Why Centuri Holdings Is On Investors’ Radar
Centuri Holdings (CTRI) has drawn fresh attention after recent trading, with the stock showing positive moves over the past week, month and past 3 months, prompting investors to reassess its utility infrastructure-focused story.
See our latest analysis for Centuri Holdings.
At a share price of $27.80, Centuri’s recent 4.2% 1 day share price return and 10.6% 30 day share price return contribute to a 90 day move of 38.2%, while the 1 year total shareholder return of 27.2% points to momentum that has been building rather than fading.
If Centuri’s recent gains have you thinking about where else capital might work hard, this could be a useful moment to check out aerospace and defense stocks.
With the stock at $27.80 against an analyst price target of $25.50, and traditional models suggesting a premium rather than a discount, an important question arises: is there still a buying opportunity here, or is the market already pricing in future growth?
Price-to-Sales of 1x: Is It Justified?
On a P/S of 1x at the last close of $27.80, Centuri looks slightly cheaper than both its peers and the broader US Construction sector on this single metric.
The P/S ratio compares a company’s market value to its revenue, which can be useful for businesses like Centuri that have only recently moved into profitability. With revenue of about $2.8b supporting a 1x P/S, the market is valuing each dollar of sales a little below what similar construction names are priced at.
Against a peer average P/S of 1.1x and a US Construction industry average of 1.3x, Centuri trades at a discount, which suggests the market is pricing its sales more conservatively than the sector. However, the estimated fair P/S ratio of 0.8x indicates that, if pricing shifted toward that level, today’s multiple could still be on the rich side.
Explore the SWS fair ratio for Centuri Holdings
Result: Price-to-Sales of 1x (ABOUT RIGHT)
However, you still have to weigh risks such as a share price already above the US$25.50 analyst target and relatively thin net income of about US$2.5m on US$2.8b revenue.
Find out about the key risks to this Centuri Holdings narrative.
Another View: What Our DCF Model Says
While the 1x P/S ratio suggests Centuri looks roughly in line with its sales power, our DCF model points in a different direction. At a share price of $27.80 versus an estimated fair value of $16.82, the stock screens as expensive on a cash flow basis. This raises the question of how much optimism is already in the price.
Look into how the SWS DCF model arrives at its fair value.
Simply Wall St performs a discounted cash flow (DCF) on every stock in the world every day (check out Centuri Holdings for example). We show the entire calculation in full. You can track the result in your watchlist or portfolio and be alerted when this changes, or use our stock screener to discover 863 undervalued stocks based on their cash flows. If you save a screener we even alert you when new companies match - so you never miss a potential opportunity.
Build Your Own Centuri Holdings Narrative
If this view does not quite line up with your own thinking, or you would rather test the numbers yourself, you can build a personalised thesis using Do it your way in just a few minutes.
A great starting point for your Centuri Holdings research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
Looking for more investment ideas?
Centuri might be on your radar now, but you do not need to stop there. Use this momentum to line up your next potential opportunities.
- Spot potential value opportunities early by checking out these 863 undervalued stocks based on cash flows that currently trade below what their cash flows may suggest.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
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