Primoris Services: A Long-Term Pick in US Energy Infrastructure◉ Abstract
Our latest analysis focuses on the booming U.S. utility and energy sector, set to hit a massive $1.1 trillion! Learn about the key drivers fueling this growth, from our increasing electricity needs and the electric vehicle revolution to the exciting rise of clean energy.
We have also given a “Buy” rating on Primoris Services Corporation NYSE:PRIM , a major player in building this energy infrastructure. Our analysis reveals their strong financial performance, attractive valuation compared to its peers, and promising technical indicators. While acknowledging potential headwinds like regulatory shifts, we believe Primoris presents a compelling long-term investment opportunity with significant upside potential. Read detailed analysis here and invest smartly.
Read full analysis here...
◉ Introduction
Imagine the companies that bring electricity to your home, the gas for your stove, and are building the future of clean energy. That's the U.S. utility and energy sector! It's a massive part of the American economy, and it's getting even bigger. By 2025, experts predict it will be worth a whopping $1.1 trillion! This includes everything from generating electricity to delivering it through power lines and pipelines, as well as distributing natural gas across the country.
This sector has been steadily growing at about 2.7% each year between 2020 and 2025, and it looks like this growth is going to continue. This article will give you a snapshot of the major reasons behind this growth, top players in this sector, and investment opportunities.
◉ Major Factors Behind the Growth of US Energy Sector
1. Electricity Use is Climbing: Americans are using more power than ever. The EIA expects electricity consumption to hit 4,205 Billion kWh in 2025, up from 4,097 Billion kWh in 2024. This surge is fuelled by increased usage in residential, commercial, and industrial sectors.
2. Everything’s Going Electric: Think about electric cars, heat pumps that heat and cool homes, and even cleaner machines in factories. More and more things are switching to electricity, which means we need even more power! This big shift towards using electricity is called electrification, and it's a major driver for the energy sector.
3. Clean Energy on the Rise: Solar panels and wind turbines are becoming a bigger part of how we get our electricity. These renewable energy sources are growing fast. By 2026, it's expected that they will provide about 27% of all the electricity in the U.S., up from around 25% in 2024. This move towards cleaner energy is really important for the future.
4. Massive Investments Ahead: To keep up with this growing demand and the shift to new technologies, utility companies are investing a lot of money. They are upgrading power grids (the network of lines that deliver electricity), building charging stations for electric vehicles (EVs), and using smart technologies to manage energy better. Experts at S&P Global predict that total spending on these things could be over $790 Billion between 2025 and 2030!
◉ Big Players in Building the US Energy Infrastructure
1. Quanta Services, Inc. NYSE:PWR : A premier provider of specialized infrastructure solutions for the electric power and oil & gas sectors. They are also heavily involved in renewable energy projects like solar and wind farms. You can learn more about them on their official website .
2. Primoris Services Corporation NYSE:PRIM : They provide construction and engineering services for the energy, utility, and infrastructure markets. They are increasingly focusing on building projects related to renewable energy. You can explore their details on their official website .
3. MasTec, Inc. NYSE:MTZ : This is a top infrastructure company in North America, working on energy, utility, and communication projects. This includes building renewable energy facilities, telecom networks, and oil & gas pipelines. You can find more information on their official website .
This report offers an in-depth analysis of Primoris Services Corporation , a prominent player in the U.S. energy infrastructure space.
Our long term recommendation is backed by Primoris Services Corporation ’s technical analysis and fundamental performance.
◉ Investment Advice
💡 Buy Primoris Services Corporation NYSE:PRIM
● Buy Range - 67 - 68
● Sell Target - 88 - 90
● Potential Return - 30% - 45%
● Approx Holding Period - 12-14 months
◉ Revenue and Profit Analysis
● Year-on-Year
- In FY24, Primoris reported revenue of $6,367 Million, marking an 11% increase from $5,715 Million in FY23.
- EBITDA grew to $415 Million, up from $366 Million the previous year, with the EBITDA margin slightly improving to 6.5% from 6.4%.
● Quarter-on-Quarter
- Q4 FY24 revenue reached a record $1,741 Million, up from $1,649 Million in Q3 and 14.9% higher than $1,515 Million in Q4 FY23.
- Despite the revenue growth, Q4 EBITDA declined to $110.6 Million from $123 Million in Q3.
- Diluted EPS (LTM) rose to $3.30 in Q4, up from $3.00 in Q3 FY24, indicating solid earnings momentum.
◉ Valuation
1. P/E Ratio (Price-to-Earnings)
● Compared to Peers:
- PRIM’s P/E is 17.9x, much lower than the peer average of 32.7x. This means the stock is cheaper than most competitors based on earnings.
● Compared to Industry:
- With a P/E ratio of 17.9x, PRIM trades below the industry average of 26.4x, suggesting it offers strong value within the sector.
2. P/B Ratio (Price-to-Book)
● Compared to Peers:
- PRIM’s P/B is 2.6x, while peers average 4.5x—again showing the stock may be undervalued.
● Compared to Industry:
- Compared to the industry average of 4.4x, PRIM still appears to be a bargain.
3. PEG Ratio (Price/Earnings to Growth)
PRIM’s PEG ratio is 0.43, which suggests the stock is not only cheap but also expected to grow earnings strongly—an attractive combination for investors.
◉ Cash Flow Analysis
- Primoris saw a strong improvement in operating cash flow, which jumped to $508 Million in FY24 from $196.8 Million in FY23—a sign of better cash generation from its core business.
◉ Debt Analysis
- With a debt-to-equity ratio of 0.42, the company maintains a solid financial position, suggesting its debt levels are well under control and not overly risky.
◉ Top Shareholders
- The Vanguard Group holds a substantial 11.6% stake in Primoris, reflecting strong confidence in the company.
- BlackRock also increased its investment by 9.65% from Q3 FY24 and now owns approximately 11.3% of the company.
◉ Technical Aspects
- On the monthly chart, the price is in an overall uptrend and has bounced off the trendline support, indicating continued upward momentum.
- On the daily chart, the price has broken through a rounding bottom pattern and is holding above the breakout zone, suggesting a potential for further upside movement.
◉ Potential Risks & Challenges
1. Regulatory Uncertainty: Ongoing concerns about global trade policies, tariffs, and regulatory changes, especially in the solar and battery storage markets, could impact future project economics and timing.
2. SG&A Expenses: Increased by $10.9 Million year-over-year, driven by higher personnel costs and $3.2 Million in severance expenses.
3. Energy Segment Backlog: Experienced a decrease due to the timing of new solar awards, potentially affecting future revenue visibility.
◉ Conclusion
Primoris Services Corporation NYSE:PRIM stands out as a promising investment, backed by consistent growth, strong financials, and a strategic focus on renewable energy and infrastructure. Despite facing risks like regulatory changes and backlog fluctuations, its solid position in the U.S. energy sector—especially with increased demand for clean energy solutions—gives it a clear path forward. With a competitive valuation and support from major investors like Vanguard and BlackRock, Primoris is poised for sustainable growth, making it an attractive long-term opportunity for investors.
