Quanta Services, Inc.
PWR Details
Quanta Services, Inc. (NYSE: PWR) is the leading provider of specialty contracting services, delivering comprehensive infrastructure solutions for the electric as well as gas utility, communications, pipeline, and energy industries in the US, Canada, and Australia.
Fourth Quarter and Full-Year 2021 Results (Ended December 31, 2021)
- PWR’s revenues in Q4 FY 2021 amounted to $3.92 billion as compared to revenues of $2.91 billion in the Q4 FY 2020, and net income attributable to common stock stood at $104.8 Mn, or $0.71 per diluted share, in the Q4 FY 2021 as compared to net income attributable to common stock of $170.1 million, or $1.17 per diluted share, in Q4 FY 2020.
- The company stated that it believed its FY 2021 results reflect the success of the strategic initiatives as well as collaborative relationships with customers, as well as robust, sustainable and visible end-market drivers.
- During the 4Q FY 2021, Quanta acquired 4 additional businesses for the aggregate consideration of ~$232.6 Mn, subject to the certain post-closing adjustments.
- The company’s revenues for the year ended December 31, 2021 amounted to $12.98 billion as compared to revenues of $11.20 Bn in the year ended December 31, 2020.
Source: Analysis by Kalkine Group
Recent Update
- PWR recently made an announcement that its Board of Directors named Redgie Probst, Quanta's President – Electric Power Division, as the company's Chief Operating Officer.
Key Risks
The company has stated that weather, regulatory, permitting, project timing, execution challenges as well as other factors impacted its historical results, and could impact its future financial results.
Outlook
The long-term outlook for the company’s business is positive. For the full-year ending December 31, 2022, the company is anticipating that its revenues would be ranging between $16.00 Bn- $16.50 Bn and its net income attributable to the common stock would range between $530 Mn- $604 Mn. For the full year ending December 31, 2022, the company’s EBITDA is anticipated to be between $1.45 billion- $1.56 billion.
Valuation Methodology: Price/EPS Based Relative Valuation (Illustrative)
Technical Overview
Source: REFINITIV, Note: Purple color line reflects Relative Strength Index (14-Period)
Stock Recommendation
In the month of December 2021, its Board of Directors declared the quarterly cash dividend of $0.07 per share, or the rate of $0.28 per share on an annualized basis. This represents 17% rise from its prior quarterly cash dividend which was paid in the month of October 2021.
The stock has been valued using Price/EPS multiple based relative valuation (on an illustrative basis), and the target price so arrived reflects a decline of low double-digit (in % terms). In addition, a slight discount has been applied to peer average Price/EPS multiple (NTM basis) considering the risks associated with the business as well as regulatory challenges. Also, negative economic as well as market developments, including low commodity production volumes and prices could significantly impact the company’s customers.
Thus, we give a “Sell” rating at the current price of US$119.35 per share (Time: 9:54 AM, NY, US) on 9th March 2022.
Note 1: The reference data in this report has been partly sourced from REFINITIV.
Quanta Services, Inc. (PWR) is a part of Kalkine’s Global Green Energy Product
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