Core Viewpoint - Comfort Systems (FIX) is showing resilience in its stock performance compared to broader market indices, with upcoming earnings expected to demonstrate significant growth in both EPS and revenue [1][3][4]. Company Performance - The stock price of Comfort Systems ended at $312.21, reflecting a slight increase of +0.03% from the previous day, contrasting with the S&P 500's decline of 1.57% [1]. - Over the past month, shares of Comfort Systems have decreased by 0.36%, which is significantly better than the Construction sector's loss of 11.78% and the S&P 500's loss of 12.16% [2]. Earnings Forecast - Analysts forecast Comfort Systems to report an EPS of $3.66, representing a 36.06% increase from the same quarter last year, with expected revenue of $1.7 billion, indicating a 10.81% increase [3]. - For the full year, the Zacks Consensus Estimates predict earnings of $17.87 per share and revenue of $7.55 billion, marking increases of +22.4% and +7.42% respectively from the previous year [4]. Analyst Sentiment - Recent revisions to analyst forecasts for Comfort Systems are crucial, as upward revisions indicate positive sentiment regarding the company's business operations and profit generation capabilities [5]. - The Zacks Rank system, which incorporates these estimate changes, currently rates Comfort Systems at 3 (Hold), with the consensus EPS estimate remaining unchanged over the last 30 days [6][7]. Valuation Metrics - Comfort Systems is trading at a Forward P/E ratio of 17.47, which is lower than the industry average Forward P/E of 24.7, suggesting a valuation discount [8]. - The Building Products - Air Conditioner and Heating industry, to which Comfort Systems belongs, ranks in the bottom 37% of all industries, according to the Zacks Industry Rank [8][9].

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Comfort Systems (FIX) closed the most recent trading day at $322.33, moving -0.55% from the previous trading session. The stock trailed the S&P 500, which registered a daily gain of 0.55%. Elsewhere, the Dow gained 1.01%, while the tech-heavy Nasdaq lost 0.14%. The the stock of heating, ventilation and air conditioning company has fallen by 10.8% in the past month, lagging the Construction sector's loss of 5.58% and the S&P 500's loss of 6.22%. From a valuation perspective, Comfort Systems is currently exch ...

Investors often turn to recommendations made by Wall Street analysts before making a Buy, Sell, or Hold decision about a stock. While media reports about rating changes by these brokerage-firm employed (or sell-side) analysts often affect a stock's price, do they really matter?Before we discuss the reliability of brokerage recommendations and how to use them to your advantage, let's see what these Wall Street heavyweights think about Comfort Systems (FIX) .Comfort Systems currently has an average brokerage ...

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Core Viewpoint - Comfort Systems USA, Inc. (FIX) has shown strong long-term performance with a 143.8% return over the past two years, but has recently faced challenges, with a 20% year-to-date decline, underperforming its industry and broader market indices [1][4][21]. Financial Performance - The company reported a 38% year-over-year revenue increase to $1.87 billion in Q4 2024, exceeding estimates by 6.4% [5]. - Earnings per share (EPS) surged 60% to $4.09, and gross margins expanded by 260 basis points to 23.2% [5]. - Comfort Systems ended 2024 with a record backlog of $6 billion, indicating strong future revenue potential [5]. Stock Performance - As of the latest report, FIX stock closed at $339.30, significantly below its 52-week high of $553.09 but above its low of $272.93 [6]. - The stock has outperformed AAON, Inc. (down 28.1%) but underperformed compared to Watsco, Inc. (down 1.1%) and EMCOR Group, Inc. (down 8.9%) in the past month [6]. Market Challenges - Recent stock weakness is attributed to investor concerns over potential margin compression due to tariffs and external economic factors [4][7]. - Tariffs could lead to increased input costs and supply chain disruptions, impacting profit margins and project timelines [7]. Growth Drivers - The industrial sector accounted for over 60% of total revenues in 2024, with data center projects contributing 33% of revenues, up from 21% the previous year [13]. - The company’s modular construction segment grew by approximately 50% year-over-year, representing 17% of total revenues in 2024 [16]. - Strategic acquisitions, such as Century Contractors, are expected to add an estimated $90 million in annual revenues, enhancing market presence [17]. Financial Stability - Comfort Systems ended 2024 with nearly $550 million in cash and minimal debt, with a debt-to-EBITDA ratio of 0.08, reflecting strong financial management [18]. - The company has maintained positive free cash flow for 26 consecutive years and has increased its dividend for 13 consecutive years [18]. Valuation - FIX stock is currently trading at a forward P/E ratio of 18.72, lower than the industry average and its three-year median value of 21.54 [19][21]. - Despite recent stock price weakness, the valuation appears attractive compared to historical and industry averages [22].

Core Viewpoint - Comfort Systems USA experienced a significant stock decline of 16.8% in February, primarily influenced by trade tariffs and concerns over profit margins despite reporting strong financial results for Q4 2024 [1][2][3]. Financial Performance - In 2024, Comfort Systems reported a 35% year-over-year increase in revenue, reaching $7 billion, and a 62% increase in net income to $522 million [4]. - The company's backlog reached an all-time high of $6 billion, reflecting a 16% year-over-year growth [4]. Market Dynamics - The company is benefiting from a surge in demand for data centers and semiconductor manufacturing, with 33% of its revenue in 2024 coming from these sectors, up from 21% in 2023 [9]. - Significant infrastructure commitments, including a $100 billion investment from Taiwan Semiconductor, are expected to drive further growth in 2025 [9]. Margin Concerns - Despite revenue growth, there are concerns that profit margins may contract due to rising costs from import tariffs, which could negatively impact profitability [2][5][6]. - Current gross and operating margins are significantly higher than the company's 10-year averages, raising questions about sustainability [5]. Strategic Focus - Management is being selective in job acquisition, prioritizing projects with the best profit margins, which positions the company favorably amidst high manufacturing demand [10].

Group 1 - Comfort Systems (FIX) closed at $339.17, reflecting a -1.85% change from the previous session, underperforming compared to the S&P 500's daily loss of 1.22% [1] - Over the past month, shares of Comfort Systems have decreased by 19.08%, significantly more than the Construction sector's loss of 6.27% and the S&P 500's loss of 2.31% [1] Group 2 - The upcoming earnings disclosure is anticipated to show an EPS of $3.66, representing a 36.06% increase from the same quarter last year, with revenue expected to reach $1.7 billion, up 10.81% year-over-year [2] - For the full year, earnings are projected at $17.87 per share and revenue at $7.55 billion, indicating increases of +22.4% and +7.42% respectively from the previous year [3] Group 3 - Recent modifications to analyst estimates for Comfort Systems reflect changing business dynamics, with positive revisions indicating analyst optimism regarding the company's profitability [4] - The Zacks Rank system, which incorporates estimate changes, has shown that stocks with a 1 rating have delivered an average annual return of +25% since 1988 [5][6] Group 4 - Comfort Systems is currently trading at a Forward P/E ratio of 19.34, which is lower than the industry average of 27.07, suggesting it is trading at a discount [7] - The Building Products - Air Conditioner and Heating industry, part of the Construction sector, holds a Zacks Industry Rank of 55, placing it in the top 22% of over 250 industries [7][8]

Financial Data and Key Metrics Changes - The company reported record annual and fourth quarter earnings, with fourth quarter revenue increasing by 38% year-over-year to $1.9 billion and full year revenue reaching $7 billion, a 35% increase compared to 2023 [13][14] - Earnings per share for the fourth quarter were $4.09, up 60% from the previous year, while full year earnings per share were $14.60, compared to $9.01 in 2023, marking an over 60% increase [19][20] - Operating cash flow for 2024 was $849 million, with free cash flow reaching $1.176 billion [10][22] Business Line Data and Key Metrics Changes - Mechanical segment revenue increased by 40% for the full year, driven by acquisitions and organic growth, while electrical segment revenue rose by 19% [14] - Same store revenue for the full year increased by 23%, amounting to $1.2 billion [14] - Gross profit for the fourth quarter was $434 million, with a gross profit margin of 23.2%, up from 20.6% in the same quarter of 2023 [15] Market Data and Key Metrics Changes - The backlog at the end of the year reached an all-time high of $6 billion, with strong demand across various sectors, particularly technology [9][26] - The industrial sector accounted for over 60% of the company's volume in 2024, with technology representing 33% of revenue, up from 21% the previous year [28] - Institutional markets, including education and healthcare, represented 24% of revenue, while the commercial sector accounted for about 16% [29] Company Strategy and Development Direction - The company is focusing on selecting projects with good margins and working conditions, emphasizing the importance of a skilled workforce [27] - There is a strong emphasis on modular construction, which accounted for 17% of revenue, with expectations for gradual growth in 2025 [40][41] - The company aims to continue investing in operations and share repurchases, reflecting a commitment to rewarding shareholders [11][24] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about maintaining strong gross profit margins in 2025, citing good project selection and execution [38][39] - The demand for data centers remains robust, with no signs of a slowdown, and the company has more booked backlog for 2026 than ever before [60][61] - The company is committed to ongoing recruitment and training to meet demand, ensuring a steady supply of skilled labor [99] Other Important Information - The company announced a quarterly dividend increase of five cents to forty cents per share, reflecting strong cash flow [11] - Capital expenditures for 2024 were $111 million, representing over 1.5% of revenue, with plans to maintain similar levels in 2025 [24][49] Q&A Session Summary Question: What gives confidence in sustaining elevated margin levels in 2025? - Management indicated that confidence stems from good project selection, strong customer relationships, and effective execution [38] Question: How is the modular business expected to grow in 2025? - The modular business is anticipated to grow gradually, with a focus on productivity and automation [41][44] Question: What is the outlook for capital expenditures in 2025? - Capital expenditures are expected to remain at similar levels as a percentage of revenue, with ongoing investments in operations [49] Question: Can you provide insights on the demand from technology customers? - Demand from technology customers, particularly for data centers, remains strong, with no signs of a slowdown [56][58] Question: How does the company approach project selection? - The company prioritizes projects that are good for its workforce, ensuring favorable working conditions and relationships with general contractors [155][158]

SYSTEMS CLA Quality People. Building Solutions. Q4 2024 Earnings Call NYSE: FIX February 21, 2025 COMFORTUS A Certain statements and information in this presentation may constitute forward-looking statements within the meaning of applicable securities laws and regulations. The words "believe," "expect," "anticipate," "plan," "intend," "foresee," "should," "would," "could," or other similar expressions are intended to identify forward-looking statements, which are generally not historic in nature. These forw ...