Primoris Services Corp (PRIM) stock analysis

P/E above its 5-year median

Primoris Services's P/E of 40.8 is above its own 5-year median of 18.2.

P/E above the industry

Primoris Services's P/E of 40.8 is above the Heavy Construction Other Than Building Construction Contractors median of 28.1.

EV/EBITDA above its 5-year median

Primoris Services's EV/EBITDA of 15.8 is above its 5-year median of 8.9.

P/B below the industry

Primoris Services's price-to-book of 2.50 is below the Heavy Construction Other Than Building Construction Contractors median of 3.33.

Trading above fair value

The share price of $72.22 is above our fair value estimate of $48.52.

Margin of safety under 20%

The price is 48.8% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 19.7% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 26.7% a year over the last three fiscal years.

Earnings growth not accelerating

Net income grew -65.2% over the last twelve months, against a 5-year average of 21.2% a year.

Growing slower than the industry

Revenue grew -5.4% over the last twelve months; the Heavy Construction Other Than Building Construction Contractors median is 16.4%.

Guidance lowered

Primoris Services lowered its full year 2026 Interest expense, net outlook on Nov 3, 2026.

Gross margin slipping

Gross margin was 8.5% over the last twelve months, against 11.0% a year earlier.

Return on equity under 15%

Return on equity was 6.0% over the last twelve months and averaged 13.7% over five years; we look for 15% on both.

Return on capital under 10%

Return on invested capital was 6.3%, below the 10% that usually covers the cost of capital.

Return on equity below the industry

Primoris Services's return on equity of 6.0% is below the Heavy Construction Other Than Building Construction Contractors median of 12.7%.

Earnings grew over 5 years

Net income grew 21.2% a year on average over the last five fiscal years.

Net margin below its 5-year average

Net margin was 1.4% over the last twelve months, against a 5-year average of 3.0%.

Net margin below the industry

Primoris Services's net margin of 1.4% is below the Heavy Construction Other Than Building Construction Contractors median of 2.6%.

High debt

Debt is 50.4% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 44.3% five years ago to 50.4%.

Debt not well covered by cash flow

Operating cash flow over the last twelve months equals 19.4% of total debt; we look for at least 20%.

Interest coverage

Interest expense is not reported separately.

Short-term assets cover short-term debts

Current assets are 1.14 times current liabilities.

Bankruptcy risk in the grey zone

The Altman Z-score is 2.90; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Primoris Services paid dividends worth 0.4% of the share price over the last twelve months.

Yield below Treasuries

The 0.4% yield is below the 4.4% on a 1-year Treasury.

Yield below the top quarter

The top quarter of US dividend payers yield 3.8% or more; Primoris Services yields 0.4%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 10 fiscal years.

Covered by earnings

Dividends take 18.1% of net income.

Covered by free cash flow

Dividends take 46.2% of free cash flow.