Quanta Services (PWR) AI Stock Analysis

• Market Cap: $64.90B
• Dividend Yield: 0.09%
• Average Volume (3M): 1.04M
• Price to Earnings (P/E): 64.6
• Beta (1Y): 1.51
• Revenue Growth: 18.72%
• EPS Growth: 23.97%
• Country: US
• Employees: 58,400
• Sector: Industrials
• Sector Strength: 72
• Industry: Engineering & Construction
• EPS (TTM): 3.33
• Shares Outstanding: 149,115,890
• 10 Day Avg. Volume: 1,141,850
• 30 Day Avg. Volume: 1,038,678
• PEG Ratio: 2.56
• Price to Book (P/B): 6.35
• Price to Sales (P/S): 1.96
• P/FCF Ratio: 31.44
• Enterprise Value/Market Cap: 1.05
• Enterprise Value/Revenue: 2.52
• Enterprise Value/Gross Profit: 18.65
• Enterprise Value/Ebitda: 26.63
• 1Y Price Target: $485.67
• Price Target Upside: 11.60% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 16
• EPS Forecast (FY): 10.61
• Revenue Forecast (FY): $28.01B

• Rating: 78 Outperform
• Price Target: $528.00 ▲(21.32% Upside)

Quanta Services demonstrates strong financial performance and positive technical indicators, supported by a robust earnings call with record backlog and increased revenue guidance. However, the high P/E ratio suggests potential overvaluation, and challenges in certain business segments could impact future growth.

Positive Factors

Strategic Partnerships

The partnership with AEP enhances Quanta's capabilities in high-voltage transmission, strengthening its market position and expanding its service offerings, which is crucial for long-term growth and competitiveness in the energy infrastructure sector.

Record Backlog

A record backlog indicates strong demand for Quanta's services, providing revenue visibility and supporting sustained growth. This positions the company well to capitalize on future infrastructure investments.

Expansion of Total Solutions Platform

Expanding the Total Solutions platform allows Quanta to offer comprehensive services, enhancing its competitive edge and ability to capture more market share in the growing renewable energy and infrastructure sectors.

Negative Factors

Decline in Free Cash Flow Growth

A decline in free cash flow growth can limit Quanta's ability to invest in new projects or return capital to shareholders, potentially impacting its financial flexibility and growth prospects.

High-Voltage Transmission Uncertainty

Uncertainty in securing high-voltage transmission projects could hinder Quanta's growth in a key segment, affecting future revenue streams and market positioning.

Pipeline Business Challenges

Challenges in the pipeline business, including risk profiles and permitting issues, may constrain growth and profitability in this segment, impacting overall business performance.

Quanta Services Business Overview & Revenue Model

Company Description

Quanta Services, Inc. provides specialty contracting services worldwide. The Electric Power Infrastructure Solutions segment engages in the design, procurement, construction, upgrade, repair, and maintenance of electric power transmission and distribution infrastructure and substation facilities; energized installation, maintenance, and upgrade of electric power infrastructure projects; installation of smart grid technologies on electric power networks; and design, installation, maintenance, and repair of commercial and industrial wirings. This segment also offers aviation services; emergency restoration services; and other engineering and technical services; design and construction solutions to wireline and wireless communications, cable multi-system operators, and other customers; and training for electric workers, as well as training for the gas distribution and communications industries. The Renewable Energy Infrastructure Solutions segment is the involved in engineering, procurement, construction, upgrade, repair, and maintenance services to renewable generation facilities, such as wind, solar, and hydropower generation facilities, as well as battery storage facilities; and provision of engineering and construction services for substations and switchyards, transmission, and other electrical infrastructures. The Underground Utility and Infrastructure Solutions segment offers design, engineering, construction, upgrade repair, and maintenance services to customers involved in the transportation, distribution, storage and processing of natural gas, oil, and other products; fabrication of pipeline support systems and related structures and facilities; and engineering and construction of pipeline and storage systems, and compressor and pump stations. The company was formerly known as Fabal Construction, Inc. and changed its name to Quanta Services, Inc. in November 1997. Quanta Services, Inc. was incorporated in 1997 and is headquartered in Houston, Texas.

How the Company Makes Money

Quanta Services generates revenue primarily through contracts with utility companies, energy producers, and telecommunications firms. The company's revenue model is built on providing a range of services that include construction, engineering, maintenance, and repair of infrastructure projects. Key revenue streams stem from long-term contracts for electric power transmission and distribution, oil and gas pipeline construction, and telecom network installations. Quanta also benefits from significant partnerships with major utility and energy companies, which provide a steady flow of projects and contribute to stable earnings. Additionally, the company's involvement in renewable energy projects and infrastructure modernization initiatives positions it well for future growth, particularly as demand for sustainable energy solutions increases.

Quanta Services Financial Statement Overview

Summary

Quanta Services demonstrates strong financial health with consistent revenue growth and solid profitability. The balance sheet is stable, though leverage has increased slightly. Cash flow metrics are generally positive, but the recent decline in free cash flow growth is a point of concern. Overall, the company is well-positioned in the Engineering & Construction industry, with opportunities for enhancing net margins and managing leverage.

Income Statement

Quanta Services has demonstrated consistent revenue growth, with a TTM growth rate of 3.88% and a strong historical trend. The gross profit margin is stable at 13.51%, indicating efficient cost management. However, the net profit margin has slightly decreased to 3.76% from the previous year, suggesting some pressure on net earnings. Overall, the company maintains solid profitability metrics, with room for improvement in net margins.

Balance Sheet

The company's debt-to-equity ratio of 0.72 indicates a moderate level of leverage, which is manageable but slightly higher than previous years. The return on equity is strong at 13.12%, reflecting effective use of shareholder funds. The equity ratio stands at 36.91%, showing a healthy balance between equity and total assets. While the balance sheet is robust, careful monitoring of debt levels is advisable.

Cash Flow

Operating cash flow remains strong, but the free cash flow growth rate has declined by 7.83% in the TTM period, indicating potential challenges in cash generation. The operating cash flow to net income ratio is 0.26, suggesting a solid conversion of income to cash. The free cash flow to net income ratio of 0.69 highlights efficient cash management, though the recent decline in free cash flow growth warrants attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.06B	23.67B	20.88B	17.07B	12.98B	11.20B
Gross Profit	3.66B	3.13B	2.65B	2.18B	1.79B	1.58B
EBITDA	2.56B	2.16B	1.77B	1.47B	1.11B	918.32M
Net Income	1.02B	904.82M	744.69M	491.19M	485.96M	445.60M
Balance Sheet
Total Assets	22.74B	18.68B	16.24B	13.46B	12.86B	8.40B
Cash, Cash Equivalents and Short-Term Investments	610.39M	741.96M	1.29B	428.50M	229.10M	184.62M
Total Debt	6.02B	4.48B	4.46B	3.98B	4.00B	1.45B
Total Liabilities	14.34B	11.35B	9.95B	8.07B	7.74B	4.05B
Stockholders Equity	8.40B	7.32B	6.27B	5.38B	5.11B	4.34B
Cash Flow
Free Cash Flow	1.25B	1.48B	1.14B	701.53M	195.67M	855.40M
Operating Cash Flow	1.81B	2.08B	1.58B	1.13B	582.39M	1.12B
Investing Cash Flow	-2.45B	-2.29B	-989.65M	-617.19M	-2.90B	-499.32M
Financing Cash Flow	498.35M	-305.64M	268.50M	-311.07M	2.36B	-601.37M

Quanta Services Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 435.20
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PWR, the sentiment is Neutral. The current price of 435.2 is below the 20-day moving average (MA) of 447.85, below the 50-day MA of 442.77, and above the 200-day MA of 373.29, indicating a neutral trend. The MACD of -3.84 indicates Positive momentum. The RSI at 46.92 is Neutral, neither overbought nor oversold. The STOCH value of 33.84 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for PWR.

Quanta Services Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
DY	80 Outperform	$10.10B	34.36	21.90%	―	13.19%	33.58%
FIX	80 Outperform	$34.05B	40.88	43.84%	0.20%	27.71%	80.54%
APG	79 Outperform	$16.54B	108.45	8.71%	―	10.69%	―
PWR	78 Outperform	$64.90B	64.56	13.16%	0.09%	18.72%	23.97%
MTZ	74 Outperform	$17.75B	53.49	11.18%	―	12.99%	274.10%
EME	73 Outperform	$28.01B	25.16	37.10%	0.16%	14.11%	26.26%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%

Quanta Services Corporate Events

Quanta Services Reports Strong Q3 2025 Financial Results

Quanta Services reported strong financial results for the third quarter of 2025, with revenues reaching $7.63 billion, a significant increase from the previous year. The company achieved record backlog levels and double-digit growth in adjusted EBITDA and earnings per share, driven by accelerating demand in its Electric segment. Quanta also announced its selection by NiSource Inc. for a major power generation and grid infrastructure project, highlighting its strategic focus on expanding its total solutions platform to meet growing electricity demands. The company’s outlook for 2025 remains positive, with expectations for continued revenue growth and strategic acquisitions enhancing its market position.