PRIMORIS SERVICES CORP (NYSE:PRIM) – A Potential Undervalued Opportunity

PRIMORIS SERVICES CORP (NYSE:PRIM) was identified by our Decent Value stock screener as a company with solid fundamentals and an attractive valuation. The stock shows reasonable growth, profitability, and financial health while trading at a discount compared to industry peers. Below, we examine why PRIM may appeal to value investors.

Valuation

PRIM stands out with a Valuation Rating of 7/10, indicating it trades at a discount relative to its fundamentals. Key points include:

• P/E Ratio of 19.38 – While this may seem high in isolation, it is significantly cheaper than 82.7% of its peers in the Construction & Engineering industry.
• Forward P/E of 16.52 – Below both the industry average (24.32) and the S&P 500 (21.90), suggesting future earnings growth is not fully priced in.
• Enterprise Value/EBITDA – PRIM is cheaper than 88.5% of its competitors, reinforcing its undervaluation.

Financial Health

With a Health Rating of 6/10, PRIM maintains a stable balance sheet:

• Debt/Equity Ratio of 0.38 – Well-managed leverage, outperforming 63.5% of industry peers.
• Strong Solvency – A Debt-to-FCF ratio of 1.37 means PRIM could repay its debt quickly if needed, ranking better than 80.8% of competitors.
• Liquidity – A Current Ratio of 1.22 indicates sufficient short-term financial flexibility.

Profitability

PRIM earns a Profitability Rating of 6/10, supported by:

• ROIC of 10.10% – Above its three-year average (7.18%) and outperforming 71.2% of peers.
• Operating Margin Expansion – Improved to 5.24%, signaling better cost efficiency.
• Consistent Earnings – Positive earnings and operating cash flow over the past five years.

Growth

The Growth Rating of 6/10 reflects solid historical performance:

• EPS Growth (57.8% YoY) – Strong recent earnings expansion.
• Revenue Growth (12.5% YoY) – Outpacing many competitors.
• Forward EPS Growth (13.8%) – Expected to remain healthy, though revenue growth may slow slightly.

Our Decent Value Stock Screener lists more stocks with similar characteristics.
For a deeper dive, review the full fundamental report on PRIM.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.