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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Primoris Services Corporation (XNAS:PRIM) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
PRIM
Name:
PRIMORIS SERVICES CORPORATION (XNAS:PRIM)
Sector:
- 26588.00K
Industry:
Engineering & Construction
CEO:
Mr. Thomas McCormick
Total Employees:
1,925
Our Technological Advancement Rating
Our Rating:
A
Technological advancement compared to industry is 91.97% higher
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF PRIMORIS SERVICES CORPORATION(PRIM) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND ENGINEERING & CONSTRUCTION INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
19.69
One Month Price Target:
$19.81
Six Month Price Target :
$20.42
Likely Price in One Year's Time:
Ticker:
$21.15
Likely Trading Range Today Under (Normal Volatility)
$19.58
Price Upper limit ($) :
$19.81
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$18.31
This week:
$16.61
This month :
$13.52
Other Primary facts
Market Cap:
1.02B
Market Cap Classification:
Small Cap
Number of Shares
IPO Date:
53.21M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
17.74%
-35.04%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$26.09
$23.16
$13.29
$16.22
Medium risk (<10%) entry points
Buy Call
Sell Call
$22.21
Buy Put:
Sell Put:
$21.58
$17.16
$17.80
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
PRIM
Sharpe Ratio:
1.02%
Comparison:
PRIM, is amongst the top 60% stocks with highest risk-adjusted returns
Sharpe ratio is -74.40% lower than the industry
& is -55.39% lower than the market/S&P 500 average
Average Returns/Yield of
PRIM
Daily returns:
0.04%
Weekly returns:
0.22%
Monthly returns:
0.88%
Yearly returns:
37.49%
Comparison of returns:
Average annual returns/yield (last 3 years) is -71.99% below industry average
Classification:
PRIM, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.72
Statistical test of Returns:
PRIM has yielded returns statistically similar to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
3.43%
Weekly Volatility:
7.68%
Monthly Volatility:
15.35%
Yearly Volatility:
53.18%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
1.03%
Volatility in last five trading days has been -70.01% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-7.01%
Weekly VaR:
-15.67%
Monthly VaR:
-31.33%
How Much Can the price of
PRIM
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-27%
Worst case (decline):
>85%
This translates to price declining to:
$14.33
This translates to price declining to:
$2.95
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
PRIM is a 121.13% riskier investment compared to the market/S&P 500 & is 89.44% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is 0.82% above industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
PRIM
Beta in relation to market/S&P 500--1.10
Expected beta in 1 year's time:
0.725
Expected beta in 3 year's time:
1.025
Unlevered (debt free) Beta:
0.719
Beta in relation to Nasdaq (XNAS):
0.701
Beta in relation to all global stocks::
0.952
Beta Comparison & Analysis
Beta of competitors/peers::
1.215
Beta is -9.32% lower than peers
Average Industry Beta:
1.325
Beta is -16.85% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
11.91%
Sustainable growth rate is -13.82% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
-0.002
Alpha is -100.78% below industry average alpha yield
Alpha is -13% below the market average
Analysis of Cost of Capital of
PRIM
Equity cost of capital:
0.107
Equity cost of capital is -12.51% below industry mean WACC
Unlevered (without debt) cost of capital:
6.98%
Before-tax cost of debt:
2.06%
After-tax cost of debt:
1.63%
Overall debt rating:
Highest AAA investment grade
Weighted average cost of capital (WACC):
1.63%
WACC is -8.22% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$65.09
Revenue growth rate per share of (3Y):
1.06
Annual revenue growth rate is -73.20% below industry average
EPS:
$1.99
Expected Annual growth rate of EPS (3Y):
10.23%
Expected future EPS growth rate is -20.26% lower than the Engineering & Construction industry
Free cash flow (FCF) per share:
-
Balance sheet equity growth per share: -2.78%
Equity growth rate per share is -155.10% lower than the industry
Debt per share
$12.89
EBITDA per share
$4.86
Valuation Analysis Today of
PRIM
P/E Ratio:
8.73
P/E Ratio of Competitors/Peers:
585.03
P/E ratio is -98.51% lower than main peers & is -69.89% lower than the industry
Stock price/value with industry average P/E ratio: $57.71
PRIM is -65.88% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $163.11
Present value of the expected future dividends only: $2.24
P/S (Price to Sales ratio):
0.3
Price to sales ratio is -95.10% below the industry mean
P/B (Price to book value ratio):
1.06
-
Price to free cash flow ratio is 124.13% higher than the industry
Net income growth rate (3Y):
42.54%
Net income growth rate is -689.92% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 2.95%
Dividend yeild: 1.22%
Previous Dividend: $0.06
Previous adjusted dividend: $0.06
Previous Dividend: $0.24
-
-
Average dividend payment (long-term): $0.06
Average dividend increase/decrease (growth rate) % per period: 0.00%
Expected next dividend payment date: 13/10/2022
Expected next dividend record date: 28/09/2022
-
Previous dividend payment date: 15/07/2022
Previous dividend record date: 30/06/2022
-
Dividend History:
2022-06-29--$0.06
2021-12-30--$0.06
2021-06-29--$0.06
2022-03-30--$0.06
2021-09-29--$0.06
2021-03-30--$0.06
-
In-depth Debt & Leverage Analysis
Debt to equity ratio:
69.43%
Net debt to equity ratio:
64.55%
Debt to assets ratio:
26.40%
Net debt to assets ratio:
24.55%
Debt-to-asset ratio is -50.34% below industry average
Ability to repay debt:
Interest coverage ratio:
15.46
Interest coverage ratio is -36.47% less than industry average
Looking forward:
Debt growth rate:
695.78%
Annual debt growth is 334% higher than industry average debt growth rate
Debt repayment rate in last quarter: 3.72%
Analysis of Key Statistics
Correlation of price movement with the market:
0.462
Statistical significance of correlation:
PRIM has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.523
Stock price is -11.63% less correlated with the market compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.523
Correlation of price movement with Nasdaq (^IXIC):
-0.02
Covariance of price movement with the market:
-0.039
Kurtosis
21.715
Returns have severe fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are considerably more likely, compared to assets with normally distributed returns
Skewness of returns:
-1.749
Returns are left (negative) skewed; mean returns are lower than median and mode returns
Fundamental Analysis & Dupont Analysis of
PRIM
Gross Profit Margin Ratio:
45%
Operating Profit Margin Ratio:
4.56%
Operating profit margin is -133.15% lower than the industry
Net Profit Margin Ratio:
45%
Effective Tax Rate:
23.43%
Effective tax rate is 13.17% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
10.94%
Return on equity (ROE) is -6.81% lower than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
4.16%
Return on assets (ROA) is 1.10% higher than the industry
Financial Leverage:
1.4x
Current Ratio:
1.44
Current ratio is -48.88% below industry average
Cash Conversion Cycle (days):
16.8
Cash conversion cycle is -64.42% below industry average
The remaining useful life of property plant & equipment is: 2.6 years
Stock based compensation to net income ratio:
1.44%
In-depth Efficiency Analysis
Revenue generated per employee:
1.8M
Each employee generates 199% more revenue than industry average revenue per employee
EBITDA generated per employee:
134.5K
Each employee generates 259% more EBITDA than industry average revenue per employee
Profit generated per employee:
56.1K
Each employee generates -8702% less net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
- 13.8K
Each employee generates 115% more free cash flow than industry average revenue per employee
Assets/Capital per employee
718.6K
Each employee generates 115% more free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
PRIM
CATM
ICF INTERNATIONAL, INC. (XNAS:ICFI)
TPI COMPOSITES, INC. (XNAS:TPIC)
ENCORE WIRE CORPORATION (XNAS:WIRE)
VIEW, INC (XNAS:VIEW)
CONSTRUCTION PARTNERS, INC. (XNAS:ROAD)
AIR TRANSPORT SERVICES GROUP, INC. (XNAS:ATSG)
ASTEC INDUSTRIES, INC. (XNAS:ASTE)
OMEGA FLEX, INC. (XNAS:OFLX)
Current Analyst Ratings
Strong buy�4%
Buy�4%
Hold�25%
Sell�0%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
3.46B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
3.07B
392.97M
-
-
232.13M
-
-
232.13M
5.00K
16.74M
100.88M
258.82M
158.01M
108.09M
141.33M
33.11M
108.09M
Statement of Cash Flow
Date:
Period:
20.17M
Differed Income Tax :
-
Stock Based Compensation :
1.55M
Change in Working Capital :
- 6385.00K
Accounts Receivables:
25.69M
Other Working Capital:
51.71M
Other Non-Cash Items:
- 7089.00K
Net Cash Provided by Operating Activities:
6.58M
Investments in PP&E:
- 33165.00K
Net Acquisitions:
- 4063.00K
Purchases of Investments:
-
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
173.51M
-
173.51M
920.32M
-
120.33M
1.21B
603.64M
583.53M
167.71M
-
1.34M
27.06M
1.38B
-
2.60B
289.56M
125.31M
6.73M
292.42M
136.93M
844.22M
685.76M
41.17M
765.45M
-
1.61B
6.00K
722.56M
1.7M
-
March 31, 2022 at 6:00:00 AM
3.30B
987.76M
2.60B
-
811.07M
637.6M
-
4.35M
- 32874.00K
- 26462.00K
422.00K
-
- 3192.00K
28.01M
- 1226.00K
502.00K
- 27021.00K
178.62M
205.64M
6.58M
- 33165.00K
- 26588.00K
Our Proprietary Portfolio Rating
Our Rating:
B
Price Forecast/Expected Price in Next 5 Years of
PRIM
2023
2024
2025
2026
2027
$21.26
$363.94
$390.88
$419.83
$450.92