SOLV Energy Inc. Class A Common Stock (MWH)

FairStock Score: 53/100 — MIXED

Key Financials

Strengths

• Generates $320 million in annual free cash flow (4.2% yield on market cap)
• Strong Piotroski F-Score of 7/9 indicating robust financial health across profitability, leverage, and efficiency metrics
• High return on equity of 35.3% demonstrating efficient capital deployment
• Revenue growth of 80.0% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($6) with negative 515% margin of safety—limited downside protection

AI Analysis

SOLV Energy Inc. Class A Common Stock is a small-cap utilities company valued at $7.7 billion. The business generates $2.5 billion in annual revenue with a 1.4% net margin and $320 million in free cash flow. From a quality standpoint, SOLV shows solid Piotroski F-Score of 7/9 and healthy Altman Z-Score of 3.8. On valuation, the stock is commanding a steep 50.2x multiple, with trades far above its Graham Number ($6) with no margin of safety. Growth dynamics show revenue growing at 80.0% and profit growth of 35.4%. Our composite FairStock Score of 53/100 reflects mixed fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

SOLV's 80% revenue growth trajectory could accelerate as it captures additional market share in the utilities sector. With $320 million in annual free cash flow (4.2% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 50x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer