Comfort Systems USA (FIX) Q2 2025 Earnings Call July 25, 2025 11:00 AM ET Speaker0Good day, and thank you for standing by. Welcome to the Q2 twenty twenty five Comfort Systems USA Earnings Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer session. You will then hear an automated message advising that your hand is raised.To withdraw your question, please press 11 again. Please be advised that today's conference is ...

Key Takeaways FIX will report Q2 earnings on July 24 after a record-breaking Q1 driven by 19% revenue growth. A $6.9B backlog and high-tech Mechanical demand offer strong visibility into the rest of 2025. Modular construction and disciplined project selection help FIX sustain record-high margins.Comfort Systems USA, Inc. (FIX) is slated to report results for the second quarter of 2025 on July 24, after the closing bell.Q1 Recap: A Strong Start to 2025In the last reported quarter that ended March 31, 2025, ...

Core Insights - EMCOR Group, Inc. (EME) is experiencing strong demand in institutional markets, particularly in healthcare construction, with total remaining performance obligations (RPOs) reaching $11.75 billion, a 17.1% organic growth [1][10] - The company reported a significant revenue increase in its mechanical and electrical construction segments, with growth rates of 10.2% and 42.3% year over year, respectively, driven by heightened activity in healthcare [2] - Healthcare revenues nearly doubled year-over-year in Q1 2025, bolstered by ongoing customer demand and the acquisition of Miller Electric, which added approximately $240 million to the healthcare-related backlog [3][10] Company Performance - Demand from hospitals and medical systems remains robust, supporting both new construction and facility upgrades, with the company focusing on disciplined execution through advanced project management techniques [4] - EMCOR's healthcare pipeline and institutional exposure position it well for long-term backlog growth, with both organic and acquired capabilities contributing to backlog visibility [5] Industry Context - Other industry players, such as Tutor Perini Corporation and Comfort Systems USA, are also capitalizing on the growing healthcare construction demand, indicating a broader trend in the sector [6] - Tutor Perini has secured $111 million in additional funding for healthcare projects and is advancing a major $500 million project in California, with expectations for further healthcare-related awards [7] - Comfort Systems reports that healthcare now constitutes approximately 10% of its business, with institutional markets contributing 24% of total revenues, supported by stable demand and large bookings [8] Financial Metrics - EMCOR's shares have increased by 42.8% over the past three months, outperforming the Zacks Building Products - Heavy Construction industry's growth of 39.8% [9] - The company's total RPOs reached $11.75 billion in Q1 2025, with healthcare RPOs rising to $1.5 billion, reflecting consistent activity in the medical sector [10] - EMCOR's earnings estimates for 2025 and 2026 remain unchanged at $23.59 and $25.47 per share, respectively, indicating year-over-year growth of 9.6% for 2025 and 8% for 2026 [14]

Core Insights - Comfort Systems USA (FIX) is expanding its presence in healthcare construction, which is expected to see steady long-term demand due to demographic shifts and infrastructure needs [1][4] - Healthcare now represents approximately 10% of Comfort Systems' overall business, with real growth in project value and activity levels [2][11] - The company is well-positioned to capture healthcare-related contracts due to its skilled labor force and national scale [3][11] Company Performance - In Q1 2025, institutional markets, including healthcare, accounted for 24% of total revenues, supported by strong customer demand and large projects [3][11] - Comfort Systems' stock has increased by 48.5% over the past three months, outperforming the industry and S&P 500 [12] - Earnings estimates for 2025 and 2026 have increased by 3.8% and 1.8%, respectively, indicating year-over-year growth of 32.1% and 5.8% [16] Industry Trends - Other companies like EMCOR Group and Jacobs Solutions are also capitalizing on the growing healthcare construction market [5] - EMCOR reported a 10.2% revenue growth in Q1 2025, with healthcare-related obligations reaching $1.5 billion, up 38% year over year [6][7] - Jacobs has a backlog of $22.16 billion, up 20% year over year, driven by strong project wins in healthcare infrastructure [9]

Core Insights - Comfort Systems USA (FIX) has achieved a remarkable 51.8% stock gain over the past three months, significantly outperforming the broader market and its peers in the Zacks Building Products - Air Conditioner and Heating industry, which rose only 14.8% during the same period [1][7] - The company's strong performance is driven by increasing demand in data centers, industrial projects, and modular construction, capitalizing on long-term structural trends [1][11] Stock Performance - FIX stock closed at $496.70, which is 10.2% below its 52-week high of $553.09 and 82% above its 52-week low of $272.93 [4] - The stock is trading above both 50 and 200-day moving averages, indicating a bullish trend and positive market sentiment [5] Revenue Drivers - AI infrastructure, modular builds, and onshoring projects are now driving a growing share of FIX's revenue, with AI-related projects contributing 37% of total revenue, up from 30% last year [7][11] - Modular construction accounts for 19% of first-quarter 2025 revenue, enhancing scale and margins through faster installations and improved labor efficiency [13][15] - Industrial projects made up 62% of first-quarter volume, supported by renewed manufacturing activity and federal clean energy incentives [16] Financial Metrics - FIX's forward 12-month P/E ratio is 25.83, below the industry average of 28.43, indicating reasonable valuation after the recent rally [8] - The company's return on invested capital (ROIC) stands at 27.09%, significantly higher than the industry average of 7.93%, reflecting efficient growth [9] Strategic Growth Initiatives - M&A activities are a key growth strategy, with the recent acquisition of Century Contractors expected to add $90 million in revenue [19] - The company has over $130 million in net cash, providing financial flexibility for future acquisitions [19] Market Outlook - Analysts have revised earnings estimates upward, with the Zacks Consensus Estimate for FIX's 2025 earnings per share increasing to $19.28 from $19.07 [22] - Projections indicate a 32.1% increase in earnings for 2025, with revenue expected to grow by 9.9% [23]

Core Viewpoint - Momentum investing strategies focus on stocks with price increases, aiming to identify targets for potential upside while considering various timeframes [1] Group 1: Oddity Tech - Oddity Tech Ltd. is a tech company in the beauty and wellness sector, recently achieving a share price of $64.02, with a 52-week range of $30.34 to $65.90 and a P/E ratio of 38.85 [2][3] - The company reported a 70% increase in share price over the last month and a 53% year-to-date increase, surpassing earnings expectations by six cents and achieving a 27% year-over-year revenue growth [3][4] - Oddity's IL MAKIAGE brand is a key driver, with a goal of reaching $1 billion in revenue by 2028, while expanding into European markets despite heavy exposure to the U.S. market [5] Group 2: NeoGenomics - NeoGenomics Inc., a cancer and cytogenetics testing service provider, has a current share price of $8.08, with a 52-week range of $6.08 to $19.12 and a price target suggesting over 85% upside potential [6][7] - The company experienced a 22% share price increase from April 30 to May 5, following a period of decline due to a disappointing earnings report [7][8] - NeoGenomics raised its full-year 2025 guidance and completed the acquisition of Pathline, which is expected to enhance its geographical reach and service portfolio [8] Group 3: Comfort Systems USA - Comfort Systems USA Inc. is a mechanical and electrical services provider with a current share price of $433.79, a 52-week range of $272.93 to $553.09, and a unanimous Buy rating from analysts [9][10] - The company has seen a 40% increase in share price over the last month, driven by a significant backlog growth of nearly $1 billion due to the CHIPS Act and data center investments [10][11] - Anticipated revenue growth for 2025 is expected to be in double digits, potentially benefiting from U.S. manufacturing restoration efforts [11]

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]