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On Tuesday, Primoris Services Corporation (NYSE:PRIM), with a market capitalization of $3.78 billion, maintained its Buy rating and $85.00 price target according to DA Davidson. The firm’s analysis highlighted the company’s impressive fourth-quarter financial performance, underpinned by robust cash flow and profit margins. According to InvestingPro data, analysts’ price targets range from $78 to $102, reflecting strong confidence in the company’s growth potential. Primoris Services reported an adjusted earnings per share (EPS) of $1.13, surpassing both DA Davidson’s estimate of $0.75 and the consensus figure. The company’s adjusted EBITDA reached $116.6 million, exceeding the analyst’s projection of $92.7 million and the consensus of $93.1 million.
Year-over-year growth was notable in gross profit (GP) and EBIT, which increased by 18% and 17%, respectively. Revenue also outperformed expectations, climbing 15% to $1.7 billion against forecasts of $1.5 billion by DA Davidson and $1.6 billion consensus. This performance aligns with the company’s impressive 11.4% revenue growth over the last twelve months, as reported by InvestingPro. A particularly strong cash flow was observed, with operating cash flow (OCF) of $298.3 million and free cash flow (FCF) of $270.0 million, significantly surpassing the estimates and the previous year’s results.
Primoris Services demonstrated prudent financial management by reducing its debt by $168.9 million, leading to a gross debt to trailing twelve months (TTM) EBITDA ratio of 1.7x. This prudent approach has contributed to the company’s GOOD financial health score according to InvestingPro, which offers comprehensive analysis of over 1,400 US stocks through its detailed Pro Research Reports. The total backlog of projects expanded by 9% to $11.9 billion, representing a growth of 5% quarter-over-quarter and 9% year-over-year, with a book-to-bill (BTB) ratio of 1.3x.
The Utilities segment of the business saw a 15% year-over-year increase in revenue, with gross margins (GM) improving by 470 basis points to 12.1%. This improvement was attributed to contributions from all areas of operation, including gas, communications, and power. The Energy segment also experienced a revenue increase of 16% year-over-year, although gross margins declined by 250 basis points to 9.5%. The report noted an uptick in renewables and solar projects, with a BTB ratio of 1.4x, although gross profit and margins appeared to be lower due to fewer project closeouts compared to the previous year.
In other recent news, Primoris Services Corporation reported impressive financial results for the fourth quarter of 2024, with earnings per share (EPS) reaching $1.13, significantly exceeding the forecast of $0.75. The company also achieved a 15% year-over-year revenue increase, totaling $1.7 billion. Primoris’s record operating cash flow of $508 million further underscores its strong performance. Additionally, the company has provided guidance for 2025, expecting EPS between $3.70 and $3.90, with adjusted EPS projected at $4.20 to $4.40. The company anticipates continued growth in its communications and power delivery sectors, with a focus on margin improvement and strategic expansion in renewable energy. In terms of analyst activity, there were no upgrades or downgrades reported in the recent announcements. These developments reflect Primoris’s ongoing strategic growth initiatives and robust financial health.
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