QUANTA SERVICES INC (PWR) Stock Fundamental Analysis
NYSE:PWR - New York Stock Exchange, Inc. - US74762E1029 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to PWR. PWR was compared to 52 industry peers in the Construction & Engineering industry. While PWR has a great profitability rating, there are some minor concerns on its financial health. PWR shows excellent growth, but is valued quite expensive already. With these ratings, PWR could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
PWR had positive earnings in the past year.
In the past year PWR had a positive cash flow from operations.
PWR had positive earnings in each of the past 5 years.
PWR had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
Looking at the Return On Assets, with a value of 4.86%, PWR is in the better half of the industry, outperforming 65.38% of the companies in the same industry.
The Return On Equity of PWR (12.48%) is better than 65.38% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.07%, PWR is in the better half of the industry, outperforming 67.31% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for PWR is significantly below the industry average of 16.67%.
The last Return On Invested Capital (8.07%) for PWR is above the 3 year average (7.28%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.86% | ||
| ROE | 12.48% | ||
| ROIC | 8.07% |
ROA(3y)4.36%
ROA(5y)4.43%
ROE(3y)11.12%
ROE(5y)10.62%
ROIC(3y)7.28%
ROIC(5y)6.8%
1.3 Margins
PWR's Profit Margin of 3.74% is fine compared to the rest of the industry. PWR outperforms 65.38% of its industry peers.
PWR's Profit Margin has improved in the last couple of years.
PWR's Operating Margin of 5.54% is in line compared to the rest of the industry. PWR outperforms 57.69% of its industry peers.
In the last couple of years the Operating Margin of PWR has grown nicely.
Looking at the Gross Margin, with a value of 14.96%, PWR is in line with its industry, outperforming 50.00% of the companies in the same industry.
In the last couple of years the Gross Margin of PWR has grown nicely.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 5.54% | ||
| PM (TTM) | 3.74% | ||
| GM | 14.96% |
OM growth 3Y4.36%
OM growth 5Y3.12%
PM growth 3Y0.69%
PM growth 5Y2.86%
GM growth 3Y-0.48%
GM growth 5Y2.34%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is below the Cost of Capital (WACC), so PWR is destroying value.
Compared to 1 year ago, PWR has more shares outstanding
PWR has more shares outstanding than it did 5 years ago.
Compared to 1 year ago, PWR has an improved debt to assets ratio.
2.2 Solvency
An Altman-Z score of 5.02 indicates that PWR is not in any danger for bankruptcy at the moment.
With a decent Altman-Z score value of 5.02, PWR is doing good in the industry, outperforming 71.15% of the companies in the same industry.
The Debt to FCF ratio of PWR is 3.10, which is a good value as it means it would take PWR, 3.10 years of fcf income to pay off all of its debts.
PWR's Debt to FCF ratio of 3.10 is fine compared to the rest of the industry. PWR outperforms 69.23% of its industry peers.
A Debt/Equity ratio of 0.58 indicates that PWR is somewhat dependend on debt financing.
PWR has a Debt to Equity ratio (0.58) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 3.1 | ||
| Altman-Z | 5.02 |
ROIC/WACC0.8
WACC10.08%
2.3 Liquidity
A Current Ratio of 1.31 indicates that PWR should not have too much problems paying its short term obligations.
PWR has a Current ratio (1.31) which is in line with its industry peers.
PWR has a Quick Ratio of 1.26. This is a normal value and indicates that PWR is financially healthy and should not expect problems in meeting its short term obligations.
With a Quick ratio value of 1.26, PWR perfoms like the industry average, outperforming 57.69% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.26 |
3. Growth
3.1 Past
PWR shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 27.25%, which is quite impressive.
PWR shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 18.25% yearly.
Looking at the last year, PWR shows a quite strong growth in Revenue. The Revenue has grown by 15.77% in the last year.
The Revenue has been growing by 14.34% on average over the past years. This is quite good.
EPS 1Y (TTM)27.25%
EPS 3Y22.25%
EPS 5Y18.25%
EPS Q2Q%26.24%
Revenue 1Y (TTM)15.77%
Revenue growth 3Y22.18%
Revenue growth 5Y14.34%
Sales Q2Q%23.88%
3.2 Future
The Earnings Per Share is expected to grow by 14.68% on average over the next years. This is quite good.
Based on estimates for the next years, PWR will show a quite strong growth in Revenue. The Revenue will grow by 11.53% on average per year.
EPS Next Y16.54%
EPS Next 2Y15.38%
EPS Next 3Y16.21%
EPS Next 5Y14.68%
Revenue Next Year13.78%
Revenue Next 2Y11.53%
Revenue Next 3Y12.02%
Revenue Next 5Y11.53%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
PWR is valuated quite expensively with a Price/Earnings ratio of 41.38.
The rest of the industry has a similar Price/Earnings ratio as PWR.
The average S&P500 Price/Earnings ratio is at 27.45. PWR is valued rather expensively when compared to this.
Based on the Price/Forward Earnings ratio of 32.37, the valuation of PWR can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as PWR.
PWR's Price/Forward Earnings ratio indicates a valuation a bit more expensive than the S&P500 average which is at 21.90.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.38 | ||
| Fwd PE | 32.37 |
4.2 Price Multiples
PWR's Enterprise Value to EBITDA ratio is in line with the industry average.
PWR's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.01 | ||
| EV/EBITDA | 28.3 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates PWR does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of PWR may justify a higher PE ratio.
PWR's earnings are expected to grow with 16.21% in the coming years. This may justify a more expensive valuation.
PEG (NY)2.5
PEG (5Y)2.27
EPS Next 2Y15.38%
EPS Next 3Y16.21%
5. Dividend
5.1 Amount
With a yearly dividend of 0.10%, PWR is not a good candidate for dividend investing.
Compared to an average industry Dividend Yield of 1.70, PWR pays a bit more dividend than its industry peers.
Compared to an average S&P500 Dividend Yield of 2.38, PWR's dividend is way lower than the S&P500 average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
5.2 History
On average, the dividend of PWR grows each year by 17.70%, which is quite nice.
PWR has been paying a dividend for over 5 years, so it has already some track record.
Dividend Growth(5Y)17.7%
Div Incr Years0
Div Non Decr Years0
5.3 Sustainability
PWR pays out 6.01% of its income as dividend. This is a sustainable payout ratio.
The dividend of PWR is growing, but the earnings are growing slower. This means the dividend growth is not sustainable.
DP6.01%
EPS Next 2Y15.38%
EPS Next 3Y16.21%
386.51
+13.1 (+3.51%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryConstruction & Engineering
Earnings (Last)
Earnings (Next)
Inst Owners94.59%
Inst Owner Change-0.85%
Ins Owners0.61%
Ins Owner Change4.47%
Market Cap57.28B
Analysts80
Price Target363.48 (-5.96%)
Short Float %3.05%
Short Ratio3.65
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0.1% |
Yearly Dividend0.37
Dividend Growth(5Y)17.7%
DP6.01%
Div Incr Years0
Div Non Decr Years0
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)8.25%
Min EPS beat(2)5.43%
Max EPS beat(2)11.07%
EPS beat(4)3
Avg EPS beat(4)3.99%
Min EPS beat(4)-0.66%
Max EPS beat(4)11.07%
EPS beat(8)6
Avg EPS beat(8)3.9%
EPS beat(12)9
Avg EPS beat(12)3.6%
EPS beat(16)13
Avg EPS beat(16)4.02%
Revenue beat(2)1
Avg Revenue beat(2)1.69%
Min Revenue beat(2)-1.87%
Max Revenue beat(2)5.24%
Revenue beat(4)2
Avg Revenue beat(4)0.47%
Min Revenue beat(4)-2.09%
Max Revenue beat(4)5.24%
Revenue beat(8)6
Avg Revenue beat(8)3.17%
Revenue beat(12)10
Avg Revenue beat(12)3.27%
Revenue beat(16)12
Avg Revenue beat(16)3.21%
PT rev (1m)3.11%
PT rev (3m)2.57%
EPS NQ rev (1m)0.17%
EPS NQ rev (3m)-1.63%
EPS NY rev (1m)-0.07%
EPS NY rev (3m)1.52%
Revenue NQ rev (1m)-0.15%
Revenue NQ rev (3m)-0.33%
Revenue NY rev (1m)0.03%
Revenue NY rev (3m)0.46%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 41.38 | ||
| Fwd PE | 32.37 | ||
| P/S | 2.3 | ||
| P/FCF | 40.01 | ||
| P/OCF | 27.45 | ||
| P/B | 7.68 | ||
| P/tB | N/A | ||
| EV/EBITDA | 28.3 |
EPS(TTM)9.34
EY2.42%
EPS(NY)11.94
Fwd EY3.09%
FCF(TTM)9.66
FCFY2.5%
OCF(TTM)14.08
OCFY3.64%
SpS167.84
BVpS50.31
TBVpS-0.42
PEG (NY)2.5
PEG (5Y)2.27
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 4.86% | ||
| ROE | 12.48% | ||
| ROCE | 10.49% | ||
| ROIC | 8.07% | ||
| ROICexc | 8.4% | ||
| ROICexgc | 20.77% | ||
| OM | 5.54% | ||
| PM (TTM) | 3.74% | ||
| GM | 14.96% | ||
| FCFM | 5.76% |
ROA(3y)4.36%
ROA(5y)4.43%
ROE(3y)11.12%
ROE(5y)10.62%
ROIC(3y)7.28%
ROIC(5y)6.8%
ROICexc(3y)7.87%
ROICexc(5y)7.25%
ROICexgc(3y)18.13%
ROICexgc(5y)15.89%
ROCE(3y)9.46%
ROCE(5y)8.84%
ROICexcg growth 3Y19.69%
ROICexcg growth 5Y10.82%
ROICexc growth 3Y17.18%
ROICexc growth 5Y2.48%
OM growth 3Y4.36%
OM growth 5Y3.12%
PM growth 3Y0.69%
PM growth 5Y2.86%
GM growth 3Y-0.48%
GM growth 5Y2.34%
F-Score4
Asset Turnover1.3
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.58 | ||
| Debt/FCF | 3.1 | ||
| Debt/EBITDA | 2.02 | ||
| Cap/Depr | 83.54% | ||
| Cap/Sales | 2.63% | ||
| Interest Coverage | 7.06 | ||
| Cash Conversion | 96.47% | ||
| Profit Quality | 153.84% | ||
| Current Ratio | 1.31 | ||
| Quick Ratio | 1.26 | ||
| Altman-Z | 5.02 |
F-Score4
WACC10.08%
ROIC/WACC0.8
Cap/Depr(3y)73.31%
Cap/Depr(5y)79.62%
Cap/Sales(3y)2.39%
Cap/Sales(5y)2.5%
Profit Quality(3y)152.78%
Profit Quality(5y)138.11%
High Growth Momentum
Growth
EPS 1Y (TTM)27.25%
EPS 3Y22.25%
EPS 5Y18.25%
EPS Q2Q%26.24%
EPS Next Y16.54%
EPS Next 2Y15.38%
EPS Next 3Y16.21%
EPS Next 5Y14.68%
Revenue 1Y (TTM)15.77%
Revenue growth 3Y22.18%
Revenue growth 5Y14.34%
Sales Q2Q%23.88%
Revenue Next Year13.78%
Revenue Next 2Y11.53%
Revenue Next 3Y12.02%
Revenue Next 5Y11.53%
EBIT growth 1Y23.89%
EBIT growth 3Y27.5%
EBIT growth 5Y17.91%
EBIT Next Year104.6%
EBIT Next 3Y36.36%
EBIT Next 5Y26.97%
FCF growth 1Y109.22%
FCF growth 3Y96.17%
FCF growth 5Y41.08%
OCF growth 1Y92.54%
OCF growth 3Y52.89%
OCF growth 5Y31.64%