Should You Buy, Hold or Sell Quanta Stock Post Q3 Earnings?

Core Insights - Quanta Services, Inc. (PWR) reported strong third-quarter 2025 results, with earnings and revenues exceeding estimates by 2.5%, showcasing double-digit growth across key metrics compared to the previous year [1][2] Financial Performance - Adjusted earnings per share reached $3.33, a 22% increase year-over-year, while revenues amounted to $7.6 billion, reflecting a 17.5% growth [2] - Adjusted EBITDA was $858 million, up 26% from $682.8 million in the prior-year quarter [2] - Operating cash flow was solid at $438 million, with full-year free cash flow expectations raised to $1.5 billion at the midpoint [2] Stock Performance - PWR shares have gained 35% year-to-date, outperforming the Zacks Engineering - R and D Services industry (15%) and the S&P 500 (18.3%) [5] - The stock has also outperformed the broader Construction sector, which rose by 4% during the same period [5] Market Demand and Backlog - Quanta reported a record backlog of $39.2 billion, up from $33.96 billion a year ago, indicating strong demand visibility across major end markets [12] - The Electric segment accounted for 80.9% of total revenues in Q3 2025, generating $6.17 billion, a 17.9% year-over-year increase [9][12] - Growth was driven by grid modernization, renewable energy projects, and increasing demand from technology and industrial customers [10][11] Strategic Initiatives - The company expanded its total solutions platform to meet rising power generation needs, integrating engineering, technology, craft labor, and supply-chain capabilities [14][15] - A joint venture with Zachry was formed to support a major program with NiSource, covering various infrastructure needs [15] Earnings Estimates - For 2025, Quanta's earnings estimate remains unchanged at $10.57, with projected year-over-year growth of 17.8% and 16.7% for 2025 and 2026, respectively [16] Valuation - Quanta is currently trading at a premium compared to industry peers, with a forward 12-month price-to-earnings (P/E) ratio above the five-year average [20][22]