What a time it’s been for Quanta. In the past six months alone, the company’s stock price has increased by a massive 65.9%, reaching $744.79 per share. This was partly thanks to its solid quarterly results, and the performance may have investors wondering how to approach the situation.
Following the strength, is PWR a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.
Why Are We Positive On Quanta?
A construction engineering services company, Quanta (NYSE: PWR) provides infrastructure solutions to a variety of sectors, including energy and communications.
1. Surging Backlog Locks In Future Sales
In addition to reported revenue, backlog is a useful data point for analyzing Energy Products and Services companies. This metric shows the value of outstanding orders that have not yet been executed or delivered, giving visibility into Quanta’s future revenue streams.
Quanta’s backlog punched in at $48.5 billion in the latest quarter, and over the last two years, its year-on-year growth averaged 21.2%. This performance was fantastic and shows the company has a robust sales pipeline because it is accumulating more orders than it can fulfill. Its growth also suggests that customers are committing to Quanta for the long term, enhancing the business’s predictability. 
2. Projected Revenue Growth Is Remarkable
Forecasted revenues by Wall Street analysts signal a company’s potential. Predictions may not always be accurate, but accelerating growth typically boosts valuation multiples and stock prices while slowing growth does the opposite, though some deceleration is natural as businesses become larger.
Over the next 12 months, sell-side analysts expect Quanta’s revenue to rise by 19.4%, close to its 22% annualized growth for the past five years. This projection is eye-popping for a company of its scale and implies the market is forecasting success for its products and services.
3. Outstanding Long-Term EPS Growth
We track the long-term change in earnings per share (EPS) because it highlights whether a company’s growth is profitable.
Quanta’s astounding 22.7% annual EPS growth over the last five years aligns with its revenue performance. This tells us it maintained its per-share profitability as it expanded.
Final Judgment
These are just a few reasons Quanta is a high-quality business worth owning, and after the recent rally, the stock trades at 52× forward P/E (or $744.79 per share). Is now the right time to buy? See for yourself in our comprehensive research report, it’s free.
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