- Primoris Services Corporation had another strong quarter, fueled by growth in the energy segment and investments in renewable energy and AI-driven utility needs.
- Revenue of $1.563 billion, beating expectations, with a surge in energy segment revenue (increasing by 25%).
- Backlog remains solid at $10.453 billion, and strategic investments position the company well for future growth in the utility space.
- The company will continue to do well even if AI GPU demand slows, making it a strong buy.
Investment Thesis
Primoris Services Corporation (NYSE:PRIM) delivered a strong quarter for Q2 2024, fueled by the consistent incredible growth in their energy segment and investments in emerging trends in renewable energy and AI-driven utility needs that are really starting to pay off. The construction and infrastructure company reported a revenue of $1.563 billion, up 10.6% year-over-year, which surpassed Wall Street expectations by $30 million. This growth was driven by the rise in demand for solar and natural gas projects, but I think there are hints of AI demand here.
The company’s energy segment emerged as a growth driver, with revenue surging by 25% to $973 million, which is attributed to their natural gas generation projects in the western U.S. and a mix of higher-margin renewable work.
Primoris also reported a notable beat on EPS, with a non-GAAP EPS of $1.04. This exceeded analyst expectations by $0.18. The company’s net income for the quarter stood at $49.5 million. This was up from $39 million in the same period last year (strong growth), translating to a diluted EPS of $0.91 to show the company’s capability to capitalize on market dynamics, particularly in the renewables and industrial construction sectors.
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