Primoris Services Corporation (NYSE:PRIM) Analysts Are Pretty Bullish On The Stock After Recent Results
Primoris Services Corporation (NYSE:PRIM) came out with its yearly results last week, and we wanted to see how the business is performing and what industry forecasters think of the company following this report. Primoris Services reported in line with analyst predictions, delivering revenues of US$5.7b and statutory earnings per share of US$2.33, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.
View our latest analysis for Primoris Services
After the latest results, the five analysts covering Primoris Services are now predicting revenues of US$6.08b in 2024. If met, this would reflect a reasonable 6.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to grow 14% to US$2.70. Before this earnings report, the analysts had been forecasting revenues of US$6.20b and earnings per share (EPS) of US$2.83 in 2024. So it looks like there's been a small decline in overall sentiment after the recent results - there's been no major change to revenue estimates, but the analysts did make a small dip in their earnings per share forecasts.
Althoughthe analysts have revised their earnings forecasts for next year, they've also lifted the consensus price target 13% to US$43.80, suggesting the revised estimates are not indicative of a weaker long-term future for the business. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. There are some variant perceptions on Primoris Services, with the most bullish analyst valuing it at US$47.00 and the most bearish at US$38.00 per share. With such a narrow range of valuations, the analysts apparently share similar views on what they think the business is worth.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's pretty clear that there is an expectation that Primoris Services' revenue growth will slow down substantially, with revenues to the end of 2024 expected to display 6.4% growth on an annualised basis. This is compared to a historical growth rate of 12% over the past five years. Compare this to the 53 other companies in this industry with analyst coverage, which are forecast to grow their revenue at 7.7% per year. Factoring in the forecast slowdown in growth, it looks like Primoris Services is forecast to grow at about the same rate as the wider industry.
The Bottom Line
The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Happily, there were no real changes to revenue forecasts, with the business still expected to grow in line with the overall industry. There was also a nice increase in the price target, with the analysts clearly feeling that the intrinsic value of the business is improving.
Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. We have estimates - from multiple Primoris Services analysts - going out to 2026, and you can see them free on our platform here.
You still need to take note of risks, for example - Primoris Services has 2 warning signs we think you should be aware of.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
