Comfort Systems is One of the S&P 500's Top Performers in 2026

Core Insights - Comfort Systems has experienced a remarkable 43% surge in stock price year-to-date in 2026, driven by increased demand for AI data centers, with shares trading at 54 times trailing earnings [1] - The company reported Q3 2025 revenue of $2.45 billion, exceeding estimates by 12%, and earnings per share (EPS) of $8.25, beating consensus by 31% [1] - The record backlog reached $9.38 billion, with $1 billion in same-store growth, indicating strong operational momentum [1] Financial Performance - Comfort Systems' Q3 2025 revenue was $2.45 billion, surpassing Wall Street's estimate of $2.18 billion by 12% [1] - The EPS of $8.25 represented a 31% increase over the consensus estimate of $6.29, doubling year-over-year results [1] - Operating cash flow increased by 83% to $553.3 million, showcasing strong cash generation capabilities [1] Institutional Interest - The inclusion in the S&P 500 has led to significant institutional buying, with firms like WCM Investment Management and New York State Common Retirement Fund increasing their stakes [1] - Institutional ownership stands at 96.51%, indicating that the stock's rise is driven by institutional investors rather than retail speculation [1] - Analysts have raised price targets, with UBS increasing its target from $1,140 to $1,310, citing strong backlog and labor shortages that enhance pricing power [1] Valuation and Future Outlook - The stock trades at 42 times forward earnings and has a PEG ratio of 2.06, reflecting expectations for substantial growth [1] - Insider selling has been notable, with the CFO and CEO selling shares worth approximately $7.3 million and $6.8 million, respectively, with no insider buying in the past three months [1] - Wall Street anticipates a revenue growth rate of 35.2%, but any slowdown in AI infrastructure spending could impact the premium valuation [1]