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PWR — Quanta Services

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Evidence and analysis

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2. Company Fundamentals

2.1 Competitiveness

Metric Value
Operating Margins 4.24%
Profit Margins 3.67%
Return on Equity 13.53%
Return on Assets 4.71%
Free Float 0.15B
Dividend Yield 7.0%
Short Int % Utilisation 2.97%

2.2 Growth

Metric Value
Revenue Growth 26.3%
Free Cash Flow 1.04B
EBITDA 39.01 (Ratio)
Enterprise Value 103.73B
EV/Revenue 3.44
EV/EBITDA 39.01

Revenue growth of 26.3% places the company in a high-growth category.

2.3 Management

Role Metric
Consensus Rating N/A

2.4 Return

Metric Value
Expected Return (Ann.)* 98.21%
Risk / Std Dev (Ann.)* 43.18%
1-Year Price Return* 80.24%

Latest Market Data (as of 2026-08-14, US Eastern time):

Metric Value
Last Price $685.78
52-Week Range $363.01 – $788.75
Observation Count 251 trading days

The return and risk statistics use daily adjusted closes from the retrieved one-year series and annualise daily moments using 252 trading days. The last price is the latest regular-market price reported for the stated date. Source: Yahoo Finance market data.

DuPont Model Analysis

The DuPont model decomposes return on equity (ROE) into three operating and capital-structure drivers:

ROE = Net Margin × Asset Turnover × Equity Multiplier

The comparison uses the latest two comparable annual periods available for the issuer, with reported statement amounts shown in US$. Revenue and net income are income-statement flows; total assets and shareholders’ equity are year-end balance-sheet figures. This is a simplified year-end-balance DuPont comparison rather than an average-balance ROE calculation.

DuPont component Calculation FY2025 FY2024
Revenue Reported revenue $28.48B $23.67B
Net income Reported net income $1.03B $904.82M
Total assets Year-end reported balance $24.93B $18.68B
Shareholders’ equity Year-end reported balance $8.94B $7.32B
Net margin Net income ÷ revenue 3.61% 3.82%
Asset turnover Revenue ÷ total assets 1.1425x 1.2670x
Equity multiplier Total assets ÷ shareholders’ equity 2.7888x 2.5532x
ROE Net margin × asset turnover × equity multiplier 11.51% 12.36%

Source: Yahoo Finance annual statements. Values are based on the two latest comparable annual periods returned by the source; fiscal period labels use the statement period-end year.

2.5 FCFF DCF Valuation

Valuation basis: This research model follows a five-year, unlevered FCFF DCF. It starts from reported annual operating inputs, forecasts revenue and operating cash conversion under an explicit mechanical policy, discounts FCFF at WACC, applies a Gordon-growth terminal value, and bridges enterprise value to an indicative common-equity value per share. It is an analytical estimate rather than a recommendation or personalised target price.

Step 1 — Forecast Operating Profit and NOPAT

Reported operating input Value
Revenue $28.48B
Prior annual revenue $23.67B
EBIT $1.65B
Tax rate 25.00%
NOPAT = EBIT × (1 − tax rate) $1.24B
Forecast start-growth basis 15.00%
Forecast policy latest reported annual revenue growth, bounded to -10.00% / 15.00%

Step 2 — Calculate FCFF

Current FCFF building block Value
NOPAT $1.24B
Add: depreciation & amortisation $910.33M
Less: capital expenditure -$609.15M
Less/(add): working-capital cash-flow movement $15.98M
Current unlevered FCFF $1.56B

Explicit FCFF forecast

Forecast year Revenue growth NOPAT D&A Capex Change in NWC FCFF Present value
1 15.00% $1.42B $1.05B -$700.53M $18.37M $1.79B $1.70B
2 11.88% $1.59B $1.17B -$880.59M $20.56M $1.90B $1.63B
3 8.75% $1.73B $1.27B -$1.06B $22.36M $1.97B $1.52B
4 5.62% $1.83B $1.35B -$1.23B $23.61M $1.96B $1.37B
5 2.50% $1.88B $1.38B -$1.38B $24.20M $1.90B $1.19B

Step 3 — Determine the Discount Rate (WACC)

WACC input Value
Risk-free rate 4.71%
Equity risk premium assumption 5.50%
Beta 1.22
Cost of equity 11.42%
Pre-tax cost of debt 4.80%
WACC 10.97%
WACC validation within standard range

Step 4 — Estimate Terminal Value

Terminal-value input Value
Perpetuity growth rate 2.50%
Terminal value $23.00B
Implied terminal EV / EBITDA 5.93x
Terminal value as % of enterprise value 64.89%

Step 5 — Discount Cash Flows to Enterprise Value

Enterprise-value component Value
Present value of explicit FCFF $7.40B
Present value of terminal value $13.67B
Indicated enterprise value $21.07B
Discounting convention mid-year for explicit FCFF; terminal value discounted at year-end five

Step 6 — Convert Enterprise Value to Equity Value

Equity bridge Value
Indicated enterprise value $21.07B
Less: gross interest-bearing debt $6.42B
Add: cash and equivalents $439.51M
Add: affiliate investments $0.00
Less: minority interests $89.62M
Indicated common equity value $15.00B

Step 7 — Calculate Indicative Value Per Share

Per-share output Value
Shares used 151,291,000.00
Share-count basis reported diluted weighted-average shares
Current market price $696.67
DCF indicative value per share $99.16
Indicative value vs. market price -85.77%

Model Integrity Checks

Check Result
Perpetuity growth is below the risk-free rate pass
Perpetuity growth is below WACC pass
WACC is within the configured operating-company range pass
Terminal-year FCFF is positive pass
Terminal capex converges to D&A pass
Terminal-value concentration within review band
Implied price differs from spot by more than 30% review required

2.6 Investor-Style Research Screen

Educational screen Result
Buffett-inspired cash-quality checks 3/4 evidenced checks
Lynch-inspired balance-and-growth checks 4/4 evidenced checks

Data lineage: Yahoo Finance public market and reported-statement data; retrieval timestamp: 2026-08-18 17:46:57.580347 UTC; latest reported fiscal period: 2025-12-31 00:00:00. Default assumptions: five-year forecast, mid-year discounting for explicit FCFF, a maximum 2.50% perpetuity-growth rate below both WACC and the risk-free rate, historical operating-ratio persistence, and capex convergence to D&A by year five. No sell-side consensus or management guidance is substituted for reported inputs. This is research and analysis only, not personalized financial advice.

2.7 Quantitative Factor Diagnostics

Model basis: Daily issuer USD excess returns are regressed in-sample using ordinary least squares on matching regional Fama–French factors. FF3 estimates market, size, and value loadings; FF5 adds profitability and investment. Coefficients are descriptive historical exposures, not predictions.

Estimation input Value
Regional factor set US
Factor-return currency USD
Issuer-return basis USD adjusted total return
Estimation window 2025-08-19 to 2026-06-30
Aligned daily observations 217
Minimum observation requirement 120
Currency conversion for HK listings not required

Fama–French Three-Factor and Five-Factor Results

Diagnostic FF3 FF5
Annualised alpha 73.56% 41.95%
Adjusted R² 0.24 0.30
Annualised residual volatility 34.77% 33.34%
Factor loading (t-statistic) FF3 FF5
Market excess return (Mkt-RF) 1.44 (7.04) 1.05 (4.64)
Size (SMB) 0.15 (0.55) -0.13 (-0.47)
Value (HML) -0.09 (-0.39) -0.02 (-0.08)
Profitability (RMW) NM -1.03 (-4.31)
Investment (CMA) NM 0.38 (0.91)

Definitions: Mkt-RF is the market return less the risk-free rate; SMB is small minus big; HML is high minus low book-to-market; RMW is robust minus weak profitability; CMA is conservative minus aggressive investment. Factor returns are sourced from the Kenneth R. French Data Library; issuer adjusted-return history is sourced from Yahoo Finance. For Hong Kong listings, adjusted HKD prices are converted into USD with daily USD/HKD closes before return calculation to match the USD regional factor basis. This is an in-sample historical regression; coefficients and t-statistics do not establish causation or predict future returns. This is research and analysis only, not personalized financial advice.

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