Centuri Holdings, Inc. (CTRI): what the price assumes

In the published model solve dated 2026-Q2, anchored at $20.54, Centuri Holdings, Inc. (CTRI) is priced for today's economics sustained for ~6.3 years. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-25.

Generated: 2026-09-07 · Exported: 2026-09-09 · Source: https://boothcheck.com/report/CTRI

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 12: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 9.5% cost of capital; growth searched up to the 25% self-funding ceiling.

How unusual the bet is: n/a

Valuation X-Ray

Every valuation family lands below the price. The price therefore sits beyond what those standard frames encode.

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that call it expensive: Asset, Earnings, Relative, Growth

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 7.6%); the inversion above states its own rate.

Per-Model Detail (n=10)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.

Bullet Takeaways

• Roughly 78% of fiscal 2025 revenue came through long-term master service agreements with utilities, and a further 8 points of the bid work came from those same MSA customers, so almost the whole book sits with repeat clients.
• The trailing operating margin of about 1.8% is the central fact: peers doing similar utility work earn roughly three times that, and closing the gap is what the current valuation is actually paying for.
• Second-quarter results are due August 4, 2026, and the number to read is collections, since contract assets rose $164.0 million during fiscal 2025 while reported operating profit was a fraction of that.

Bull Case

Read the earnings line first and you will misjudge this company. Centuri does utility maintenance and construction work at a scale of roughly $3.16 billion in revenue, and it converted that into about $51 million of operating profit over the trailing year. That is a margin of 1.8%, which for a contractor is close to the line where a bad job wipes out a good quarter. But the stage matters. This is a business rebuilding its execution after a stretch of project problems, and the gross line already shows the repair: gross profit rose to 18.6% of revenue in the fiscal year ended December 28, 2025 from 15.8% the year before, an improvement the 10-K attributes to bid margins after "the prior year period was negatively impacted by performance issues on certain" projects.

The revenue underneath is unusually sticky for construction work. The filing is precise about the shape: relationships "are governed by long-term master service agreements ("MSAs"), comprising approximately 78% of our total revenue during fiscal 2025. Additionally, of the remaining 22% of our total revenue that was generated from bid contracts, 8% was generated from existing MSA customers". Put those together and nearly nine tenths of the business comes from customers already in the book. Gas distribution lines have to be inspected, replaced and made safe on a regulator's schedule. That work does not wait for a construction cycle.

Demand from the customers themselves is not in question, and their own filings say so. PWR describes "multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events", and PRIM reports "strong tailwinds in our power delivery business due to increased demand for electricity in the United States". Centuri sells into exactly that budget, on both the gas and electric sides.

The March quarter showed the volume arriving. Non-Union Electric revenue reached $174.6 million, up $37.4 million or 27.3% on the prior year, driven by higher volumes on new and existing MSAs, and the company reported record backlog of $6.5 billion alongside 76% growth in gross profit.

Here is the arithmetic that makes the setup interesting rather than merely cheap. Each additional percentage point of operating margin on this revenue base is worth about $32 million, against roughly $51 million of operating profit in the whole trailing year. PWR earns an operating margin of 5.7% on $30.1 billion of revenue, MYRG earns 5.2%, PRIM 4.9% and GVA 6.3%. None of those is a heroic number. Centuri does not need to become an outstanding contractor for the earnings base to change shape. It needs to become an ordinary one.

Bear Case

Start with the distance between reported profit and cash collected. Total contract assets rose $164.0 million during the fiscal year ended December 28, 2025, a figure that includes "net recovery claims and unapproved change orders". Set that against roughly $51 million of operating profit and about $30.8 million of net income for the trailing year. Growth in a contracting business often looks like this on the way up, and some of it is simply the billing lag the filing describes, where "large MSAs in which customer approval is contractually required before invoices can be issued" slow the process. But unapproved change orders are work performed that the customer has not yet agreed to pay for, and they are recorded as an asset. Free cash flow over the trailing period was not positive. A company that reports profit while its receivable-side assets grow several times faster than that profit is asking to be judged on collections, not on the income statement.

The debt is modest in isolation and unforgiving in combination with thin margins. Net borrowing runs roughly 683 million dollars, about 13.4 times operating profit on a trailing basis. The structure itself is fine: an $800 million term loan running to July 9, 2032, a $400 million revolver to July 9, 2030, and about $150.0 million of equipment term loans, with the company reporting "compliance with all of our financial covenants under the revolving credit facility". What is less comfortable is that the interest margin on the revolver moves with the net leverage ratio. Leverage is measured against earnings, so a weak stretch of project execution raises the cost of the debt at the same time it lowers the profit servicing it.

Backlog is doing more narrative work than it can support. The 10-K says plainly that "Generally, customers are not contractually committed to specific volumes of work under MSAs, and MSAs may be terminated by either party upon notice", and that backlog "tends to fluctuate based on the timing of MSA renewals". A record backlog figure in this business is an estimate of work over the contractual life of agreements that carry no volume commitment. It is a reasonable planning number and a poor promise.

Earnings quality has the same softness in the most recent quarter. Gross profit was "positively impacted by a favorable change in estimated cost to complete on an offshore wind project that is nearing completion". Revising down the expected cost of finishing a job is a legitimate accounting act and also the single easiest lever in percentage-of-completion accounting. When a recovery story leans on estimate revisions, the recovery deserves another quarter of proof.

All of which meets a valuation that has already assumed the repair works. Enterprise value sits at roughly 72 times trailing operating profit, and holding that requires operating income to compound at the 25% ceiling its own returns can fund, sustained for something like fifteen years. Only about 14% of comparable fast growers have held such a pace even ten years, and the multiple sits at the very top of its peer group, well beyond the upper quartile. The bull argument that profitability normalizes toward what PWR, MYRG and PRIM already earn is entirely reasonable. It is also already in the price, several times over.

Valuation

The headline multiple looks impossible until you notice which number is moving. Enterprise value of roughly 3.7 billion dollars against about $51 million of trailing operating profit works out near 72 times, and inverted that demands operating income growing at the 25% ceiling its own returns on capital can finance, held for roughly fifteen years. Read literally, that is an extraordinary bet. Read structurally, it is mostly a statement about the denominator: a 1.8% operating margin on $3.16 billion of revenue is a depressed earnings base, and any multiple struck against a depressed base looks extreme.

That distinction matters because it changes what the buyer is actually underwriting. It is not a bet that this contractor keeps compounding at 25% a year for fifteen years. It is a bet that profitability returns to something like what the rest of the industry earns, and that a full multiple keeps being paid on the way. PWR earns 5.7% while growing 21.1%, MYRG 5.2% while growing 13.1%, PRIM 4.9% while growing 13.4%, and at the top of the range STRL earns 16.9% growing 37.0%. Centuri's 1.8% is the outlier in that group. Its own gross line has already moved to 18.6% of revenue from 15.8% the prior year, so the recovery case is plausible on the evidence so far. The multiple assumes it is close to certain.

The methods spread out accordingly, and none of them reaches the price. The peer-multiple methods come closest, with the price about 2.05 times what they support. The earnings-power methods, which capitalize what the company earns now with no growth credited, sit far below that. Furthest away is the asset-value lens, roughly 10.9 times under the price, and the reason is specific rather than mysterious: book value works out to $8.55 a share while return on equity runs about 3.6%, well under the cost of that equity, so any method that values a company off its book penalizes it for earning less than its capital costs. That is the same 1.8% margin problem wearing a different coat.

Borrowing bounds the downside without threatening it near term. Net debt near 683 million dollars is roughly 13.4 times operating profit measured on the trailing year, which sounds alarming and is really another expression of the depressed denominator. The maturities are long, in 2030 and 2032, and the company reports compliance with its covenants. There is no refinancing cliff to force the issue. What there is instead is a clock: the margin recovery has several years of runway to arrive on its own terms, and the current valuation has already spent them.

Catalysts

Two things landed in July. On the 20th the company announced the acquisition of J.J. White, adding industrial and union electric capability to the existing book. Two days earlier JPMorgan cut its target to 26 dollars from 29 and kept an Underweight rating. The pairing is worth noticing on its own: the operating business is buying capacity while at least one house on the street thinks the equity is ahead of the fundamentals.

The operating news before that ran the other way. First-quarter results on May 7, 2026 carried 76% year-over-year gross profit growth and a record backlog of $6.5 billion. In June the company announced more than $360 million of new customer awards. The filed quarterly detail behind the print shows Non-Union Electric revenue of $174.6 million, an increase of 27.3%, on higher volumes under new and existing MSAs.

Second-quarter results are scheduled for August 4, 2026. The line that matters most is not revenue, which the awards and the backlog have already signalled. It is whether gross margin holds without help from favorable revisions to project cost estimates, and whether the contract-asset balance stops growing faster than profit. Those two together are what would turn a volume recovery into a cash one.

Peer Cohorts (Per Segment, With Filing Citations)

U.S. Gas Utility Services / Union Electric Utility Services (reported)

• PWR (Quanta Services, Inc.)
• FY2025 10-K: …solutions for the electric and gas utility, power generation, large load center, manufacturing, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets. We provide design, engineering, procurement, construction, upgrade and repair and maintenance…
• FY2025 10-K: …piping, fabrication and storage tank services for the midstream and downstream industrial energy markets, as well as specialty cleaning and environmental solutions for the industrial energy and petrochemical markets; • engineering and construction services for pipeline systems, storage systems and compressor and pump…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …Segment We are one of the largest pipeline contractors in North America, with a balanced portfolio of service offerings, including union and non-union services. Our pipeline offerings include construction and maintenance services for pipeline distribution, including for natural gas, water, wastewater and carbon…
• FY2025 10-K: …line maintenance promote environmental and public safety, including methane reduction initiatives, while enhancing the safety, productivity and useful lives of our customers' assets. Our natural gas construction services, which represented $1.6 billion, or 11% of our revenue in 2025, help our customers access and…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …2025-01-01 2025-12-31 0000700923 myrg:MarketTypeElectricalConstructionMember us-gaap:ProductConcentrationRiskMember us-gaap:SalesRevenueNetMember myrg:CommercialAndIndustrialMember 2025-01-01 2025-12-31 0000700923 myrg:CommercialAndIndustrialMember myrg:MarketTypeElectricalConstructionMember 2024-01-01 2024-12-31…
• FY2025 10-K: 12-31 0000700923 myrg:TopTenCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2024-01-01 2024-12-31 0000700923 myrg:TopTenCustomersMember us-gaap:CustomerConcentrationRiskMember us-gaap:RevenueFromContractWithCustomerMember 2023-01-01 2023-12-31 0000700923…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …segment. ​ ​ ● Power Delivery, inspection, maintenance, and replacement of electrical utility infrastructure - We are experiencing strong tailwinds in our power delivery business due to increased demand for electricity in the United States. Electric utilities continue to invest in grid resiliency, modernization,…
• FY2025 10-K: …increased power demand, and the intermittency of renewable power resources, gas powered generation will still be needed, not withstanding some opposition to these traditional generation sources. In addition, the historically low price of natural gas could result in the continued replacement of higher carbon emitting…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …state income tax returns for 2022 and later are open and subject to examination. Additionally, state NOLs may be adjusted by the taxing authorities for the 2013 and later tax years. The Company has an Uncertain Tax Position ("UTP") liability of $ 5,214 and an additional liability related to the UTP for penalties of $…
• FY2025 10-K: …2025-12-31 0000874238 us-gaap:OperatingSegmentsMember strl:EInfrastructureSolutionsSegmentMember 2024-12-31 0000874238 us-gaap:OperatingSegmentsMember strl:TransportationSolutionsSegmentMember 2025-12-31 0000874238 us-gaap:OperatingSegmentsMember strl:TransportationSolutionsSegmentMember 2024-12-31 0000874238…
• GVA (GRANITE CONSTRUCTION INC)
• FY2025 10-K: …2024-01-01 2024-12-31 0000861459 us-gaap:MaterialReconcilingItemsMember 2023-01-01 2023-12-31 0000861459 us-gaap:MaterialReconcilingItemsMember 2025-12-31 0000861459 us-gaap:MaterialReconcilingItemsMember 2024-12-31 Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K x…
• FY2025 10-K: …Granite Construction Incorporated, Roberts Family Companies, Inc., Lehman-Roberts Company, Memphis Stone & Gravel Company, Patrick Nelson, as sellers' representative, and the entities and individuals party thereto [Exhibit 2.1 to the Company's Form 8-K filed on December 5, 2023] 2.2 * Equity Purchase Agreement, dated…

Canadian Utility Services / Non-Union Electric Utility Services (reported)

• PWR (Quanta Services, Inc.)
• FY2025 10-K: …multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events. We have also experienced high demand for new and expanded transmission, substation and distribution infrastructure needed to reliably transport power. In…
• FY2025 10-K: …and energy delivery companies, as well as governmental entities. We have estimated revenues by customer type as a percentage of total revenues below. Such estimates 8 are based on management judgment and assumptions and are provided to show perceived trends in our customer types and should be considered directional…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …wireless and wireline/fiber networks, data center buildout and interconnection, wireless integration and optimization and install-to-the-home services, as well as select utility infrastructure, among others. Our Clean Energy and Infrastructure segment primarily serves energy, utility, government and other end-markets…
• FY2025 10-K: …derive their revenue primarily from the engineering, installation and maintenance of infrastructure, primarily in North America. The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications and digital infrastructure, primarily for wireless…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …of manufacturing, will require significant investment by our customers in both of our reporting segments. Our C&I bidding opportunities remain strong and we believe we will see continued opportunities in the primary markets we serve such as data centers, transportation, health care, manufacturing, clean energy and…
• FY2025 10-K: …processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general…
• PRIM (Primoris Services Corporation)
• FY2025 10-K: …systems. ​ The Energy segment operates throughout the United States and Canada and specializes in a range of services that include engineering, procurement, construction, and maintenance services for entities in the energy, renewable energy and energy storage, renewable fuels, and petroleum and petrochemical…
• FY2025 10-K: …segment. ​ ​ ● Power Delivery, inspection, maintenance, and replacement of electrical utility infrastructure - We are experiencing strong tailwinds in our power delivery business due to increased demand for electricity in the United States. Electric utilities continue to invest in grid resiliency, modernization,…
• DY (DYCOM INDUSTRIES, INC.)
• FY2025 10-K: …for electric and gas utilities. The Company's services are provided by its operating segments on a decentralized basis. Each operating segment consists of a subsidiary (or in certain instances, the combination of two or more subsidiaries), whose results are regularly reviewed by the Company's Chief Executive Officer,…
• FY2025 10-K: …with another utility. In many cases, a customer may terminate an agreement for convenience. Historically, multi-year master service agreements have been awarded primarily through a competitive bidding process; however, occasionally we are able to negotiate extensions to these agreements. We provide the remainder of…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: 32,100 , of which approximately $ 25,800 was for certain RHB operating costs paid on its behalf and approximately $ 6,300 was for undistributed earnings of RHB. The Company collected the entire December 31, 2024 receivable balance in the first quarter of 2025. During the twelve months ended December 31, 2025, the…
• FY2025 10-K: …restrictions of such shares. No preferred shares have been issued. Stock Repurchase Program -On December 5, 2023, the Board of Directors approved a stock repurchase program authorizing the repurchase of up to $ 200,000 of the Company's common stock. Effective November 12, 2025, the Board of Directors authorized a new…
• GVA (GRANITE CONSTRUCTION INC)
• FY2025 10-K: …storage and other power-related projects. The Materials segment focuses on production and delivery of aggregates, asphalt concrete, liquid asphalt and recycled materials for internal use in our construction projects and for sale to third parties. See Note 21 of "Notes to the Consolidated Financial Statements" for…
• FY2025 10-K: …exceeded 10% of total revenue during the year ended December 31, 2025, December 31, 2024, or December 31, 2023. The majority of our receivables are from customers concentrated in the United States. None of our customers had a receivable balance in excess of 10% of our total net receivables as of December 31, 2025 and…
• IESC (IES Holdings, Inc.)
• FY2025 10-K: …periods, to provide more detail about the major product lines significant to our Residential business. Our consolidated revenue for the years ended September 30, 2025, 2024 and 2023 was derived from the following activities. Prior period amounts have been reclassified to conform with the current period presentation,…
• FY2025 10-K: …Residential Infrastructure Solutions Commercial & Industrial Total Fixed-price $ 404,684 $ 1,279,504 $ 210,547 $ 241,159 $ 2,135,894 Time-and-material 196,092 - 6,806 38,435 241,333 Total revenue $ 600,776 $ 1,279,504 $ 217,353 $ 279,594 $ 2,377,227 Accounts Receivable Accounts receivable include amounts which we…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.