Primoris Services Stock Up 22.8% Since Q2 Earnings: Buy or Wait?

Core Insights - Primoris Services Corporation's share price has increased by 22.8% since the release of its Q2 2025 earnings, outperforming the Zacks Building Products - Heavy Construction industry, the broader Zacks Construction sector, and the S&P 500 index [1][7]. Financial Performance - The company reported adjusted earnings of $1.68 per share and revenues of $1.89 billion for Q2 2025, exceeding the Zacks Consensus Estimate by 58.5% and 12.3% respectively. Year-over-year, earnings rose by 162.5% and revenues by 20.9% [2]. - Total backlog increased by 10% to $11.49 billion as of June 30, 2025, compared to $10.45 billion a year ago [2]. Guidance and Market Opportunities - Primoris Services raised its 2025 adjusted EPS guidance to a range of $4.90 to $5.10, up from $4.20-$4.40, and adjusted EBITDA guidance to between $490 million and $510 million, up from $440-$460 million [3]. - The company is evaluating approximately $1.7 billion in data center projects, expecting to secure contracts by the end of 2025, which will enhance revenue visibility and market exposure [5]. Market Trends and Competitive Position - The demand for data center infrastructure is strong, and Primoris Services is actively seeking opportunities to expand its market presence in this area [4]. - Primoris Services competes with larger peers like EMCOR, MasTec, and Quanta Services by focusing on niche strengths in utility, pipeline, and specialty contracting, leveraging strong regional relationships and mid-market flexibility [12]. Debt Management and Financial Health - The company reduced its long-term debt to $525 million from $660.2 million at the end of 2024, demonstrating a balanced capital allocation approach [10]. - As of June 30, 2025, Primoris Services had $390.3 million in cash and cash equivalents, with sufficient liquidity to meet short-term obligations of $78.1 million [11]. Earnings Estimates and Valuation - Earnings estimates for 2025 and 2026 have been revised upward to $4.67 and $5.23 per share, indicating year-over-year growth of 20.7% and 12.1% respectively [14]. - The stock is currently trading at a forward P/E ratio of 22.28, indicating a premium valuation compared to industry peers, which reflects strong market potential [16]. Analyst Sentiment - Analysts show optimism for Primoris Services, with 90% of recommendations indicating a "Strong Buy" rating, suggesting confidence in the company's long-term positioning and growth prospects [18].