Are Renewable and Storage Projects Supporting Quanta's Backlog?

Core Insights - Quanta Services, Inc. (PWR) is experiencing significant backlog growth driven by renewable and storage projects as utilities increase investments in flexible and reliable power infrastructure [1][8] - The U.S. power market is evolving, with utilities increasingly relying on renewables and battery storage to manage load growth and enhance grid stability [1][4] Backlog and Demand - As of Q3 2025, PWR's backlog reached a record $39.2 billion, up from $33.96 billion a year earlier, indicating strong demand visibility across end markets [3] - Renewable and storage projects are a significant contributor to this backlog expansion, enhancing the overall project mix while maintaining balance [3][4] - Remaining performance obligations rose to $21 billion, providing insight into future committed work scheduled for execution [3] Market Activity - Renewable and storage activity remained robust in Q3 2025, supported by ongoing utility spending [2] - Renewable projects are progressing from early-stage notices to executable work, while battery storage demand remains firm to balance generation and manage peak loads [2][4] Competitive Landscape - MasTec, Inc. (MTZ) and Fluor Corporation (FLR) are notable competitors in adjacent markets, with MasTec focusing on power delivery and renewable generation, but with a more diversified portfolio that may dilute focus [5] - Fluor competes on large-scale EPC projects but carries higher execution risk and less self-performed craft labor, which may limit its ability to provide end-to-end certainty compared to PWR's integrated model [6] Financial Performance - PWR's shares have gained 8.7% in the past six months, outperforming the Zacks Engineering - R and D Services industry's growth of 2.1% [7] - The company trades at a forward 12-month price-to-earnings ratio of 33.25X, higher than the industry's 23.77X [10] - Earnings estimates for 2026 have increased, indicating expected earnings growth of 16.9% year over year on projected revenue growth of 11% [11]