Can Primoris's Data Center Strategy Power a New Phase of Growth?

Primoris Services Corporation PRIM is doubling down on a fast-rising growth market by positioning itself as a critical partner in the data center buildout. Management noted that Primoris is seeing growing opportunities tied to data centers and highlighted this as an emerging area of focus.

At the center of this strategy is a $1.7 billion pipeline of potential data center work, with $400-$500 million already shortlisted and expected to be contracted by year-end. While less than 10% of revenue is tied to data centers, Primoris is offering a broad portfolio of services that extend beyond the walls of the facility, including site preparation, power generation, utility infrastructure, and fiber construction. With demand outpacing supply for contractors capable of delivering at scale, management believes Primoris is well-positioned to capture its “fair share” of this multiyear opportunity.

Primoris also emphasized that most of these projects would be incremental to its base plan, rather than a redeployment of existing resources. The company’s industrial workforce is well-suited for this type of work, giving it flexibility to scale without major organizational shifts. Importantly, the demand backdrop extends beyond just data centers: utilities are embarking on extensive power delivery programs, while natural gas and solar generation projects — with a pipeline exceeding $2.5 billion — are adding further momentum to the company’s bidding activity.

By leveraging its integrated model across energy, utilities, and communications, Primoris is creating opportunities to grow backlog and expand margins. In an environment where regulatory complexity and infrastructure needs are rising in tandem, these capabilities provide an efficient lever for sustained earnings growth. With record second-quarter results showcasing double-digit revenue gains and higher profitability in Utilities, the data center wave could become the company’s next major growth engine.

How It Stacks Up Against Competitors

Quanta Services, Inc. PWR is extending its leadership in large-scale power delivery and grid modernization programs. Management reported a record backlog in the second quarter of 2025, underpinned by transmission, substation, and renewable interconnection work. Quanta continues to emphasize its craft-skilled, self-perform model as a differentiator, positioning the company as a go-to partner for hyperscalers and utilities seeking turnkey solutions to power-hungry data centers. Executives highlighted data centers and AI-driven load growth as structural demand drivers, reinforcing confidence in sustained multi-year growth.

MasTec, Inc. MTZ is sharpening its competitive edge in communications and clean energy infrastructure. In the second quarter of 2025, management pointed to a record backlog, with fiber and middle-mile projects tied directly to hyperscaler investment. The company underscored robust bookings in its Clean Energy & Infrastructure segment, where solar and transmission awards continue to accelerate. MasTec framed the communications and energy transition opportunity set as “multi-decade,” citing strong visibility into fiber-to-the-home programs, long-haul connectivity, and grid-hardening initiatives. These dynamics are expected to support backlog conversion and margin expansion in the years ahead.

PRIM’s Price Performance, Valuation & Estimates

Shares of Primoris have rallied 66.5% in the past three months compared with the industry’s growth of 27.1%.

PRIM Three-Month Price Performance

From a valuation standpoint, PRIM trades at a forward price-to-earnings ratio of 23.17, above the industry’s average of 21.89.

The Zacks Consensus Estimate for PRIM 2025 and 2026 earnings implies a year-over-year uptick of 24.8% and 13.9%, respectively. The EPS estimates for fiscal 2025 and 2026 have increased in the past 60 days.

PRIM stock currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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