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Quanta's (PWR) Shares Rise 8% Following CEI Acquisition
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Quanta Services, Inc. (PWR - Free Report) unveiled that it acquired San Jose, CA-based Cupertino Electric, Inc. (CEI) for approximately $1.54 billion. The deal combines $1.3 billion in cash and 883,000 shares of Quanta common stock valued at roughly $225 million. The deal, finalized on Jul 17, also includes a potential earnout of up to $200 million based on future financial performance targets.
Acquisition Synergies
The integration of CEI’s skilled workforce and management aligns seamlessly with Quanta’s culture. This acquisition will enable both companies to provide comprehensive electrical infrastructure solutions, from power generation to transmission and consumption, benefiting utilities and large power consumers. Additionally, CEI's low-voltage electrical capabilities will help diversify and expand Quanta’s offerings. CEI’s strong project backlog and vibrant end markets are expected to enhance Quanta's growth, cash flow, returns, and earnings per share (EPS).
Quanta will also gain access to CEI's established mid-market utility-scale solar and battery storage platforms, complementing its existing renewable energy capabilities.
PWR expects CEI to contribute revenues of $1-$1.1 billion and adjusted EBITDA of $80-$90 million for the rest of this year. For 2025, CEI is projected to generate $2.325-$2.425 billion of revenues, $175-$195 million of adjusted EBITDA and 40-50 cents of adjusted EPS.
About CEI
Founded in 1954, CEI is a premier provider of electrical infrastructure solutions, offering turnkey services to the technology, renewable energy, infrastructure, and commercial sectors. With a workforce of approximately 4,300 employees, CEI provides engineering, procurement, project management, construction, and modularization services to a diverse customer base in the United States.
CEI has demonstrated strong financial performance, achieving double-digit compound annual growth rates in both revenues and net income over the past four years. In 2024, CEI is expected to generate $2.1-$2.2 billion in revenues and $155-$175 million in adjusted EBITDA.
Price Performance
Following the announcement, PWR’s stock rallied 8.1% on Jul 18. In the past six months, shares of this Zacks Rank #4 (Sell) company have gained 30.1% compared with the Zacks Engineering - R and D Services industry’s 32.5% growth.
Image Source: Zacks Investment Research
Quanta continues to leverage its solid project execution strategy and three-pronged growth plan, focusing on timely project delivery, expanding core business services, and exploring new service lines to exceed customer expectations.
Key Picks
Some better-ranked stocks in the Zacks Construction sector are:
FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The Zacks Consensus Estimate for FLR’s 2024 sales and EPS indicates growth of 14.3% and 5.5%, respectively, from the prior-year levels.
Great Lakes Dredge & Dock (GLDD - Free Report) currently carries a Zacks Rank of 2 (Buy). It has a trailing four-quarter earnings surprise of 184.3%, on average.
The consensus estimate for GLDD’s 2024 sales and EPS implies increases of 26.7% and 414.3%, respectively, from the prior-year reported levels.
Dycom Industries (DY - Free Report) currently holds a Zacks Rank of 2.
DY delivered a trailing four-quarter earnings surprise of 30.2%, on average. The Zacks Consensus Estimate for DY’s fiscal 2025 sales and EPS indicates an improvement of 10.2% and 8.1%, respectively, from a year ago.
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Quanta's (PWR) Shares Rise 8% Following CEI Acquisition
Quanta Services, Inc. (PWR - Free Report) unveiled that it acquired San Jose, CA-based Cupertino Electric, Inc. (CEI) for approximately $1.54 billion. The deal combines $1.3 billion in cash and 883,000 shares of Quanta common stock valued at roughly $225 million. The deal, finalized on Jul 17, also includes a potential earnout of up to $200 million based on future financial performance targets.
Acquisition Synergies
The integration of CEI’s skilled workforce and management aligns seamlessly with Quanta’s culture. This acquisition will enable both companies to provide comprehensive electrical infrastructure solutions, from power generation to transmission and consumption, benefiting utilities and large power consumers. Additionally, CEI's low-voltage electrical capabilities will help diversify and expand Quanta’s offerings. CEI’s strong project backlog and vibrant end markets are expected to enhance Quanta's growth, cash flow, returns, and earnings per share (EPS).
Quanta will also gain access to CEI's established mid-market utility-scale solar and battery storage platforms, complementing its existing renewable energy capabilities.
PWR expects CEI to contribute revenues of $1-$1.1 billion and adjusted EBITDA of $80-$90 million for the rest of this year. For 2025, CEI is projected to generate $2.325-$2.425 billion of revenues, $175-$195 million of adjusted EBITDA and 40-50 cents of adjusted EPS.
About CEI
Founded in 1954, CEI is a premier provider of electrical infrastructure solutions, offering turnkey services to the technology, renewable energy, infrastructure, and commercial sectors. With a workforce of approximately 4,300 employees, CEI provides engineering, procurement, project management, construction, and modularization services to a diverse customer base in the United States.
CEI has demonstrated strong financial performance, achieving double-digit compound annual growth rates in both revenues and net income over the past four years. In 2024, CEI is expected to generate $2.1-$2.2 billion in revenues and $155-$175 million in adjusted EBITDA.
Price Performance
Following the announcement, PWR’s stock rallied 8.1% on Jul 18. In the past six months, shares of this Zacks Rank #4 (Sell) company have gained 30.1% compared with the Zacks Engineering - R and D Services industry’s 32.5% growth.
Image Source: Zacks Investment Research
Quanta continues to leverage its solid project execution strategy and three-pronged growth plan, focusing on timely project delivery, expanding core business services, and exploring new service lines to exceed customer expectations.
Key Picks
Some better-ranked stocks in the Zacks Construction sector are:
Fluor Corporation (FLR - Free Report) currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
FLR delivered a trailing four-quarter earnings surprise of 51.3%, on average. The Zacks Consensus Estimate for FLR’s 2024 sales and EPS indicates growth of 14.3% and 5.5%, respectively, from the prior-year levels.
Great Lakes Dredge & Dock (GLDD - Free Report) currently carries a Zacks Rank of 2 (Buy). It has a trailing four-quarter earnings surprise of 184.3%, on average.
The consensus estimate for GLDD’s 2024 sales and EPS implies increases of 26.7% and 414.3%, respectively, from the prior-year reported levels.
Dycom Industries (DY - Free Report) currently holds a Zacks Rank of 2.
DY delivered a trailing four-quarter earnings surprise of 30.2%, on average. The Zacks Consensus Estimate for DY’s fiscal 2025 sales and EPS indicates an improvement of 10.2% and 8.1%, respectively, from a year ago.