Street Calls of the Week
Investing.com - Mizuho initiated coverage on Primoris Services Corporation (NYSE:PRIM) with a Neutral rating and a price target of $112.00 on Thursday. The $6.27 billion market cap company has demonstrated impressive momentum, with a 51% gain year-to-date according to InvestingPro data.
The research firm acknowledged Primoris’s operational discipline, noting the company has increased gross margins to meet its 10-12% Analyst Day targets a year ahead of schedule through focused project selection and execution. Current gross margins stand at 11.34%, while revenue growth remains robust at 15.08% over the last twelve months.
Mizuho highlighted Primoris’s impressive cash flow conversion, which reached 100% of its last twelve months’ adjusted EBITDA into free cash flow, significantly exceeding management’s target of 50-60%. This translates to an attractive 8% free cash flow yield, as revealed by InvestingPro’s detailed financial analysis, which shows the company maintains GREAT overall financial health.
The firm expressed concerns about Primoris’s divestiture of less profitable units, which has negatively impacted revenues without showing an outsized positive effect on growth in more profitable sectors.
Despite the company’s efforts to cut underperforming business lines, Mizuho observed that Primoris’s margins remain below the group average of approximately 13%.
In other recent news, Primoris Services Corporation reported strong financial results for the second quarter of 2025. The company achieved earnings per share of $1.68, which surpassed expectations by 55.56%, and revenue of $1.9 billion, exceeding forecasts by 11.83%. These results have led to increased confidence among investors. Following these impressive results, Primoris raised its 2025 targets, prompting analysts to adjust their outlooks. KeyBanc raised its price target for Primoris Services to $129 from $119, maintaining an Overweight rating. Similarly, Guggenheim increased its price target to $130 from $110, while keeping a Buy rating on the stock. These recent developments underscore the company’s strong performance and positive outlook from analysts.
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