Why Quanta Services (PWR) is a Top Stock for the Long-Term

Zacks' 'Focus List,' a long-term portfolio of 50 stocks selected based on upward earnings estimate revisions and high Zacks Ranks, has demonstrated significant outperformance, returning 2,519.23% cumulatively since 1996 compared to the S&P 500's 854.95%. Quanta Services (PWR), a leading electric utility infrastructure contractor, serves as a prime example of this strategy, having surged 255.11% to $396.02 since its December 2021 addition to the list at $111.52. This performance is underpinned by recent upward earnings estimate revisions from 11 analysts for FY2025, increasing the Zacks Consensus Estimate to $10.56, and a forecasted 17.7% earnings growth for the current fiscal year.

Analysis

Quanta Services (PWR) is exhibiting strong fundamental momentum, primarily driven by positive analyst sentiment regarding its future earnings. The company's stock has appreciated 255.11% to $396.02 since its inclusion in the Zacks Focus List in December 2021, a performance underpinned by its operational outlook. For fiscal year 2025, a consensus is building around higher profitability, with 11 analysts revising their earnings estimates upward in the last 60 days, raising the consensus estimate to $10.56. This is complemented by a robust forecast for the current fiscal year, with earnings projected to grow 17.7%, and a consistent track record of beating expectations, reflected by an average earnings surprise of 5.7%. However, despite these bullish long-term indicators, the stock currently holds a Zacks Rank of #3 (Hold), which suggests that near-term upside may be limited or that the stock's valuation now reflects the positive outlook following its significant run-up.

Key Decisions for Investors

• Investors with a long-term bullish thesis on infrastructure and utility services may find the consistent upward earnings revisions for FY2025 and 17.7% forecasted current-year growth as supportive of a core holding.
• The current Zacks Rank #3 (Hold) rating, despite a bullish long-term narrative, warrants caution for new capital, suggesting investors should scrutinize the stock's valuation following its 255% gain before initiating a position.
• Given that the investment thesis is explicitly tied to earnings estimate revisions, investors should closely monitor analyst consensus estimates for any change in trend, as this is the primary forward-looking indicator cited for PWR's performance.