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Comfort Systems Stock Up 14% on Q2 Earnings & Revenue Beat
ZACKS· 2025-07-25 16:30
Core Insights - Comfort Systems USA (FIX) reported strong second-quarter 2025 results, with earnings and revenues exceeding expectations, indicating robust growth and operational efficiency [1][2]. Financial Performance - Net income for the quarter reached $230.8 million, or $6.53 per diluted share, surpassing the Zacks Consensus Estimate of $4.68 by 39.5% and increasing 75% from $3.74 per share in the same quarter last year [2][8]. - Revenue increased by 20% year over year to $2.17 billion, exceeding the consensus estimate of $1.95 billion by 11.3% [2][8]. - Adjusted EBITDA grew 50% year over year to $334.1 million, representing 15.4% of revenue, driven by effective cost control and operational leverage [4]. Backlog and Demand - The backlog reached a record $8.12 billion, up from $5.77 billion a year ago and $6.89 billion sequentially, with a same-store basis backlog increase of 37% year over year [3][8]. - CEO Brian Lane expressed confidence in long-term demand visibility, highlighting the robust pipelines and execution strength [3]. Profitability Metrics - Gross margin expanded to 23.5% from 20.1% a year ago, while operating income rose to $299.9 million, representing 13.8% of revenue, up from 10.2% last year [4]. - Both SG&A and earn-out obligation expenses declined, contributing to enhanced profitability [4]. Cash Flow and Liquidity - Operating cash flow increased to $252.5 million from $189.9 million in the year-ago quarter, while free cash flow rose to $222.2 million, up from $167.3 million [5]. - The company maintained a solid liquidity position with $331.7 million in cash and equivalents [5]. Capital Structure - Long-term debt decreased slightly to $61.3 million from $62.3 million at the end of 2024, while stockholders' equity improved to $1.97 billion from $1.70 billion, indicating a strengthening capital structure [6].
Comfort Systems Usa EPS Jumps 75 Percent
The Motley Fool· 2025-07-25 05:37
Core Insights - Comfort Systems USA reported strong Q2 2025 results, exceeding Wall Street estimates with GAAP EPS of $6.53 and revenue of $2.17 billion, reflecting significant year-over-year growth [1][2] Financial Performance - GAAP EPS reached $6.53, surpassing the estimate of $4.84, and increased by 74.6% from Q2 2024's $3.74 [2] - GAAP revenue was $2.17 billion, exceeding the forecast of $1.97 billion, and up 20.1% from $1.81 billion in Q2 2024 [2] - Net income (GAAP) rose to $230.8 million, a 72.2% increase year-over-year [5] - Operating income surged 62.4% to $299.9 million compared to Q2 2024 [5] - Operating cash flow climbed to $252.5 million, representing a 33.0% increase year-over-year [6] - Adjusted EBITDA was $334.1 million, up 50.1% from $222.7 million in Q2 2024 [2] - Backlog reached a record $8.12 billion, increasing by $1.23 billion from the prior quarter and $2.35 billion from a year ago, indicating strong future demand [7] Business Overview - Comfort Systems USA specializes in mechanical, electrical, and plumbing contracting for various facilities, including data centers, hospitals, and schools [3] - The company focuses on operational excellence, workforce development, technological innovation, and market diversification as key growth pillars [4] Operational Highlights - Gross profit margin improved to 23.5%, up from 20.1% in Q2 2024, attributed to superior execution in the field [5] - Service revenue from maintenance and repair constituted 15% of overall sales, while modular construction accounted for 19% [8] Strategic Developments - The acquisition of Century Contractors is expected to contribute approximately $90 million in annual revenue for 2025, reflecting a disciplined approach to acquisitions [9] - The company raised its quarterly dividend by 50% to $0.45 per share, indicating confidence in cash generation and business trends [11] Future Outlook - Management expressed optimism regarding project visibility for fiscal 2026, although no explicit guidance was provided for the next quarter or full year [12]
FIX's M&A Discipline Holds Firm: Can it Fuel Long-Term Growth?
ZACKS· 2025-07-09 15:31
Company Overview - Comfort Systems USA, Inc. maintains a disciplined approach to acquisitions in 2025, supported by a strong balance sheet and a focus on long-term growth [1][4] - The company ended Q1 2025 with over $130 million in net cash, despite returning $92 million to shareholders and funding $80 million in acquisition-related earn-outs [3][10] Recent Acquisitions - In Q1 2025, Comfort Systems acquired Century Contractors, a mechanical contractor expected to contribute approximately $90 million in annual revenues [2][10] - The company emphasizes that acquisitions are a key part of its strategy, particularly in strengthening end-market capabilities and regional presence [2][4] Financial Performance - Comfort Systems has a record backlog of $6.9 billion as of March 31, 2025, which supports its long-term growth focus [3][10] - The earnings estimates for 2025 and 2026 have trended upward to $19.28 and $20.41 per share, indicating year-over-year growth of 32.1% and 5.8%, respectively [15] Market Position - Comfort Systems' stock has gained 56.4% in the past three months, outperforming the industry and the S&P 500, which rose by 18% and 18.1%, respectively [11] - The stock is currently trading at a forward 12-month price-to-earnings ratio of 26.55X, which is a discount compared to industry peers [13] Strategic Focus - The company continues to evaluate additional acquisition opportunities, indicating that M&A remains a meaningful priority in its capital allocation framework [2][4] - Management's focus on quality targets over deal volume suggests a measured approach to long-term value creation [4]
Tariffs and Tech: How Exposed Is Comfort Systems' Project Pipeline?
ZACKS· 2025-07-03 16:50
Core Insights - Comfort Systems USA (FIX) is significantly impacted by tariff uncertainties due to its 37% revenue from advanced tech projects, including data centers and semiconductor fabs [1][8] - The company has a strong backlog of $6.9 billion, reflecting a 16% year-over-year increase, indicating robust demand in tech and institutional markets [3][8] - Comfort Systems' management believes that their pricing strategy and strong customer relationships will help mitigate the impact of tariff-related cost pressures [2][4] Company Overview - Comfort Systems has locked in most large project costs early, relying on solid supplier quotes, which helps manage inflation risks [2] - The company is experiencing strong momentum in healthcare construction, which is emerging as a new growth engine [3] - Comfort Systems' execution, margin discipline, and customer relationships are seen as strong enough to absorb localized cost shifts due to tariffs [4] Competitive Landscape - EMCOR Group (EME) faces similar tariff-related risks, with significant revenue from mechanical and electrical contracting, but has a diversified portfolio that provides resilience [5] - Limbach Holdings (LMB) is more narrowly focused and has less flexibility to absorb cost shocks compared to Comfort Systems, which has a broader geographic reach and deeper backlog [6] Financial Performance - Comfort Systems' stock has increased by 78.8% over the past three months, outperforming the industry and the S&P 500 [7] - The company is currently trading at a forward price-to-earnings ratio of 26.7X, which is a discount compared to industry peers [10] - Earnings estimates for 2025 and 2026 have increased to $19.28 and $20.41 per share, indicating year-over-year growth of 32.1% and 5.8%, respectively [11]
Here's Why Comfort Systems Soared More Than 23% in April and Is Set to Be a Winner in Trump's Presidency
The Motley Fool· 2025-05-05 14:38
Core Insights - Comfort Systems USA's shares increased by 23.3% in April, driven by strong first-quarter earnings that alleviated concerns about slowing growth and valuation exposure [1][5] - The company is primarily a mechanical and electrical contractor, with over 75% of its revenue from mechanical services [2] Group 1: Financial Performance - The company's backlog reached $6.9 billion at the end of the first quarter, up from nearly $6 billion at the end of 2024, indicating robust demand [5] - Technology spending, including data centers and semiconductor fabrication, rose by 30% year-over-year, now accounting for 37% of total revenue [6] Group 2: Market Trends - The significant increase in share price (up 1,250%) is attributed to a surge in U.S. investment in manufacturing and nonresidential construction, fueled by pandemic recovery, infrastructure spending, and the CHIPS Act [3] - There are expectations for continued double-digit revenue growth in 2025, supported by potential reshoring of manufacturing to the U.S. [8]