Quanta Services, Inc. (PWR): what the price requires

At today's price, Quanta Services, Inc. (PWR) is priced for today's economics sustained for ~15.6 years. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.

Generated: 2026-07-14 · Exported: 2026-07-16 · Source: https://boothcheck.com/report/PWR

Headline

FieldValue
TickerPWR
CompanyQuanta Services, Inc.
Current price$647.65/sh
CompositionUnited States 93% / Canada 4% / Australia 3% / Others 1%

What The Price Requires (Inversion)

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

FieldValue
Inversion basiswhole-company
Operating margin needed6.4%
Operating margin today5.1%
Margin expansion implied+1.3pp
Must persist for15.6y
Multiple paid70x operating income

The operating-margin requirement is derived from the framework's value band at year 7, a separately labeled basis from the headline growth/duration solve.

Solve inputs: computed at a 10.7% cost of capital; growth searched up to the 25% self-funding ceiling; each 1pp moves the implied horizon ~2.4 years.

Reconcile: at the x-ray's 9.3% required return this reads ~12.4 years; the models below use their own rates.

How unusual the bet is: high

ReferenceValue
vs own history+0.48σ
cohort percentile (of 225 peers)96
sustained it ~10 years at this level14%
implied end-window share2%

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

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
Asset7.13x4expensive
Earnings6.48x5expensive
Relative2.66x5expensive
Growth0.75x3justifies

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

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=17)

ModelFamilyFVPrice/FVApplicableMethodology
DCF Perpetual GrowthGrowth$627.141.03xyesFCF base $2.5B, growth 21% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection
DCF Exit MultipleGrowth$877.480.74xyesExit EV/EBITDA: 52.4x / 54.4x / 56.4x (bear / base = today's held flat / bull), 7yr
Relative ValuationRelative$317.372.04xyesP/E 39.35x (blended: static sector reference 18x + trailing (TTM) 89x), scenarios: 31.9x / 39.4x / 46.8x (bear / base = reference held flat / bull), EV/EBITDA 24.72x
Simple DDMGrowth——no—
Two-Stage DDMGrowth——no—
Simple Excess ReturnAsset$78.538.25xyesBV/sh $59.47, ROE (TTM) 12.2%, ke 9.3%
Two-Stage Excess ReturnAsset$89.667.22xyes5yr excess ROE then converge to ke=9.3%
Discounted Future Market CapGrowth$869.230.75xyesRev $30.1B, growth 21% (input: historical growth; tapered), Terminal P/S: 2.6x / 3.3x / 3.9x (bear / base = today's held flat / bull, cap 12x)
Peter Lynch Fair ValueRelative$162.223.99xyesEPS $7.29, growth 22% (input: historical EPS growth), PEG=4.01 (Overvalued)
Margin TrajectoryGrowth——no—
Earnings Power ValueEarnings$81.797.92xyesNormalized EBIT (5y avg op income, one-time charges added back) $1.17B × (1−10%) / WACC 9.2% → EPV (no growth)
Residual IncomeAsset$91.947.04xyesBV $59.47 + 5yr PV of (ROE (TTM) 12.2% − Kₑ 9.3%) × BV; BV grows 7.9%/yr
Graham NumberAsset$98.776.56xyes√(22.5 × EPS $7.29 × BVPS $59.47) — Graham's conservative floor
EV/EBITDA RelativeRelative$139.014.66xyesEBITDA $1.82B × sector EV/EBITDA 12.0x
FCF YieldEarnings$114.615.65xyesFCF $1682.0M / Kₑ 9.3% — zero-growth perpetuity
SBC-Adj FCF YieldEarnings$99.946.48xyesSBC-adj FCF $1.48B (FCF $1.68B − SBC $0.21B) capitalized at Kₑ
Ben Graham FormulaEarnings$235.222.75xyesEPS $7.29 × (8.5 + 2×15.0%) × (4.4 / 5.3%)
ROIC-Justified P/BAsset$20.1532.14xyesBV $59.47 × (ROIC 3.1% / WACC 9.2%) (excluded from median)
P/Sales SectorRelative$495.131.31xyesRevenue $30.12B × sector P/S 2.5x
PEG Fair ValueRelative$243.342.66xyesEPS $7.29 × (PEG 1.5 × growth 22.3% (input: historical EPS growth)) → PE 33.4x
Earnings YieldEarnings$78.818.22xyesEPS $7.29 / required return 9.3% (Rf 4.3% + ERP 5.0%)
Funds From Operations MultipleRelative——no—
Clinical Phase NPVGrowth——no—
MertonAsset——no—
V5 Mechanical———no—

Solvency

FieldValue
Net debt$5.5b
Net debt / NOPAT (after-tax)4.18x
Net debt / operating income (pre-tax)3.77x
Interest coverage5.7x
Share count CAGR (dilution)0.7%
Burning cashno

Bullet Takeaways

Bull Case

The way to read Quanta is through how it deploys capital, because it sits in front of one of the largest infrastructure demand waves in decades and is investing to capture it. The company builds and maintains the electric grid, and the 10-K describes the backdrop directly: "multi-year grid modernization and reliability programs, as well as system upgrades and hardening programs in response to recurring severe weather events," alongside "high demand" for its services (FY2025 10-K, accession 0001050915-26-000006). Quanta reinvests aggressively into the skilled labor, equipment, and bolt-on acquisitions needed to serve that demand, and the results show it working. First-quarter 2026 revenue jumped 26% to $7.87 billion, adjusted EPS rose 51%, and the company raised full-year guidance. That is capital allocation aimed squarely at growth, and the growth is materializing.

The backlog is the proof that the demand is durable, not a one-quarter spike. Record total backlog reached $48.5 billion, up from $44.0 billion at year-end, which gives unusual visibility into future revenue. Quanta serves "electric and energy delivery companies, as well as governmental entities" (accession 0001050915-26-000006), customers with multi-decade capital plans driven by the energy transition, AI-driven data center power needs, and grid hardening. These are not discretionary projects; utilities must spend to keep the lights on and to connect new load. A contractor with the scale, skilled workforce, and equipment to win that work has a structural advantage, because labor and capacity are the binding constraints in this market, not demand.

The moat is the workforce and the relationships. Quanta is the largest specialty contractor in electric power, and in a labor-constrained industry, the company that can field and retain crews wins the work. That scale lets it take on the biggest, most complex programs that smaller competitors cannot, and its master service agreements with utilities create recurring, relationship-based revenue. With interest coverage above six times and a balance sheet that supports continued investment and acquisitions, Quanta can keep compounding alongside a demand wave that has years to run. For investors who believe the electrification and grid-investment cycle is secular and long, Quanta is the purest large-cap way to own it.

Bear Case

The advantage that makes Quanta valuable, its position in front of a demand wave, is also the thing the market has fully priced and then some, and the erosion risk starts there. The stock trades at the very top of its peer multiple distribution, well beyond the upper quartile, which means the market is treating Quanta as if its current growth is both unique and permanent. But construction is a competitive business, and the same demand drawing Quanta in is drawing competitors, new entrants, and customers' own in-house capabilities. As pricing improves, capacity expands, and the premium returns Quanta earns today can compress toward industry norms. A moat built on labor and scale is real but not impregnable; competitors can hire crews and make acquisitions too.

The backlog, impressive as it is, is softer than it looks. The 10-K explains that the company estimates backlog for its master service agreements "using recurring historical trends, factoring in seasonal demand and projected cust" (FY2025 10-K, accession 0001050915-26-000006), and notes elsewhere that such agreements can be "terminated on short notice even if we are not in default." In other words, a meaningful chunk of backlog is an estimate, not a firm commitment, and it can shrink if utility capital plans change. Infrastructure construction is also exposed to project execution risk, weather delays, labor cost inflation, and fixed-price overruns, any of which can dent the margins the price assumes will keep expanding.

The valuation leaves no room for any of that to go wrong. At roughly 76 times operating income, only the forward-growth frame reaches the price; the asset, earnings-power, and peer-multiple frames all sit far below it, and the reverse-DCF fair band centers well under the current level. The current operating margin is a modest 5.7%, typical for construction, so the price is betting on both sustained high growth and meaningful margin expansion for many years. The price implies that pace holding for around 16 years, and history is unkind to such durations. Net debt near three times operating income adds leverage to a cyclical, project-based business. The bear case is not that Quanta is a bad company; it is that a great company priced for perfection has a long way to fall if growth merely normalizes.

Valuation

Quanta is priced as a premier growth compounder, and the inversion shows just how much is embedded. At about $703 (June 28, 2026) the stock trades near 76 times company-wide operating income, which implies growth held at a self-funding ceiling for about 16 years, computed at a 10.7% cost of capital. The multiple sits at the very top of the peer distribution, well beyond the upper quartile, so the market is paying more for Quanta than for any of its comparables. The current operating margin is 5.7%, so the price assumes both sustained high growth and margin expansion over a long horizon.

The family pattern is the signature of an expectations stock. The asset frame sits far below price, the earnings-power frame far below, and the peer-multiple frame well below; only the forward-growth frame reaches the current level. The reverse-DCF reasonable-growth band runs from a low near $139 to a base around $191 and a high near $220, all dramatically below the $703 price. That gap is not a contradiction to dismiss; it is the cost of the durability premium. The market is valuing Quanta on a secular demand story that the static, current-economics frames cannot capture, and the question is whether that story justifies a price four times the methods' base estimate.

The honest framing is that Quanta is an outstanding business at a price that demands an outstanding outcome. The grid-investment and electrification tailwinds are real and durable, and Quanta is the best-positioned large-cap to ride them, which is why the growth-DCF reaches the price. The position is an underwrite of roughly a decade and a half of high growth and margin expansion, and it should be sized to that, not to any of the conventional fair-value anchors, which all sit far below.

Catalysts

The recent quarter was a standout catalyst. First-quarter 2026 revenue rose 26.3% to $7.87 billion, well ahead of consensus, and adjusted EPS of $2.68 beat estimates and jumped 51% year over year. Record total backlog reached $48.5 billion, and management raised full-year 2026 guidance to revenue of $34.7 to $35.2 billion and adjusted EPS of $13.55 to $14.25. The stock surged following the release, and analyst support strengthened, including an Oppenheimer upgrade to Outperform with an $800 target. The next earnings reports are the checkpoints for whether the growth and backlog momentum continue.

The structural catalysts are the demand drivers. Grid modernization, hardening against severe weather, the connection of renewable generation, and the surge in data center power needs from AI are all multi-year programs that feed Quanta's pipeline. Continued backlog growth, large program awards, and accretive acquisitions are the company-specific levers to watch, since each extends the visibility that supports the premium valuation. Margin expansion is the other key metric, because the price assumes margins rise from current levels.

The risks are valuation and execution. With the stock priced at the top of its peer group, any deceleration in growth, a backlog reduction as utilities adjust capital plans, or a margin disappointment could trigger an outsized move given how much is priced in. Master service agreement backlog can be terminated on short notice, project execution and labor cost inflation can pressure margins, and the leverage on the balance sheet adds risk in a downturn. A great quarter is already the expectation here, so even strong results that merely meet a high bar may not satisfy a price that assumes years of exceptional performance.

Peer Cohorts (Per Segment, With Filing Citations)

Electric (reported)

Underground and Infrastructure (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 PWR report on boothcheck