- Quanta Services' recurring revenue as a percentage of total revenue is increasing due to accelerating spending on electric grid modernization and hardening, among other infrastructure.
- At $15B, total backlog is at record levels and at $8.4B, 12-month backlog is also at record levels despite COVID-19.
- Quanta's stellar balance sheet, ample free cash flow, and likelihood for rising EPS estimates offset softness in its pipeline and industrial segment.
- Valuation is the main complaint: Shares have increased ~25-30% over the last two months, though greater earnings predictability deserves share re-rating to the upside.
For further details see:
Quanta Services: More Predictable Future From Grid Modernization, Integrity Work, Worthy Of Upside Re-Rating