Quanta Services, Inc. (PWR) stock analysis

P/E above its 5-year median

Quanta Services's P/E of 55.1 is above its own 5-year median of 51.7.

P/E above the industry

Quanta Services's P/E of 55.1 is above the Construction Special Trade Contractors median of 25.1.

EV/EBITDA above its 5-year median

Quanta Services's EV/EBITDA of 37.9 is above its 5-year median of 35.4.

P/B above the industry

Quanta Services's price-to-book of 8.69 is above the Construction Special Trade Contractors median of 3.14.

Trading above fair value

The share price of $607.94 is above our fair value estimate of $392.17.

Margin of safety under 20%

The price is 55.0% above fair value, so there is no margin of safety.

Revenue growing 10%+ a year

Revenue grew 18.6% a year over the last three fiscal years.

EPS growing 10%+ a year

Diluted EPS grew 27.0% a year over the last three fiscal years.

Earnings growth accelerating

Net income grew 65.2% over the last twelve months, against a 5-year average of 18.2% a year.

Growing faster than the industry

Revenue grew 37.1% over the last twelve months; the Construction Special Trade Contractors median is 10.2%.

Guidance raised

Quanta Services raised its full year ending December 31, 2026 net cash provided by operating activities outlook on Oct 29, 2026.

Gross margin improving

Gross margin was 15.8% over the last twelve months, against 15.2% a year earlier.

Return on equity under 15%

Return on equity was 17.8% over the last twelve months and averaged 11.7% over five years; we look for 15% on both.

Return on capital over 10%

Return on invested capital was 13.6%, above the 10% that usually covers the cost of capital.

Return on equity above the industry

Quanta Services's return on equity of 17.8% is above the Construction Special Trade Contractors median of -1.8%.

Earnings grew over 5 years

Net income grew 18.2% a year on average over the last five fiscal years.

Net margin above its 5-year average

Net margin was 4.5% over the last twelve months, against a 5-year average of 3.5%.

Net margin above the industry

Quanta Services's net margin of 4.5% is above the Construction Special Trade Contractors median of -7.4%.

High debt

Debt is 66.4% of shareholders' equity, above the 40% we consider low.

Debt rising against equity

Debt to equity rose from 27.4% five years ago to 66.4%.

Debt covered by cash flow

Operating cash flow over the last twelve months equals 58.2% of total debt.

Interest well covered

Operating income covers interest expense 8.3 times.

Short-term assets cover short-term debts

Current assets are 1.16 times current liabilities.

Low bankruptcy risk

The Altman Z-score is 4.30; above 3 is the safe zone and below 1.8 the distress zone.

Pays a dividend

Quanta Services paid dividends worth 0.1% of the share price over the last twelve months.

Yield below Treasuries

The 0.1% 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; Quanta Services yields 0.1%.

Dividend not cut

The dividend per share has not fallen by more than 10% in any of the last 9 fiscal years.

Covered by earnings

Dividends take 3.9% of net income.

Covered by free cash flow

Dividends take 2.1% of free cash flow.