Primoris (NYSE:PRIM) Delivers Impressive Q1

Yahoo

05-05-2025

Infrastructure construction company Primoris (NYSE:PRIM) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 16.7% year on year to $1.65 billion. Its non-GAAP profit of $0.98 per share was 49.4% above analysts' consensus estimates.
Is now the time to buy Primoris? Find out in our full research report.
Revenue: $1.65 billion vs analyst estimates of $1.49 billion (16.7% year-on-year growth, 10.6% beat)
Adjusted EPS: $0.98 vs analyst estimates of $0.66 (49.4% beat)
Adjusted EBITDA: $99.41 million vs analyst estimates of $75.55 million (6% margin, 31.6% beat)
Management reiterated its full-year Adjusted EPS guidance of $4.30 at the midpoint
EBITDA guidance for the full year is $450 million at the midpoint, above analyst estimates of $445.4 million
Operating Margin: 4.3%, up from 3.1% in the same quarter last year
Free Cash Flow was $25.58 million, up from -$38.9 million in the same quarter last year
Backlog: $11.4 billion at quarter end
Market Capitalization: $3.57 billion
'Primoris had another great quarter to start 2025, delivering solid execution on our strategy to expand margins and increase cash flow generation,' said David King, Chairman and Interim President and Chief Executive Officer of Primoris.
Listed on the NASDAQ in 2008, Primoris (NYSE:PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
Examining a company's long-term performance can provide clues about its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Thankfully, Primoris's 15.7% annualized revenue growth over the last five years was incredible. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.
We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Primoris's annualized revenue growth of 16.2% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.
This quarter, Primoris reported year-on-year revenue growth of 16.7%, and its $1.65 billion of revenue exceeded Wall Street's estimates by 10.6%.
Looking ahead, sell-side analysts expect revenue to grow 2.6% over the next 12 months, a deceleration versus the last two years. This projection is underwhelming and indicates its products and services will face some demand challenges. At least the company is tracking well in other measures of financial health.
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Primoris was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.8% was weak for an industrials business. This result isn't too surprising given its low gross margin as a starting point.
Analyzing the trend in its profitability, Primoris's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.
This quarter, Primoris generated an operating profit margin of 4.3%, up 1.1 percentage points year on year. The increase was encouraging, and because its operating margin rose more than its gross margin, we can infer it was more efficient with expenses such as marketing, R&D, and administrative overhead.
Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions.
Primoris's EPS grew at an astounding 23.2% compounded annual growth rate over the last five years, higher than its 15.7% annualized revenue growth. However, we take this with a grain of salt because its operating margin didn't expand and it didn't repurchase its shares, meaning the delta came from reduced interest expenses or taxes.
Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.
Primoris's two-year annual EPS growth of 26.7% was fantastic and topped its 16.2% two-year revenue growth.
In Q1, Primoris reported EPS at $0.98, up from $0.47 in the same quarter last year. This print easily cleared analysts' estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Primoris's full-year EPS of $4.37 to grow 2.6%.
We were impressed by how significantly Primoris blew past analysts' revenue, EPS, and EBITDA expectations this quarter. We were also excited its full-year EBITDA guidance topped Wall Street's estimates. Zooming out, we think this quarter featured some important positives. The stock traded up 3.7% to $69.50 immediately after reporting.
Sure, Primoris had a solid quarter, but if we look at the bigger picture, is this stock a buy? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.