Down 25% in 2026, Can Primoris Services Stock Recover?

Key Takeaways:

• Infrastructure Demand: Primoris holds $11.6 billion in total backlog, with verbal awards of nearly $800 million in natural gas generation alone.
• Price Projection: Based on current execution, PRIM stock could reach $124 by December 2028.
• Potential Gains: That target points to a 26% total return from the current price of $98.65.
• Annual Return: Investors could see roughly 9% growth each year over the next 2.5 years.

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Primoris Services (PRIM) had a difficult Q1 in 2026. A small number of solar projects ran into cost overruns tied to labor issues, project redesigns, and weather disruptions.

Revenue fell 5.4% to $1.6 billion, and gross margins compressed to 8.6%. The rest of the portfolio told a different story.

• Utilities segment revenue rose 12.3%, with Power Delivery delivering double-digit margin growth.
• Pipeline Services revenue grew more than 20% year-over-year.
• Full-year adjusted EPS guidance is $4.80 to $5.00, with adjusted EBITDA of $480 to $500 million.
• Primoris closed the PayneCrest acquisition on May 1, adding a data center-focused electrical contractor with roughly 40% hyperscaler revenue exposure.
• Renewable energy funnel now exceeds $15 billion across 2026 and beyond.

Despite the solar setback, Primoris trades at $98.65 and remains one of the best-positioned infrastructure contractors for the AI and energy buildout of this decade.

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What the Model Says for Primoris Stock

We looked at Primoris as an infrastructure services company sitting at the intersection of three powerful spending cycles: renewable energy, data center build-outs, and natural gas generation.

The Q1 solar problems were real but contained. Management identified six projects, all bid in 2024, that ran into execution issues in newer geographies.

Most will reach completion within weeks. The final one closes in Q4. Importantly, no new contracts have been signed in those geographies since mid-2024.

Beyond solar, the business looks strong. The utilities backlog grew by $476 million in a single quarter, driven by MSA renewals in Power Delivery.

Natural gas generation, which management calls the most favorable market in more than a decade, has $7.1 billion in identified opportunities.

PayneCrest adds direct data center exposure inside the facility, complementing Primoris’s existing enabling infrastructure work, which generated over $400 million in bookings in Q1 alone.

Using 6.7% annual revenue growth and 5.3% operating margins, our model projects the stock reaching $124 within 2.5 years. This assumes an 18x price-to-earnings multiple, slightly below the current forward P/E of 19.2x. The modest compression reflects execution risk as new awards ramp.

Our Valuation Assumptions

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Our Valuation Assumptions

TIKR’s Valuation Model lets you plug in your own assumptions for a company’s revenue growth, operating margins, and P/E multiple, and calculates the stock’s expected returns.

Here’s what we used for PRIM stock:

1. Revenue Growth: 6.7%

Primoris has grown its revenue more than 15% annually over the past five years.

The near-term slowdown reflects solar project timing and a reduction in Renewables revenue from $3 billion to $2.3 billion for 2026.

Beyond this year, management expects the Energy segment book-to-bill to exceed 1x for full-year 2026, with the bulk of awards landing in the second half.

2. Operating margins: 5.3%

Utilities margins are expanding toward the 10–12% target range. Energy margins should recover to the high 9% to low 10% by year-end.

PayneCrest, with stronger margins than legacy solar work, improves the mix going forward.

3. Exit P/E Multiple: 18x

Primoris currently trades near 19x forward earnings. We assume slight compression to 18x.

As execution on natural gas and renewables improves, the stock could re-rate higher.

Historical averages have ranged from 14x to 24x depending on market conditions.

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What Happens If Things Go Better or Worse?

Infrastructure contractors face project execution risk and commodity cycles. Here’s how Primoris stock might perform under different scenarios through December 2030:

• Low Case: If revenue grows 6.7% a year and net margins settle near 3.7%, investors see a 23.2% total return (4.7% annually).
• Mid Case: With 7.5% growth and 4% margins, the model points to a 54.4% total return (10% annually).
• High Case: If gas generation and data center awards accelerate to 8.2% growth and margins reach 4.2%, returns could hit 87.1% total (14.7% annually).

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The range reflects a company navigating a temporary setback against a very strong long-term demand backdrop.

In the low case, further solar execution problems emerge and natural gas project delays persist longer than expected.

In the high case, PayneCrest wins additional hyperscaler scope, gas generation awards convert quickly, and the Renewables business returns to its prior trajectory in 2027.

How Much Upside Does Primoris Stock Have From Here?

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All it takes is three simple inputs:

• Revenue Growth
• Operating Margins
• Exit P/E Multiple

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Disclaimer:

Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!