Portfolio: Zacks Focus List

Quanta Services is North America’s dominant specialty contractor for electric power infrastructure, with its Electric segment generating >80% of revenue. Its moat is structural: the largest skilled craft workforce in the industry, self-perform capability, a massive owned equipment fleet, and decades-long utility relationships formalized through master service agreements, which creates recurring revenue. Utilities facing an aging grid cannot replicate this capacity in-house, giving Quanta durable pricing power and market share in a fragmented industry it continues consolidating through disciplined M&A.

The opportunity is secular and accelerating: AI data-center power demand, grid modernization, electrification, and renewables interconnection are driving a multi-decade utility capex supercycle. Fundamentals confirm it — Q2 2026 revenue rose 41% to $9.56B, backlog hit a record $53.4B (+49% y/y, ~1.35× forward revenue), and remaining performance obligations reached $33.6B. Management raised FY2026 guidance to $39.3–39.7B revenue, $4.09–4.21B adjusted EBITDA, and $16.45–16.95 adjusted EPS, with $2.0–2.5B free cash flow. Margin expansion from a richer transmission/data-center mix, plus backlog visibility into 2028+, supports sustained double-digit earnings compounding. Key risks: labor availability, project timing, and utility capex cyclicality.