Primoris currently trades at $157.85 and has been a dream stock for shareholders. It’s returned 360% since April 2021, blowing past the S&P 500’s 68.6% gain. The company has also beaten the index over the past six months as its stock price is up 15.4% thanks to its solid quarterly results.
Is now still a good time to buy PRIM? Or is this a case of a company fueled by heightened investor enthusiasm? Find out in our full research report, it’s free.
Why Are We Positive On Primoris?
Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.
1. Skyrocketing Revenue Shows Strong Momentum
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Thankfully, Primoris’s 16.8% annualized revenue growth over the last five years was incredible. Its growth surpassed the average industrials company and shows its offerings resonate with customers.
2. Outstanding Long-Term EPS Growth
Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.
Primoris’s EPS grew at 20.6% compounded annual growth rate over the last five years, higher than its 16.8% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
3. Increasing Free Cash Flow Margin Juices Financials
If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.
As you can see below, Primoris’s margin expanded by 6 percentage points over the last five years. The company’s improvement shows it’s heading in the right direction, and we can see it became a less capital-intensive business because its free cash flow profitability rose while its operating profitability was flat. Primoris’s free cash flow margin for the trailing 12 months was 4.5%.
Final Judgment
These are just a few reasons Primoris is a rock-solid business worth owning, and with its shares topping the market in recent months, the stock trades at 27.6× forward P/E (or $157.85 per share). Is now a good time to buy? See for yourself in our comprehensive research report, it’s free.
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