Fabrice Cabaud Investment Thesis Based in Dallas, Texas, Primoris Services Corporation ( NYSE: PRIM ) is in the business of providing infrastructure services. Operating mainly in the U.S.
and Canada, the company offers a broad range of construction, replacement, fabrication, and engineering services to a diversified customer base through its two primary segments, (i) utilities and (ii) energy. I am particularly interested in the energy business for several reasons: It provides services to the LNG, electricity and construction markets and has notable tailwinds behind it from the global demand for data centres. PRIM's involvement in the development of data centres is a short-term competitive advantage as 1) total backlog is ~$10.
1Bn [slightly down YoY on the back of its record FY'23 number], and 2) new data facility starts are driving global electricity demand. PRIM's renewables portfolio is another structural differentiator to competing energy services providers that are scaled to traditional markets alone. Since FY'19, solar revenues grew ~10x versus ~2x growth for the broader market (Figure 1), with 14 customers vs.
just 1 back then. Industry economics suggest ~8% CAGR in US solar installations by FY'26E. As I think to US grid storage, projections are for +23% CAGR for US grid storage by FY'26E (Figure 2).
The thinking is renewables may play a role in preventing grid congestion and support more capacity. I can't say I disagree. Management noted it has 2-3 solar jobs in the p.
