Primoris Services (PRIM) Stock Forecast & Price Target

Primoris Services Corp experienced a substantial revenue increase of 20.9% to $1.891 billion, driven primarily by a notable 27.0% growth in its Energy segment and a solid 11.6% rise in the Utilities segment. The company also achieved a consolidated gross margin expansion to 12.3%, reflecting significant improvements in the Utilities gross margin, which increased to 14.1% from 10.3%. Notably, the renewables sector, representing approximately 50% of Energy revenue, is projected to grow rapidly, with expectations of reaching around $2.5 billion in revenue by 2025, underscoring a robust outlook for both current operations and future growth.

Primoris Services Corp has seen significant downward pressure on its stock primarily due to weaker bookings and backlog in the Energy segment, highlighting a concerning trend of slower award conversions. The company is also facing reduced gross margins, particularly stemming from a 66% decrease in high-margin storm response projects, while expectations for Utilities margins are projected to decline sequentially from 14% to approximately 11%. Additionally, a substantial year-over-year drop in total bookings, especially a dramatic 72% decrease in the Energy segment, underscores the potential for continued financial challenges amid macroeconomic headwinds in the solar and utility sectors.