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Quanta Services (PWR) Laps the Stock Market: Here's Why

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Quanta Services (PWR - Free Report) closed at $396.02 in the latest trading session, marking a +1.91% move from the prior day. The stock's change was more than the S&P 500's daily gain of 0.44%. At the same time, the Dow added 0.14%, and the tech-heavy Nasdaq gained 0.7%.

The specialty contractor for utility and energy companies's stock has climbed by 2.3% in the past month, exceeding the Construction sector's loss of 0.58% and lagging the S&P 500's gain of 4.03%.

The investment community will be closely monitoring the performance of Quanta Services in its forthcoming earnings report. The company is expected to report EPS of $3.24, up 19.12% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $7.41 billion, up 14.06% from the prior-year quarter.

For the full year, the Zacks Consensus Estimates are projecting earnings of $10.56 per share and revenue of $27.79 billion, which would represent changes of +17.73% and +17.38%, respectively, from the prior year.

Any recent changes to analyst estimates for Quanta Services should also be noted by investors. These latest adjustments often mirror the shifting dynamics of short-term business patterns. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, ranging from #1 (Strong Buy) to #5 (Strong Sell), possesses a remarkable history of outdoing, externally audited, with #1 stocks returning an average annual gain of +25% since 1988. Over the past month, the Zacks Consensus EPS estimate has moved 0.24% higher. Quanta Services is currently a Zacks Rank #3 (Hold).

Valuation is also important, so investors should note that Quanta Services has a Forward P/E ratio of 36.79 right now. This indicates a premium in contrast to its industry's Forward P/E of 21.93.

Investors should also note that PWR has a PEG ratio of 2.12 right now. The PEG ratio bears resemblance to the frequently used P/E ratio, but this parameter also includes the company's expected earnings growth trajectory. The Engineering - R and D Services industry had an average PEG ratio of 1.78 as trading concluded yesterday.

The Engineering - R and D Services industry is part of the Construction sector. At present, this industry carries a Zacks Industry Rank of 156, placing it within the bottom 37% of over 250 industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow PWR in the coming trading sessions, be sure to utilize Zacks.com.


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