QS Research · Michael Burry's Scion Capital analyst template · 2006
QUANTA SERVICES, INC. (PWR)
As of 2026-11-06 · 12/15 boxes filled from SEC filings and market data
Conclusion: SHORT
Conviction medium · base case -39% · downside -47% · upside +12%
I keep section 13's TTM-to-Sep-30-2026 base, because PWR has not had a down revenue year in FY2016-FY2025 and current EBITDA is the right earning stream; no cycle average is used. At 17x TTM EBITDA of $3.01B, above the top of the named peer range, EV is $51.17B, equity is $46.50B after $6.99B debt and $2.32B cash, or $308.60/share, -39.4% from $509.06. The record $63.7B backlog and raised FY2026 guide are real, but 27.1x EV/EBITDA and 45.6x P/E already discount them, while $983.6M of unapproved claims and flat 15% gross margins cap normalized earnings power. This is a short by the rule, with medium conviction because the 30x upside case is still positive but only +11.6%.
Key numbers
- Share price: $509.06
- Market cap: $76.70B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $37.29B
- EV / EBITDA (TTM): 27.1x
- P/E (TTM): 45.6x
- Price / book: 7.28x
The 15 boxes
- ✓ 1. Long-form business notes
Quanta grew from $11.20B of revenue in FY2020 to $28.48B in FY2025, with operating income rising from $611.4M to $1.61B (S24) — a utility-infrastructure contractor whose economics are labor, equipment utilization and contract estimating, not capital. The FY2020 (oldest) report shows two end-market segments — Electric Power Infrastructure Solutions ($7.77B revenue, $826.3M operating income, 10.6% of revenue) and Underground Utility and Infrastructure ($3.43B, $170.1M, 5.0%) — sized by emergency restoration, transmission work and pipeline cycles, and dragged by a Latin America exit ($74.0M operating loss) that is now gone. The FY2025 report shows a bigger, more concentrated contractor: ten customers are 30% of revenue, $983.6M of unapproved change orders/claims sit on the balance sheet, and $14.9B of performance bonds are outstanding. Cash generation funds the growth: operating cash flow $1.12B (FY2020) to $2.23B (FY2025) against capex of $260.1M to $609.2M.
- ✓ 2. Competitive advantage
Quanta has real scale assets — an approximately 80,000-unit equipment fleet at 2025-12-31, owned transformer manufacturing and its own craft-training institution — and the FY2025 10-K argues customers weight breadth, safety record and financial resources, which favours a large provider. But the same 10-K concedes the industries are 'highly competitive' with 'relatively few barriers to entry' in some lines, and the record shows no widening of the moat: revenue went from $11.20B (FY2020) to $28.48B (FY2025), roughly 2.5x, while gross margin stayed near 15% (14.8% to 15.0%) and operating margin near 5.5% (5.5% to 5.7%). That is a volume-and-acquisition story, not a pricing-power story.
- ✓ 3. 10-Q takeaways
Q3 2026 (quarter ended 2026-09-30) revenue was $12.014877B, up 57.4% y/y, with Electric up 58.8% and Underground and Infrastructure up 51.8%; gross margin was 16.7% vs 15.9%, and operating income was $1.026547B (8.5% margin) vs $517.217M (6.8%). Nine-month 2026 operating cash flow was $2.94B (+167%), cash and equivalents were $2.315271B at 2026-09-30, and backlog/RPO were $63.73B/$41.75B, up 44.9%/75.7% from 2025-12-31. The 10-Q gives demand outlook via backlog but no formal revenue/EPS guidance; it also does not disclose a Q3 buyback dollar amount.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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