Monday, a new coverage on Centuri Holdings Inc (NYSE:CTRI) was initiated by KeyBanc with a Sector Weight rating.
The firm highlighted Centuri's focus on the growing sectors of Electric and Gas Transmission & Distribution (T&D) and its involvement in clean energy infrastructure and 5G.
Since its initial public offering (IPO) on April 22, 2024, at $21 per share, Centuri's stock has appreciated by 21%, outperforming the Industrial Select Sector SPDR Fund's (XLI) 4% increase during the same period.
KeyBanc's rating is based on valuation, and the firm notes that Centuri's exposure to T&D megatrends has been recognized by the market, as evidenced by the stock's strong performance post-IPO. The company's small-ticket Master Service Agreement (MSA) leveraged portfolio is cited as offering a lower risk profile, which has likely contributed to investor interest.
Centuri's current trading value is approximately 11 times its estimated 2025 Earnings Before Interest, Taxes, Depreciation, and Amortization (EBITDA), which aligns with the average multiples of its closest peers. The peers mentioned by KeyBanc include Quanta Services Inc. (NYSE:PWR), MasTec Inc . (NYSE:NYSE:MTZ), Primoris Services (NYSE:PRIM) Corporation (NASDAQ:PRIM), and MYR Group Inc. (NASDAQ:MYRG).
The coverage initiation by KeyBanc provides investors with an assessment of Centuri's market value in relation to its growth potential in the T&D space, clean energy infrastructure, and 5G, while also comparing it to industry peers.
InvestingPro Insights
As Centuri Holdings Inc (NYSE:CTRI) garners attention with its focus on key growth sectors, InvestingPro data and tips shed further light on the company's performance and potential. With a market capitalization of $2.25 billion and a revenue growth of 5.03% in the last twelve months as of Q4 2023, Centuri is making strides in the industry. Despite not being profitable over the last twelve months, the company’s liquid assets exceed its short-term obligations, indicating a solid liquidity position. Additionally, Centuri's gross profit margin stands at 9.43%, which is a point of concern as it reflects weak gross profit margins according to InvestingPro Tips.
InvestingPro Tips also highlight that Centuri is trading near its 52-week high with the price at 97.35% of this threshold, suggesting a strong market sentiment. However, the Relative Strength Index (RSI) suggests the stock is in overbought territory, which is an important consideration for potential investors. Moreover, the company does not pay a dividend, which could influence the investment decisions of income-focused shareholders.
For investors seeking a more comprehensive analysis, there are additional InvestingPro Tips available that can provide deeper insights into Centuri's financial health and market position. Utilize the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. The full suite of tips can be accessed at: https://www.investing.com/pro/CTRI, offering valuable perspectives for those evaluating Centuri's stock.
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