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Quanta: Valuation Is Off The Grid

Oct. 02, 2023 9:43 AM ETQuanta Services, Inc. (PWR)3 Comments
Caffital Research profile picture
Caffital Research


  • Quanta Services has a strategy of constant acquisitions leading to good long-term growth.
  • The company has a diverse portfolio of energy infrastructure solutions and a well-diversified client base as a result of constant acquisitions.
  • The stock price has rallied significantly in the past years - after the rally, my DCF model estimates the stock to be overvalued, constituting my sell rating.

High Voltage Electric Power Lines At Sunset


Quanta Services (NYSE:PWR) provides energy infrastructure solutions. The company has had a strategy revolving around constant acquisitions, boosting the company's long-term growth to a very good level. After a massive stock price run, though, I believe the stock is currently overvalued; I have a

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Caffital Research profile picture
I write mostly about small cap companies in the United States, focusing on a thorough explanation on valuation. My investment philosophy revolves around the DCF model, and analysis that leads into my assumptions used in the model. The approach doesn't limit my investment philosophy into either growth or traditional value investing - rather, I factor in both into my thesis, revolving my theses on a large-scale picture instead of single catalysts.

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (3)

I have never understood the price. Business seems very good but the stock has always seemed expensive.
Great call, still probably about 30-40% overvalued even at today's stock price. Higher interest rates have a significant impact on infrastructure companies like this.
Quanta and peers are being rerated based on government spending, which will start ramping up next year and beyond. The stock will look incredibly cheap by then based on current share price.
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