Quanta Services Faces Challenges Amid Market Downturn

With a market capitalization of $36.5 billion, Quanta Services, Inc. (PWR), headquartered in Houston, Texas, delivers infrastructure solutions across various sectors including electric and gas utilities, renewable energy, communications, pipelines, and broader energy industries in the United States, Canada, Australia, and internationally.

As a large-cap stock, Quanta Services exceeds the $10 billion valuation threshold and ranks among the largest contractors in North America’s transmission and distribution sector for electric utilities.

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However, despite these strong fundamentals, PWR shares have decreased by 31.9% from their 52-week high of $365.88, reached on January 22. Over the past three months, PWR has declined by 25.9%, underperforming the Themes US Infrastructure ETF (HWAY), which saw an 11.9% drop in the same period.

Looking at a more extended timeframe, PWR has also underperformed against HWAY. The stock has fallen 7.2% over the six months while HWAY has experienced a modest 2% decline.

PWR has been trading below its 200-day moving average since late February and has stayed under its 50-day moving average since late January.

Following its Q4 earnings report on February 20, PWR’s stock fell by 3.7%. The company reported an adjusted profit per share of $2.94, exceeding analysts’ expectations of $2.62. Revenue for the quarter climbed 13.3% to $6.55 billion, which was slightly short of the anticipated $6.61 billion. Quanta Services has indicated that weather conditions, regulatory issues, and supply chain constraints have impacted project timelines and execution, which could affect future financial performance.

In comparison, PWR’s competitor Fluor Corporation (FLR) has also struggled, with a 20.8% drop in its stock price over the past six months.

Among the 22 analysts following PWR, the consensus rating is a “Strong Buy.” The average price target is set at $341, suggesting a potential upside of 36.9% from current market levels.

On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article are solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.

The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.