Core Insights - Strong secular demand from broadband and network expansion is driving growth for utility and telecom infrastructure services in the United States, benefiting companies like Dycom Industries, Inc. and Primoris Services Corporation [1] Group 1: Dycom Industries, Inc. (DY) - Dycom is a specialty contracting firm in the telecom industry, gaining from increased capital spending by hyperscalers to support data-heavy applications and AI workloads [5][6] - As of October 2025, Dycom's total backlog grew 4.7% year over year to $8.22 billion, with the next 12-month backlog rising 11.4% [5] - The Broadband Equity, Access and Deployment (BEAD) program is expected to catalyze significant multi-year spending, with $29.5 billion anticipated for state and territory spending, directly aligning with Dycom's capabilities [6] - Dycom expects total contract revenues for fiscal 2026 to be in the range of $5.35-$5.425 billion, representing a 13.8-15.4% year-over-year increase [7] - Dycom's trailing 12-month return on equity (ROE) is 22.2%, significantly exceeding Primoris, indicating strong efficiency in generating shareholder returns [24] Group 2: Primoris Services Corporation (PRIM) - Primoris has been experiencing robust demand across various sectors, including power delivery, gas operations, communications, and renewable energy, supported by federal and state funding initiatives [9] - Adjusted EPS for the first nine months of 2025 rose 65.7% year over year to $4.54, with the 2025 adjusted EPS outlook raised to $5.35-$5.55, up from $4.90-$5.10 [11] - The One Big Beautiful Bill Act provides tax incentives and allocates about $150 billion for defense spending, benefiting Primoris by enabling a substantial volume of projects [12] - Despite strong demand, Primoris faces margin pressures, with third-quarter 2025 margins contracting 120 basis points to 10.8% due to various operational challenges [13] - Primoris' EPS estimates for 2025 indicate 41.9% year-over-year growth, but the 2026 estimates have seen downward revisions [20][22] Group 3: Comparative Analysis - Dycom offers higher growth potential through fiber exposure and BEAD funding but trades at a premium valuation, while Primoris benefits from diversified infrastructure demand but faces margin pressures [10][26] - Dycom's stock has outperformed Primoris in recent months, indicating stronger market performance [14] - Dycom is considered a better investment option due to clearer growth visibility and stronger execution metrics compared to Primoris, which has a weaker near-term outlook [28]

Summary of Primoris Conference Call Company Overview - **Company**: Primoris Services Corporation - **Industry**: Engineering construction, focusing on utilities and energy sectors - **Segments**: - Utilities: $2.7 billion gross revenue, with a margin target of 10%-12% - Power delivery: 45% - Gas utility: 40% - Communications: 15% [2][3] - Energy: $4.9 billion gross revenue - Renewables: 60% - Traditional industrial (natural gas power): 20% - Heavy civil (highways, roads, bridges): 12% - Pipeline: 7% [3] Core Insights and Arguments - **Demand Environment**: Strong demand across end markets, with a focus on maintaining long-term client relationships through Master Service Agreements (MSAs) [5][6] - **Competitive Position**: Primoris competes on service quality and long-term relationships rather than just price, especially in utilities [5][6] - **Project Work**: The energy segment is driven by discrete projects, with varying competition levels. The pipeline business is currently competitive, while solar and gas power generation are seeing increased demand [7][9] - **Growth Potential**: - Natural gas generation is expected to be the highest growth area in the next few years [11] - Pipeline projects are anticipated to contribute significantly again, with $4.5 billion worth of projects tracked [12] - Solar business growth is expected to flatten in 2026 after a strong 2025 [12][13] - Power delivery is seen as a long-term growth driver, with a goal to increase transmission and substation work [14] Financial Performance and Margins - **Bid Margins**: Current project work margins are stable, with equitable contract terms allowing for better margin management [17][18] - **Utility Business Improvements**: Focus on resource utilization, contract renegotiation, and efficient billing has improved margins [19][21] - **Project Work vs. MSA**: Project work allows for better resource planning and efficiency, translating into higher margins [22][23] Capital Allocation Strategy - **Priorities**: - Organic growth is the top priority, followed by debt repayment, M&A, and return of capital [29] - No M&A in the last three years due to a disciplined approach; potential for acquisition in 2026 if suitable opportunities arise [30] - **Valuation Multiples**: Current multiples for potential acquisitions are in the 8-10 times range, with some exceptions in electrical CNI [31][32] Future Milestones and Catalysts - **Growth Drivers**: Continued focus on natural gas generation and pipeline resurgence are expected to drive growth [33][34] - **Margin Improvement**: Anticipated margin appreciation in power delivery and energy segments [34] Technology and AI Integration - **AI Utilization**: Primoris is investing in foundational AI and automation strategies to improve efficiency and reduce SG&A growth relative to revenue [36][38] Equipment Strategy - **CapEx Flexibility**: Transitioning from a leasing-heavy strategy to a more balanced approach between purchasing and leasing equipment [40][41] Conclusion - Primoris is well-positioned to leverage strong market tailwinds and improve operational efficiency, with a focus on organic growth and strategic capital allocation [46]

Group 1 - The presentation features key personnel from Goldman Sachs, including Ati Modak, who covers Energy Services, and Adam Bubes, who focuses on machinery and infrastructure [1] - David Watson serves as the President and CEO of Argan, while Jeremy holds the position of President and COO of Primoris [1]

Summary of Primoris Services Conference Call Company Overview - **Company**: Primoris Services (NYSE: PRIM) - **Industry**: Energy Services, specifically focusing on critical infrastructure including power generation, solar, gas, transmission, distribution, and oil and gas pipelines [1][4][10] Core Points and Arguments Strategic Focus - Primoris emphasizes its role in critical energy infrastructure, with a focus on power generation, particularly in solar and gas sectors [4][10] - The company aims to be the best capital allocator in its space, supporting organic growth while considering divestitures where necessary [5] Business Evolution - Primoris has undergone a strategic plan over the past three years to focus on high-growth, high-margin businesses, particularly in solar and gas-powered generation [10] - The company has transitioned from a diversified portfolio to a more concentrated focus on areas with better cash generation potential [10] Solar Business Growth - Primoris has grown its solar business from zero in 2017 to a $3 billion business today, although growth is expected to moderate in the near term [17][19] - The company anticipates a flat to slightly declining growth in solar for 2026 due to work being pulled forward from 2025 [19] Gas Generation Focus - The gas generation segment is currently around $400 million, with a focus on simple cycle projects, which are less risky and fit within the company’s operational capabilities [17][24] - Primoris has been able to attract talent and resources to support growth in this area, which was not initially factored into their strategic plan [20][21] Power Delivery Business - The power delivery segment constitutes about 45% of Primoris's utility segment, generating approximately $1.2 billion annually, primarily from distribution work [39] - There is a noted growth opportunity in transmission and substation work, although labor availability remains a constraint [40][41] Labor Availability Challenges - Labor availability, particularly for specialized roles like linemen, is a significant constraint on growth, prompting investments in training and recruitment [48][49] - Both companies are focusing on creating career paths and training programs to develop talent internally [53] Competitive Positioning - Primoris has maintained long-standing relationships with turbine suppliers, which has facilitated new project opportunities [44] - The company is positioned to benefit from a rising demand for electricity and the need for new power plants, particularly as older infrastructure approaches replacement cycles [33] Financial Outlook and Capital Allocation - Primoris is focused on organic growth as its primary capital allocation strategy, with a secondary focus on acquisitions in high-growth areas [63] - The company has a low leverage ratio and is well-positioned for potential acquisitions, although it prioritizes organic growth first [63] Other Important Insights - The telecom segment, while small, is seen as having growth potential, particularly with new leadership and opportunities in data centers and government contracts [35][36] - The midstream business, which had declined significantly during COVID-19, is showing signs of recovery, with expectations to reach $500-600 million by the end of the year [45] This summary encapsulates the key points discussed during the conference call, highlighting Primoris Services' strategic focus, business evolution, growth areas, challenges, and financial outlook.

Financial Performance and Growth - The company's Utilities segment revenue reached $2.658 billion in TTM Q3 2025[9], while the Energy segment revenue was $4.931 billion in TTM Q3 2025[12, 19] - The company's backlog for Utilities was $6.593 billion in Q3 2025[15], and for Energy was $4.470 billion in Q3 2025[20] - The company targets a gross profit growth of 9% to 12%[38, 84] - The company projects full year 2025 Adjusted EBITDA to be between $510 million and $530 million[88, 98] - The company anticipates full year 2025 Adjusted EPS to be in the range of $5.35 to $5.55 per diluted share[88, 96] Strategic Focus and Market Positioning - The company is focused on high-growth markets like Renewables and Power Delivery[38, 41] - The company aims to grow solar revenue from $1.3 billion in 2023 to $2.9 billion in TTM Q3 2025[63] - The company is targeting an operating cash flow margin of 4% to 5% by 2026[84] - The company is aiming for a Net Debt / Adjusted EBITDA target of 1.5x[68, 84] Contract and Customer Base - Reimbursable contracts account for 51% of revenue, while fixed-price contracts account for 49% in TTM Q3 2025[25] - The company derives 41% of its revenue from its top 10 customers[33]

Core Viewpoint - Primoris Services Corporation will participate in two institutional investor conferences in January 2026, indicating the company's commitment to engaging with investors and showcasing its strategic initiatives [1]. Group 1: Conference Participation - The company will attend the Goldman Sachs Energy, CleanTech & Utilities Conference in Aventura, FL on January 7, 2026 [1]. - The company will also participate in the CJS Securities 26th Annual "New Ideas for the New Year" Conference virtually on January 14, 2026 [1]. - An updated investor presentation will be made available on the company's website [1].

Company Overview - Primoris Services Corporation is a leading specialty contractor in the engineering and construction sector, focusing on utilities, energy, and pipeline services [7] - The company reported trailing twelve-month revenue of $7.46 billion and net income of $277.14 million as of September 30, 2025 [5][10] - Primoris offers a range of services including construction, fabrication, maintenance, replacement, and engineering across various segments [10] Investment Activity - Informed Momentum Co LLC initiated a new position in Primoris Services Corporation, acquiring 67,981 shares valued at $9.18 million, representing 1.05% of the fund's total reportable assets under management (AUM) of $872.25 million [2][3] - This new position made Primoris the fourth largest holding among Informed Momentum's 254 equities [11] Market Performance - As of November 14, 2025, Primoris shares were priced at $118.04, reflecting a 50.2% increase over the past year, significantly outperforming the S&P 500 by 37.14 percentage points [3][5] - The company experienced a substantial revenue increase of 32% year-over-year in the third quarter, reaching $2.2 billion [12] Industry Context - Primoris is benefiting from the growing demand for infrastructure projects, particularly those aimed at expanding U.S. data center capacity to support artificial intelligence [12][13] - The AI industry is anticipated to undergo significant expansion, which could lead to continued sales growth for Primoris [13]

Core Insights - The U.S. infrastructure construction sector is experiencing strong demand driven by public and private investments, particularly in transportation, utilities, energy infrastructure, and mission-critical development [1][2] - Sterling Infrastructure, Inc. (STRL) and Primoris Services Corporation (PRIM) are well-positioned contractors benefiting from long-term infrastructure spending trends and the complexity of large-scale, non-residential projects [1][2] Company Overview: Sterling Infrastructure, Inc. (STRL) - STRL's E-Infrastructure segment is a primary growth driver, with strong demand in data centers, manufacturing, and large-scale distribution projects [5] - The integration of CEC has expanded STRL's electrical services platform, contributing over $41 million in revenues during Q3 2025 and supporting consolidated margin performance [6] - STRL reported a signed backlog of $2.6 billion in Q3 2025, a 64% year-over-year increase, with total potential work exceeding $4 billion [8][9] Company Overview: Primoris Services Corporation (PRIM) - PRIM benefits from steady demand across its diversified Utilities and Energy segments, with solid activity in power, communications, renewables, and pipeline-related work [10] - The company raised its full-year adjusted EPS outlook to a range of $5.35 to $5.55, significantly above the previous range and the $3.87 reported in 2024 [11] - Despite strong execution, PRIM's consolidated margins declined by 120 basis points year-over-year to 10.8% due to lower contributions from higher-margin projects and increased costs [12] Financial Performance and Valuation - STRL's share price performance has outpaced PRIM and the Zacks Engineering - R and D Services industry year-to-date [14] - STRL is trading at a premium valuation compared to PRIM on a forward 12-month price-to-earnings (P/E) ratio basis [16] - The Zacks Consensus Estimate for STRL's 2026 EPS indicates a 14.6% year-over-year growth, with the estimate increasing to $11.95 [19] - In contrast, PRIM's 2026 EPS estimate implies a 5.3% year-over-year improvement, but has decreased to $5.78 [21] Investment Outlook - STRL is positioned for near-term outperformance due to stronger earnings momentum and margin expansion potential, holding a Zacks Rank 2 (Buy) [22] - PRIM, with a Zacks Rank 3 (Hold), remains stable but may need clearer margin recovery to enhance its investment appeal [22]

Group 1: Great Lakes Dredge & Dock (GLDD) - Great Lakes Dredge & Dock is the largest provider of dredging services in the US, focusing on maintaining and deepening shipping channels, land reclamation, and storm-damaged coastline restoration [1] - The company has a Zacks Rank of 1 (Strong Buy) and has seen a Zacks Consensus Estimate for its current year earnings increase by 8.1% over the last 60 days [1] - Great Lakes Dredge & Dock has a PEG ratio of 1.9, which is lower than the industry average of 3.1, and possesses a Growth Score of A [2] Group 2: Primoris Services (PRIM) - Primoris Services is one of the largest specialty contractors and infrastructure companies in the United States [2] - The company also carries a Zacks Rank of 1 and has experienced a Zacks Consensus Estimate for its current year earnings increase of 9.1% over the last 60 days [2] - Primoris Services has a PEG ratio of 1.11 compared to the industry average of 3.35, and it holds a Growth Score of A [3] Group 3: Commercial Metals (CMC) - Commercial Metals manufactures, recycles, and markets steel and metal products, along with related materials and services [3] - The company has a Zacks Rank of 1 and has seen a significant increase in the Zacks Consensus Estimate for its current year earnings by 24.4% over the last 60 days [3] - Commercial Metals has a PEG ratio of 0.44, which is considerably lower than the industry average of 1.31, and it possesses a Growth Score of B [4]

Core Insights - Voya Investment Management's "Voya MI Dynamic Small Cap Fund" experienced underperformance in Q3 2025, primarily due to stock selection issues despite a strong recovery in equity markets [1] - The fund's performance was negatively impacted by its holdings, with technology and communication services sectors outperforming while consumer staples lagged [1] Company Performance - Primoris Services Corporation (NASDAQ:PRIM) showed a one-month return of 7.25% and a significant 73.42% increase over the last 52 weeks, closing at $134.47 per share with a market capitalization of $7.266 billion on December 08, 2025 [2] - The company reported Q3 2025 revenue of nearly $2.2 billion, marking a 32% increase from the previous year, driven by strong growth in the Energy and Utility segments [4] Fund Strategy and Holdings - The fund's overweight position in Primoris Services Corporation positively contributed to its performance, supported by a favorable view of the stock and its volatility exposure, which helped balance risk in the portfolio [3] - Primoris Services Corporation was one of the main individual contributors to the fund's performance alongside Uranium Energy Corp. and Cleveland-Cliffs Inc. [3]