Quanta Services, Inc. (PWR): what the price assumes
In the published model solve dated 2026-Q2, anchored at $600.90, Quanta Services, Inc. (PWR) is priced for today's economics sustained for ~11.8 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 2026-06-28.
Generated: 2026-08-30 · Source: https://boothcheck.com/report/PWR
Headline
| Field | Value |
|---|---|
| Ticker | PWR |
| Company | Quanta Services, Inc. |
| Current price | $600.90/sh |
| Composition | United States 93% / Canada 4% / Australia 3% / Others 1% |
What The Price Assumes (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin (value-band context) | 4.9% |
| Operating margin today | 6.2% |
| Margin compression (value-band) | -1.3pp |
| Must persist for | 11.8y |
| Multiple paid | 47x 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 10.4% cost of capital; growth searched up to the 25% self-funding ceiling.
How unusual the bet is: elevated (limited comparison data)
| Reference | Value |
|---|---|
| vs own history | +0.48σ |
| cohort percentile (of 225 peers) | 94 |
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 5.36x | 5 | expensive |
| Earnings | 3.97x | 5 | expensive |
| Relative | 1.90x | 2 | expensive |
| Growth | 0.66x | 3 | justifies |
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=15)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $1010.38 | 0.59x | yes | FCF base $3.5B, growth 25% (input: historical growth), terminal g 4.0%, WACC 9.2%, 7yr projection |
| DCF Exit Multiple | Growth | $882.34 | 0.68x | yes | Exit EV/EBITDA: 40.4x / 42.4x / 44.4x (bear / base = today's held flat / bull), 7yr |
| Relative Valuation | Relative | — | — | no | P/E 33.03x (blended: static sector reference 18x + trailing (TTM) 68x), scenarios: 26.5x / 33.0x / 39.6x (bear / base = reference held flat / bull), EV/EBITDA 21.11x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $95.41 | 6.30x | yes | BV/sh $64.11, ROE (TTM) 13.8%, ke 9.3% |
| Two-Stage Excess Return | Asset | $115.25 | 5.21x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $916.35 | 0.66x | yes | Rev $32.9B, growth 26% (input: historical growth; tapered), Terminal P/S: 2.2x / 2.7x / 3.3x (bear / base = today's held flat / bull, cap 12x) |
| Peter Lynch Fair Value | Relative | $305.55 | 1.97x | yes | EPS $8.73, growth 35% (input: historical EPS growth), PEG=1.95 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $74.58 | 8.06x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $1.28B × (1−26%) / WACC 9.2% → EPV (no growth) |
| Residual Income | Asset | $119.17 | 5.04x | yes | BV $64.11 + 5yr PV of (ROE (TTM) 13.8% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $112.21 | 5.36x | yes | √(22.5 × EPS $8.73 × BVPS $64.11) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | — | — | no | EBITDA $2.15B × sector EV/EBITDA 12.0x |
| FCF Yield | Earnings | $167.45 | 3.59x | yes | FCF $2391.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $151.22 | 3.97x | yes | SBC-adj FCF $2.17B (FCF $2.39B − SBC $0.23B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $281.69 | 2.13x | yes | EPS $8.73 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $35.00 | 17.17x | yes | BV $64.11 × (ROIC 5.0% / WACC 9.2%) |
| P/Sales Sector | Relative | — | — | no | Revenue $32.91B × sector P/S 2.5x |
| PEG Fair Value | Relative | $327.38 | 1.84x | yes | EPS $8.73 × (PEG 1.5 × growth 25.0% (input: historical EPS growth)) → PE 37.5x |
| Earnings Yield | Earnings | $94.38 | 6.37x | yes | EPS $8.73 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | — | — | no | — |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
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.
| Unit | Role | Valuation basis | Revenue | Reported profit | Value evidence | Status |
|---|---|---|---|---|---|---|
| Electric | operating | enterprise | $23.0b | — | withheld | unresolved no unit value |
| Underground and Infrastructure | operating | enterprise | $5.5b | — | withheld | unresolved 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
| Field | Value |
|---|---|
| Net debt | $5.6b |
| Net debt / NOPAT (after-tax) | 3.69x |
| Net debt / operating income (pre-tax) | 2.75x |
| Interest coverage | 6.9x |
| Share count CAGR (dilution) | 0.7% |
| Burning cash | no |
Bullet Takeaways
- The capital story is reinvestment into a once-in-a-generation demand wave: grid modernization, data center buildout, and electrification. Quanta is plowing cash into people, equipment, and acquisitions to capture it, and the backlog reflects the payoff.
- The first quarter of 2026 was a blowout, with revenue up 26% to $7.87 billion, adjusted EPS up 51%, and record backlog of $48.5 billion. Management raised full-year guidance and the stock jumped.
- The price is the obvious risk. At about $703 the stock trades near 76 times operating income, the very top of its peer group, with only the forward-growth frame reaching the price. The reverse-DCF fair band sits far below the current level.
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)
- MTZ (MasTec, Inc.)
- FY2025 10-K: …in transportation and industry. According to the 2026 Deloitte Power and Utilities Outlook, peak U.S. electricity demand is projected to grow by approximately 26% by 2035 and data center demand alone could increase fivefold from 2024 to 2035. We expect the projected energy load growth in the U.S. to drive meaningful…
- 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…
- 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: …revenue and cost of revenue of $ 135.2 million in the Utilities segment and $ 0.2 million in the Energy segment eliminated in our Consolidated Statements of Income. For the year ended December 31, 2024 Utilities % of Segment Revenue Energy % of Segment…
- EME (EMCOR Group, Inc.)
- FY2025 10-K: …approximately 72% of our revenues from our construction operations, approximately 21% of our revenues from our building services operations, and approximately 7% of our revenues from our industrial services operations. For additional information regarding our revenues, see Note 3 - Revenue from Contracts with…
- FY2025 10-K: …customers through approximately 100 operating subsidiaries, which specialize principally in providing construction services relating to electrical and mechanical systems in all types of facilities and in providing various services relating to the operation, maintenance, and management of those facilities. Such…
- MYRG (MYR GROUP INC.)
- 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…
- FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
- FIX (COMFORT SYSTEMS USA, INC.)
- FY2025 10-K: …was established in 1997. We provide mechanical and electrical contracting services. Our mechanical segment principally includes heating, ventilation and air conditioning ("HVAC"), plumbing, piping and controls, as well as off-site construction, monitoring and fire protection. Our electrical segment includes…
- FY2025 10-K: …packaged heating and air conditioning units, or in the case of larger facilities, separate core components such as chillers, boilers, air handlers, and cooling towers. We also typically install connecting and distribution elements such as piping and ducting. In our electrical business segment, our principal business…
- 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: …respectively. 71 Table of Contents 20. Customer Concentration and Revenue Information Geographic Location We provide services throughout the United States. Significant Customers Our customer base is highly concentrated, with our top five customers accounting for approximately 55.4 %, 57.7 %, and 66.7 %, of our total…
- STRL (Sterling Infrastructure, Inc.)
- FY2025 10-K: …$80 million, contingent upon achieving certain operating income targets. CEC is included in the Company's E-Infrastructure Solutions segment. Segments, Markets and Customers The Company's internal and public segment reporting are aligned based upon the services offered by its operating groups, which represent the…
- FY2025 10-K: LLC ("Drake") (the "Drake Acquisition"). Drake provides concrete slabs for residential home builders in the Dallas-Fort Worth market. The acquisition strengthens Sterling's geographic footprint within the DFW metroplex and expands and deepens the customer base, given limited customer overlap with Tealstone. The…
Underground and Infrastructure (reported)
- 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: …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…
- PRIM (Primoris Services Corporation)
- FY2025 10-K: …which could reduce demand for our services or delay our ability to complete projects. Additionally, our failure to comply with applicable regulations could result in substantial fines or revocation of our operating licenses, as well as give rise to termination or cancellation rights under our contracts or disqualify…
- 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: …and should be read in conjunction with this discussion. Revenue Recognition. We perform a significant amount of our services under master service agreements and other contracts that contain customer-specified service requirements. These agreements include discrete pricing for individual tasks including, for example,…
- FY2025 10-K: …respectively. 71 Table of Contents 20. Customer Concentration and Revenue Information Geographic Location We provide services throughout the United States. Significant Customers Our customer base is highly concentrated, with our top five customers accounting for approximately 55.4 %, 57.7 %, and 66.7 %, of our total…
- GVA (GRANITE CONSTRUCTION INC)
- FY2025 10-K: …hot mix aggregates and concrete aggregates. Internal controls Mining operations include risk in estimation of mineral reserves and mineral resources that could be impacted by unforeseen geologic circumstances, changes in regulation or changes in sales and customers. The risk that these estimates would be unreasonable…
- 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…
- ROAD (Construction Partners, Inc.)
- FY2025 10-K: …disruption during paving, as compared to concrete. Recent growth in our industry has been driven by federal, state, county and local Department of Transportation ("DOT") budgets, which annually earmark amounts for transportation and infrastructure spending. Currently, federal funding for infrastructure spending is…
- FY2025 10-K: …include, but are not limited to: • declines in public infrastructure construction and reductions in government funding, including the funding by transportation authorities and other state and local agencies; • risks related to our operating strategy; • competition for projects in our local markets; • risks associated…
- MYRG (MYR GROUP INC.)
- FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
- 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…
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.