What Happened?
Shares of infrastructure construction company Primoris (NYSE: PRIM) fell 6.7% in the morning session after the company reported third-quarter results that beat revenue and profit estimates but also revealed a concerning drop in profitability. Primoris announced a 32.1% year-over-year increase in revenue to $2.18 billion, and its adjusted earnings per share of $1.88 easily surpassed analyst expectations. The company also raised its financial outlook for the full year. However, investors appeared to focus on a key detail beneath the surface. Gross profit margin, a measure of core profitability, fell to 10.8% from 12.0% in the same period last year. The shrinking margin likely raised concerns about future profitability, overshadowing the otherwise strong quarterly performance and positive guidance.
The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Primoris? Access our full analysis report here.
What Is The Market Telling Us
Primoris’s shares are somewhat volatile and have had 13 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.
The previous big move we wrote about was 20 days ago when the stock dropped 3.1% on the news that Guggenheim downgraded the stock to Neutral from a Buy rating. The analyst noted that the company's upcoming third-quarter report was unlikely to push the stock higher. This view was based on the performance of Primoris' power delivery business, which often benefited from weather-related damage to electric utility infrastructure. With an absence of violent summer weather, that business segment was not expected to provide a strong catalyst. The firm also pointed out that the shares had already increased more than 80% in 2025.
Primoris is up 74% since the beginning of the year, and at $133.76 per share, it is trading close to its 52-week high of $144.26 from October 2025. Investors who bought $1,000 worth of Primoris’s shares 5 years ago would now be looking at an investment worth $6,963.
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