Infrastructure construction company Primoris (NYSE: PRIM) missed Wall Street’s revenue expectations in Q2 CY2026, with sales falling 10.7% year on year to $1.69 billion. Its non-GAAP loss of $0.27 per share was 24% above analysts’ consensus estimates.

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Company Overview

Listed on the NASDAQ in 2008, Primoris (NYSE: PRIM) builds, maintains, and upgrades infrastructure in the utility, energy, and civil construction industries.

Revenue Growth

A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last five years, Primoris grew its sales at an incredible 15.5% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers, a helpful starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Primoris’s annualized revenue growth of 10% over the last two years is below its five-year trend, but we still think the results suggest healthy demand.

We can dig further into the company’s revenue dynamics by analyzing its backlog, or the value of its outstanding orders that have not yet been executed or delivered. Primoris’s backlog reached $13.86 billion in the latest quarter and averaged 75.5% year-on-year growth over the last two years. Because this number is better than its revenue growth, we can see the company accumulated more orders than it could fulfill and deferred revenue to the future. This could imply elevated demand for Primoris’s products and services but raises concerns about capacity constraints.

This quarter, Primoris missed Wall Street’s estimates and reported a rather uninspiring 10.7% year-on-year revenue decline, generating $1.69 billion of revenue.

Looking ahead, sell-side analysts expect revenue to grow 8.1% over the next 12 months, a slight deceleration versus the last two years. Despite the slowdown, this projection is above the sector average and suggests the market is forecasting some success for its newer products and services.

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Operating Margin

Primoris was profitable over the last five years but held back by its large cost base. Its average operating margin of 4.4% was weak for an industrials business. This result isn’t too surprising given its low gross margin as a starting point.

Analyzing the trend in its profitability, Primoris’s operating margin decreased by 1.8 percentage points over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. Primoris’s performance was poor no matter how you look at it - it shows that costs were rising and it couldn’t pass them onto its customers.

This quarter, Primoris generated an operating margin profit margin of negative 1.6%, down 8.3 percentage points year on year. Since Primoris’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Primoris’s EPS grew at an unimpressive 6.5% compounded annual growth rate over the last five years, lower than its 15.5% annualized revenue growth. This tells us the company became less profitable on a per-share basis as it expanded.

We can take a deeper look into Primoris’s earnings to better understand the drivers of its performance. As we mentioned earlier, Primoris’s operating margin declined by 1.8 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its lower earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

For Primoris, its two-year annual EPS declines of 1.5% show it’s continued to underperform. These results were bad no matter how you slice the data.

In Q2, Primoris reported adjusted EPS of negative $0.27, down from $1.68 in the same quarter last year. Despite falling year on year, this print easily cleared analysts’ estimates. Over the next 12 months, Wall Street expects Primoris’s full-year EPS to grow 24.6% from $3.28 to $4.09.

Key Takeaways from Primoris’s Q2 Results

We were impressed by how significantly Primoris blew past analysts’ EBITDA expectations this quarter. We were also glad its full-year EBITDA guidance trumped Wall Street’s estimates. On the other hand, its revenue missed. Overall, we think this was a solid quarter with some key areas of upside. Investors were likely hoping for more, and shares traded down 1.7% to $90.25 immediately after reporting.

Should you buy the stock or not? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).