact of Regulatory Environment

Uncertainty in renewables and other parts of the business due to rapidly changing trade and regulatory environment, including tariffs on key electrical components.

Company Guidance

During the Primoris Services Corporation fourth quarter and full year 2024 earnings call, the company provided strong guidance for 2025, reflecting its robust performance in 2024. The company achieved record revenue, earnings, backlog, and cash flow from operations, with total backlog reaching $11.9 billion, driven by $7.7 billion in new bookings. For 2025, Primoris expects earnings per fully diluted share to be between $3.70 and $3.90, and adjusted EPS between $4.20 and $4.40, representing double-digit growth at the midpoint. Adjusted EBITDA is projected to range from $440 million to $460 million. The Utilities segment showed improved margins with a target of 9% to 11% for 2025, while the Energy segment anticipates gross margins between 10% and 12%. Operating cash flow for 2025 is expected to normalize to $200 million to $225 million, following a record $508 million in 2024. The company also continued its strategic focus on renewables, with a strong backlog in solar and related services, and aims for further margin improvements through operational efficiencies and strategic resource allocation.

Primoris Services Corporate Events

Executive/Board Changes

Primoris Services Appoints Interim CEO and COO

Neutral

Mar 26, 2025

On March 21, 2025, Primoris Services Corporation’s Board of Directors approved compensation terms for David King and Jeremy Kinch, following their appointments as Interim President and CEO, and Chief Operating Officer, respectively. King will receive a $950,000 annual salary, equity in restricted stock units, and a potential bonus, while Kinch will earn a $600,000 salary, long-term incentive equity awards, and a bonus, aligning with his existing employment agreement.

Executive/Board ChangesBusiness Operations and Strategy

Primoris Services Announces Leadership Changes in 2025

Neutral

Mar 20, 2025

On March 14, 2025, Primoris Services Corporation announced leadership changes with David King appointed as Interim President and CEO, succeeding Tom McCormick, who resigned effective March 20, 2025. Jeremy Kinch was promoted to Chief Operating Officer. These changes reflect a strategic shift in the company’s leadership, potentially impacting its operations and market position. Additionally, McCormick’s separation included a comprehensive severance package, indicating a significant transition phase for the company.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.