Buffett Brain · Research note
TPC· Industrials
Tutor Perini
Tutor Perini's weak profitability metrics and lack of a competitive moat make it a poor investment choice.
Buffett fit
Weak fit
Owner
1
Durability
13
Management
60
Price
47
Buffett's checklist
Each number against Buffett's bar, and where it ranks among Industrials stocks in our database.
How much profit the business makes on each dollar invested in it. Higher is better.
What is left of each sale after the cost of making the product. A high number often means pricing power.
The cash the business earns for its owners, compared with the price of the whole company.
How fast sales grew each year over the last five years.
How many years of today's profit you pay for at today's price. Lower means cheaper.
How much the company owes compared with what it owns outright. Lower is safer.
The four pillars
How the business measures up on each of Buffett's four tests.
If I owned 100% of Tutor Perini, I would focus on improving margins, as the current of 4% is well below the sector's top-quintile of 16.7%.
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The 10-year outlook for Tutor Perini appears weak. The company has not been profitable in five years, with a net income of only $80.44M and an of 7.9%, which is below the sector's top-quintile cutoff of 11.5%.
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Tutor Perini's share count has grown at 0.81% over the last five years, and there has been no activity.
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The current price of $72.38 results in a of 48.8, which is excessive given the weak earnings yield of 2.05%.
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For and against
The strongest points on each side, with the numbers behind them.
In its favor
5- 1 of $567.21M indicates some operational cash generation.
- 2Current ratio of 1.28 suggests short-term obligations are reasonably covered.
- 3Interest coverage ratio of 8.3 indicates the ability to meet interest payments comfortably.
- 4Diversified service offerings across civil, building, and specialty contracting.
Concerns
5- 1 of 7.9% is below the sector's top-quintile cutoff of 11.5%.
- 2 of 11.7% is significantly below the sector average of 43.5%.
- 3EPS has declined by 12.67% over the past five years, indicating instability.
- 4Net margin of 1.4% is well below the sector's top-quintile of 12.3%.
Price history
$77.90+465.7%· 5-year return
Weekly closing prices. Touch or hover the line for a date.
The business
How the business works
Tutor Perini operates in the construction sector, providing services across civil, building, and specialty contracting segments. Its revenue of $5.54B comes from diverse projects, including infrastructure and commercial buildings. However, with a net margin of only 1.4%, the unit economics are weak.
What other investors would say
The same company, judged by three other documented playbooks.
Keep researching
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