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]

Core Insights - Comfort Systems USA Inc. has experienced a remarkable 43% increase year-to-date through February 11, 2026, reaching a stock price of $1,335.14, driven by demand from data center buildouts and a shift towards AI infrastructure [2] - The company has seen a 208% increase in shares over the past year, raising questions about the sustainability of this rally given its current trading at 54 times trailing earnings [2] Financial Performance - The momentum in Comfort Systems' stock is attributed to its Q3 2025 results, which reported revenue of $2.45 billion, exceeding Wall Street's estimate of $2.18 billion by 12% [3] - Earnings per share (EPS) for Q3 2025 were $8.25, surpassing the consensus estimate of $6.29 by 31%, and doubling year-over-year results [3] - Operating cash flow increased by 83% to $553.3 million, and the company's backlog reached a record $9.38 billion, with $1 billion in same-store growth [4] Institutional Interest - 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 [5] - Institutional ownership stands at 96.51%, indicating that the stock's rise is driven by institutional investors rather than retail speculation [5] Analyst Ratings - Analysts have shown strong support, with UBS raising its price target from $1,140 to $1,310, citing a strong backlog and labor shortages that enhance pricing power [6] - Stifel has increased its target to $1,196, while the Wall Street consensus price target is $1,247, with six Buy ratings and two Holds [6] Valuation Concerns - The stock is currently trading at 42 times forward earnings and has a PEG ratio of 2.06, reflecting expectations of substantial growth [7] - Insider selling has raised concerns, with CFO William George selling 9,649 shares for approximately $7.3 million and CEO Brian Lane selling 7,158 shares worth $6.8 million, with no insider buying reported in the past three months [7]