PWR

Quanta is a genuinely high-quality compounder. Revenue has more than doubled from $13.0B (FY2021) to $28.5B (FY2025), with FY2025 up 20.3% and diluted EPS up 12.8% to $6.80, all while throwing off $2.23B of operating cash flow. The forward picture is even stronger than the trailing numbers: per the MD&A, backlog reached $43.98B (+27.3%) and remaining performance obligations $23.76B (+41.8%) at year-end — roughly 1.5x annual revenue of visible work. Management ties this to durable secular drivers: data-center power demand, electrification, multi-year grid modernization and hardening, domestic reshoring and renewables, with the Cupertino Electric (CEI) and Dynamic Systems (DSI) acquisitions deepening exposure to data-center, semiconductor and large-load construction. On the fundamentals lens, this is a clear winner.

The catch is the kind of business this is. Margins are thin and structurally so — 15.0% gross, 5.7% operating, 3.6% net — and ROE of 11.5% is being earned with rising leverage: liabilities grew 40.0% (L/E now 1.78x), cash fell 40.8% to $440M, the current portion of debt jumped over elevenfold, and $3.30B was deployed on M&A funded partly by a $1.5B senior-notes issuance in August 2025. The risk factors are candid that larger, higher-margin complex projects carry performance and regulatory-delay risk, that MSA customers are not committed to specific volumes, and that demand hinges on renewable tax credits, customer capex, interest rates and tariffs — all outside Quanta's control.