Primoris Services Corporation (PRIM): what the price assumes

In the published model solve dated 2026-Q2, anchored at $83.42, Primoris Services Corporation (PRIM) is priced for +6.6% growth. 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 2026-06-28.

Generated: 2026-08-10 · Exported: 2026-08-12 · Source: https://boothcheck.com/report/PRIM

Headline

FieldValue
TickerPRIM
CompanyPrimoris Services Corporation
Current price$83.42/sh
CompositionUtilities 36% / Energy 66% / Intersegment eliminations -2%

What The Price Assumes (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin (value-band context)0.8%
Operating margin today4.9%
Margin compression (value-band)-4.1pp
Implied growth6.6%
Multiple paid14x operating income

The operating-margin figure is value-band context at year 7: 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 with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~5.9pp.

How unusual the bet is: within-range

ReferenceValue
vs own history-0.50σ
cohort percentile (of 221 peers)16
implied end-window share0%

Valuation X-Ray

The price is justified by relative-multiple and growth-DCF; earnings-power land below the price.

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.

FamilyMedian price/FVModelsReads
Asset1.43x4expensive
Earnings2.13x5expensive
Relative0.92x2justifies
Growth1.02x3expensive

Families that justify the price: Relative, Growth Families that call it expensive: Earnings

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.4%); the inversion above states its own rate.

Per-Model Detail (n=14)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$82.141.02xyesFCF base $0.2B, growth 14% (input: historical growth), terminal g 4.0%, WACC 8.4%, 6yr projection
DCF Exit MultipleGrowth$100.280.83xyesExit EV/EBITDA: 9.3x / 11.3x / 13.3x (bear / base = today's held flat / bull), 6yr
Relative ValuationRelativenoP/E 18x (static sector reference · 2026-04), scenarios: 14.9x / 18.0x / 21.1x (bear / base = reference held flat / bull), EV/EBITDA 12x
Simple DDMGrowthno
Two-Stage DDMGrowthno
Simple Excess ReturnAsset$48.941.70xyesBV/sh $30.73, ROE (TTM) 14.7%, ke 9.3%
Two-Stage Excess ReturnAsset$61.061.37xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$77.531.08xyesRev $7.5B, growth 14% (input: historical growth; tapered), Terminal P/S: 0.5x / 0.6x / 0.7x (bear / base = today's held flat / bull, cap 8x)
Peter Lynch Fair ValueRelative$75.341.11xyesEPS $4.54, growth 17% (input: historical EPS growth), PEG=1.11 (Fair)
Margin TrajectoryGrowthno
Earnings Power ValueEarnings$39.202.13xyesNormalized EBIT (5y avg op income, one-time charges added back) $0.27B × (1−13%) / WACC 8.4% → EPV (no growth)
Residual IncomeAsset$62.771.33xyesBV $30.73 + 5yr PV of (ROE (TTM) 14.7% − Kₑ 9.3%) × BV; BV grows 8.8%/yr
Graham NumberAsset$56.031.49xyes√(22.5 × EPS $4.54 × BVPS $30.73) — Graham's conservative floor
EV/EBITDA RelativeRelativenoEBITDA $0.46B × sector EV/EBITDA 12.0x
FCF YieldEarnings$21.073.96xyesFCF $164.5M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$16.475.06xyesSBC-adj FCF $0.14B (FCF $0.16B − SBC $0.02B) capitalized at Kₑ
Ben Graham FormulaEarnings$146.490.57xyesEPS $4.54 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$3.3924.61xyesBV $30.73 × (ROIC 0.9% / WACC 8.4%) (excluded from median)
P/Sales SectorRelativenoRevenue $7.49B × sector P/S 2.5x
PEG Fair ValueRelative$113.010.74xyesEPS $4.54 × (PEG 1.5 × growth 16.6% (input: historical EPS growth)) → PE 24.9x
Earnings YieldEarnings$49.081.70xyesEPS $4.54 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelativeno
Clinical Phase NPVGrowthno
MertonAssetno
V5 Mechanicalno

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.

UnitRoleValuation basisRevenueReported profitValue evidenceStatus
Utilitiesoperatingenterprise$2.4b$207.0m operating-incomewithheldunresolved no unit value
Energyoperatingenterprise$3.3b$381.0m operating-incomewithheldunresolved no unit value

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

FieldValue
Net debt$92.0m
Net debt / NOPAT (after-tax)0.29x
Net debt / operating income (pre-tax)0.25x
Share count CAGR (dilution)0.7%
Burning cashno

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

Bullet Takeaways

Bull Case

The clearest way to see Primoris is through where the price sits against the methods. Only the earnings-power and free-cash-flow methods read the price as expensive, and those are depressed by a specific, identifiable problem rather than a structural one. That spread, where the forward and peer frames reach above the price, says the market is paying a discount for a business whose long-run economics are better than its current quarter.

The franchise sits in the right place. Primoris builds and maintains the infrastructure of the energy transition and the grid, with a Utilities segment, power delivery, gas, and communications, that grew 12.3% in the first quarter, and an Energy segment exposed to industrial, renewables, and increasingly data center work via the PayneCrest Electric acquisition completed in May. The total backlog near $11.6 billion gives multi-year visibility, and the filing details how that backlog converts through fixed contracts and master service agreements (FY2025 10-K). The implied bar in the premium Utilities segment, about 18% operating growth, is high but within range for a business riding electrification demand.

The balance sheet is the quiet strength that lets Primoris play offense. Net debt is only about 0.25 times operating income, an unusually low level for a contractor, so the company can fund organic growth, pursue bolt-on acquisitions like PayneCrest to deepen its data center and industrial presence, and weather a rough quarter without strain. With a backlog that provides visibility, a conservative balance sheet, and a discounted price relative to the forward methods, the bull case is that the current solar-driven setback is transitory and the underlying infrastructure demand carries the company past it.

Bear Case

The uncomfortable observation a holder has to confront is that this is a fixed-price contractor that just lost control of the cost on a cluster of projects, and that is the recurring nightmare of the construction business. Primoris cut its full-year guidance hard, with adjusted EBITDA and EPS slashed well below the levels it had guided only weeks earlier, driven by cost overruns on six solar projects with evolving cost-to-complete estimates. The first quarter already showed the damage: net income fell to $17.4 million from $44.2 million a year earlier and adjusted EBITDA dropped to $60.5 million from $99.1 million, on execution issues, labor challenges, project redesigns, and weather. The numbers are the evidence; the qualitative truth is that a contractor's edge is estimating and managing project cost, and Primoris just demonstrated it can miss badly.

The structural risk is the fixed-price model itself. When Primoris bids a project, it bears the cost overrun if execution slips, and the filing flags the exposure through "unapproved change orders" and claims for which "customers have not agreed to both scope and price" (FY2025 10-K). Contracts can also be cancelled on short notice (FY2025 10-K), so backlog is not guaranteed revenue. The solar overruns are a vivid reminder that a single mis-bid program can erase a year of segment profit, and the earnings-power and free-cash-flow methods reading the price as expensive reflect exactly that fragility in the cash the business actually converts.

The competitive and cyclical context compounds it. Primoris competes on "price, reputation for quality, safety, schedule certainty" (FY2025 10-K) against larger peers like Quanta and MasTec, and the renewables end market that caused the trouble is sensitive to policy, tax-credit timing, and pull-forward demand that can leave a hole afterward. Analysts have responded, with Goldman cutting its target into the low $100s and Cantor cutting on project concerns. If the cost overruns prove deeper than disclosed, or if the Energy segment stays soft, the price that looks cheap against the forward methods is cheap for a reason the next quarter could confirm.

Valuation

Because Primoris is multi-segment, the inversion isolates the segment carrying the priced-in premium, Utilities, and asks what operating growth the price implies for it. The answer is about 18.1% per year for five years at a 9.9% cost of capital, a demanding but not impossible bar for a power-delivery business riding electrification; historically about 40% of comparable fast-growers sustained that pace for five years. The sensitivity is meaningful, with each one-point move in the cost of capital shifting the implied growth by about 7.5 points.

Across the whole company the methods mostly sit above the $101.22 price. The relative-multiple and growth-DCF families land in the $90s to $120s, the asset-based methods are mixed, and a reasonable-growth re-pricing puts the base near $126 with a range to about $148. The exceptions are the earnings-power and free-cash-flow methods, which read the price as expensive because they capitalize the depressed, overrun-affected cash. That split is the whole story: the forward and peer frames see a discounted infrastructure contractor, while the cash-based frames see the damage from the solar projects.

The honest conclusion is that the price embeds a real reset already, sitting below most forward methods, but the cash-based methods are flashing that the current earnings power is impaired. If the solar overruns are contained and the backlog converts at normal margins, the stock is cheap relative to its forward potential. If the execution problems recur, the price is fair on impaired cash. The conservative balance sheet limits the downside, but the central question is whether management has regained control of project cost.

Catalysts

The dominant near-term catalyst is the resolution of the solar project cost overruns. Primoris cut its full-year 2026 guidance sharply, with adjusted EBITDA and EPS lowered well below prior expectations, on cost overruns across six solar projects with evolving cost-to-complete estimates and reduced solar revenue after pull-forward in 2025. Evidence that those projects are stabilizing, and that the overruns are contained rather than spreading, is the single most important signal for the stock. The first quarter showed the impact, with net income of $17.4 million and adjusted EBITDA of $60.5 million, both down sharply year over year.

The backlog and Utilities growth are the offsetting positives. Total backlog stood near $11.6 billion, Utilities segment revenue grew 12.3% to $632.9 million on power-delivery demand, and the May acquisition of PayneCrest Electric expands the company's reach into high-growth data center and industrial electrical work. Conversion of that backlog at normal margins, and bookings momentum in Utilities and Energy, are the medium-term drivers.

The risks to watch are further project surprises, the policy-sensitive renewables end market, and labor availability. Analyst sentiment has turned more cautious, with Goldman moving to Neutral and a $102 target and Cantor cutting on project concerns, though the median target across the broader group remains well above the current price, reflecting the gap between the near-term damage and the long-run infrastructure opportunity. Primoris pays a modest dividend, and its low leverage gives it flexibility through the setback.

Sources:

Peer Cohorts (Per Segment, With Filing Citations)

Utilities (reported)

Energy (reported)

Methodology Note

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.

View the full interactive PRIM report on boothcheck