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Why Quanta Services (PWR) Stock Is Gaining Today

Stocks in this article: PWR

NEW YORK (TheStreet) -- Shares of Quanta Services Inc. (PWR) are up 3.46% to $34.94 after the specialty contracting services company announced that Valard Construction, a Quanta Services company, was selected by Labrador-Island Link Partnership, a subsidiary of Nalcor Energy, to install transmission infrastructure for the Labrador-Island Transmission Link project.

Valard will install about 684 miles of 350-kilovolt overhead high-voltage direct current transmission line running from the Muskrat Falls Hydroelectric Generating Facility in central Labrador to Newfoundland's Avalon Peninsula.   

Terms of the deal were not disclosed.

Must Read: Warren Buffett’s 25 Favorite Stocks

 

TheStreet Ratings team rates QUANTA SERVICES INC as a Buy with a ratings score of A. TheStreet Ratings Team has this to say about their recommendation:

"We rate QUANTA SERVICES INC (PWR) a BUY. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, solid stock price performance, growth in earnings per share and compelling growth in net income. We feel these strengths outweigh the fact that the company shows low profit margins."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • The revenue growth greatly exceeded the industry average of 13.1%. Since the same quarter one year prior, revenues rose by 26.5%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • PWR's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, PWR has a quick ratio of 1.84, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The stock has not only risen over the past year, it has done so at a faster pace than the S&P 500, reflecting the earnings growth and other positive factors similar to those we have cited here. Turning our attention to the future direction of the stock, it goes without saying that even the best stocks can fall in an overall down market. However, in any other environment, this stock still has good upside potential despite the fact that it has already risen in the past year.
  • QUANTA SERVICES INC has improved earnings per share by 12.1% in the most recent quarter compared to the same quarter a year ago. The company has demonstrated a pattern of positive earnings per share growth over the past two years. We feel that this trend should continue. During the past fiscal year, QUANTA SERVICES INC increased its bottom line by earning $1.87 versus $1.36 in the prior year. This year, the market expects an improvement in earnings ($1.99 versus $1.87).
  • The net income growth from the same quarter one year ago has exceeded that of the S&P 500 and greatly outperformed compared to the Construction & Engineering industry average. The net income increased by 15.4% when compared to the same quarter one year prior, going from $70.24 million to $81.08 million.
  • You can view the full analysis from the report here: PWR Ratings Report

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