Quanta Up 22% in 6 Months: Will Infrastructure Keep the Stock Rising?

Quanta Services, Inc. PWR has been a standout performer in a challenging market, gaining 21.8% over the past six months. This growth sharply contrasts with the Zacks Engineering - R and D Services industry’s 4.6% decline and outpaces both the Zacks Construction sector’s 1.8% dip and the S&P 500’s modest 3.8% rise.Meanwhile, PWR stock trades below the 50-day average but above the 200-day moving average. Despite trading below its 50-day moving average, the stock’s 10.4% discount to its 52-week high of $350.19 suggests potential room for further upside.Quanta’s Six-Month Price PerformanceImage Source: Zacks Investment ResearchAt the core of Quanta’s success is its ability to capitalize on soaring demand for energy infrastructure and grid modernization. As federal and state renewable energy mandates drive the transition to cleaner energy, Quanta is well-positioned to deliver solutions for high-voltage transmission systems and aging grid upgrades. The company’s integration of Cupertino Electric has further solidified its foothold in critical sectors like data centers and renewable energy.Infrastructure Growth: A Solid Foundation for QuantaQuanta’s strategic alignment with utility, renewable energy, and technology industries has fueled its impressive growth. Federal policies such as the Inflation Reduction Act and state-level renewable mandates are creating opportunities for high-voltage direct current systems, substations, and large-scale transmission projects. These initiatives are vital as the United States seeks to modernize its energy grid and support clean energy transitions.Additionally, the rise of artificial intelligence, cloud computing, and data centers has amplified the need for robust infrastructure. Through Cupertino Electric, Quanta is uniquely positioned to meet these demands and expand its customer base in the data center market. Meanwhile, aging grids and increasing weather-related disruptions have prompted utilities to invest in grid hardening and modernization—areas where Quanta has established multi-year contracts.Quanta’s Acquisitions and Diverse Services Drive ResilienceThe acquisition of Cupertino Electric has been transformative for Quanta, contributing $1 billion to $1.1 billion in annual revenues. This move enhances Quanta’s capabilities in high-demand sectors and supports faster execution of large-scale projects. Furthermore, Quanta’s diverse service portfolio—spanning power grid upgrades, renewable energy integration, and underground utilities—underpins its resilience in a dynamic market.Quanta’s ability to self-perform 85% of its work is another significant advantage. This operational model reduces reliance on external contractors, ensuring efficiency, quality, and cost control in project execution.PWR’s Outlook and Strategic FocusQuanta anticipates maintaining double-digit earnings per share (EPS) growth in 2025 and beyond, bolstered by its backlog and operational efficiencies. The company’s focus on self-performing critical tasks, coupled with strategic acquisitions, enables it to mitigate risks and adapt to shifting market demands.What Can Impact PWR Stock’s PerformanceWhile Quanta has capitalized on growth opportunities, challenges remain. Supply chain constraints, particularly in sourcing transformers and breakers, have elongated project timelines, pushing backlogs into 2027 and beyond. To address this, Quanta recently acquired a small transformer manufacturing company in New York to bolster internal supply and enhance client offerings.Labor shortages also pose industry-wide challenges. Quanta has responded with workforce development programs and partnerships with unions, growing its headcount to 62,000 in 2024. However, labor cost inflation (4-6% annually) continues to pressure margins. Additionally, weather-related disruptions, such as hurricanes, have strained project timelines and required resource reallocations.PWR Stock’s Valuation and Analysts’ SentimentQuanta’s forward 12-month Price-to-Earnings (P/E) ratio of 30.47 exceeds the industry average of 22.42, reflecting market confidence in its growth prospects. While the stock’s valuation is on the higher side, it remains within its three-year range of 17.01 to 39.99.However, the company is trading currently at a premium compared to other industry players like Comfort Systems USA, Inc. FIX, AECOM ACM and EMCOR Group, Inc. EME. FIX, ACM and EME are trading with forward 12-month P/E multiples of 20.98, 20.14, and 20.98, respectively.Quanta’s P/E Ratio (Forward 12-Month) vs. IndustryImage Source: Zacks Investment Research Analysts’ optimism further underscores Quanta’s potential. EPS estimates for 2025 have inched upward over the past 60 days, signaling confidence in the company’s earnings trajectory. The estimated figure indicates 18.1% year-over-year growth.Find the latest EPS estimates and surprises on Zacks Earnings Calendar.Image Source: Zacks Investment ResearchWith an Average Brokerage Recommendation (ABR) of 1.50 and 75% of analysts rating it as a “Strong Buy,” Wall Street remains bullish on PWR. The average price target of $342.94 per share implies a 9.9% upside from its current level.Should You Buy Quanta Stock Now?Quanta’s strong performance over the past six months reflects its strategic alignment with energy infrastructure trends and its ability to navigate industry challenges effectively. While supply chain and labor issues persist, the company’s proactive measures, diverse services, and robust acquisition strategy provide a solid foundation for growth.With a Zacks Rank #2 (Buy), Quanta Services offers a compelling investment case for those looking to capitalize on the surging demand for energy and technology infrastructure. The stock’s recent momentum and favorable market dynamics suggest it is well-positioned to keep powering ahead. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.7 Best Stocks for the Next 30 DaysJust released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."Since 1988, the full list has beaten the market more than 2X over with an average gain of +24.1% per year. So be sure to give these hand picked 7 your immediate attention. See them now >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Quanta Services, Inc. (PWR): Free Stock Analysis Report AECOM (ACM): Free Stock Analysis Report EMCOR Group, Inc. (EME): Free Stock Analysis Report Comfort Systems USA, Inc. (FIX): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks