- Quanta Services shares have delivered ~68% in price return vs ~23% return in the S&P 500 since we last published.
- Upward EPS estimate revisions, rising recurring revenue as a percentage of total revenue, rising backlog, and the recent Blattner Holding acquisition have contributed to an upward valuation re-rate.
- The data is mixed on valuation. Manual calculations indicate PEG ratios in the low 1s FY1 and below 1 for FY3 PEG ratios. Database numbers are far higher.
- We remain positive on Quanta’s long-term prospects. The strong upward re-rate combined with mixed data led us to believe that Quanta share prices are likely to consolidate near term.
- Consequently, we are moving our stance from Bullish to Neutral but would be buyers of Quanta shares on dips.
For further details see:
Quanta Services: Shares Re-Rated To The Upside As Forecast, Modest Near-Term Returns Ahead