Ceco Environmental (CECO)
NASDAQ:CECO
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Ceco Environmental
(NASDAQ:CECO)
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Rating:67Neutral
Price Target:
$60.00
▼(-10.26% Downside)
Action:ReiteratedDate:02/26/26
The score is driven by stronger profitability and a much improved balance sheet, supported by a very upbeat earnings call with raised guidance and record backlog. Offsetting these positives are weak TTM cash conversion, soft near-term technical momentum (below key short-term averages), and a high P/E that makes the stock less forgiving if execution or integration falters.
Positive Factors
Balance Sheet Strength
A dramatic reduction in debt and materially stronger equity base meaningfully de-risks the capital structure. Lower leverage and improved ROE increase financial flexibility to fund organic growth, capex or acquisitions and reduce refinancing and covenant stress over the medium term.
Negative Factors
Weak Cash Conversion
Recent cash flow weakness versus reported profitability indicates working-capital pressure or elevated investment outlays. Negative FCF constrains the ability to self-fund growth or integration costs, increases reliance on financing, and raises the risk that profitability gains won’t translate quickly into durable cash generation.
Read all positive and negative factors
Positive Factors
Negative Factors
Balance Sheet Strength
A dramatic reduction in debt and materially stronger equity base meaningfully de-risks the capital structure. Lower leverage and improved ROE increase financial flexibility to fund organic growth, capex or acquisitions and reduce refinancing and covenant stress over the medium term.
Read all positive factors
Ceco Environmental (CECO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.11B
Dividend YieldN/A
Average Volume (3M)626.83K
Price to Earnings (P/E)42.2
Beta (1Y)1.04
Revenue Growth29.86%
EPS Growth331.33%
CountryUS
Employees1,600
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)0.30
Shares Outstanding32,866,352
10 Day Avg. Volume421,266
30 Day Avg. Volume626,826
Financial Highlights & Ratios
PEG Ratio0.15
Price to Book (P/B)6.66
Price to Sales (P/S)2.73
P/FCF Ratio-385.73
Enterprise Value/Market Cap1.12
Enterprise Value/Revenue3.05
Enterprise Value/Gross Profit8.90
Enterprise Value/Ebitda18.36
Forecast
1Y Price Target
$82.25Price Target Upside23.02% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
EPS Forecast (FY)1.52
Revenue Forecast (FY)$934.39M
Ceco Environmental Business Overview & Revenue Model
Company Description
CECO Environmental Corp. provides industrial air quality and fluid handling systems worldwide. It operates in two segments: Engineered Systems Segment and Industrial Process Solutions Segment. The company engineers, designs, builds, and installs s...
How the Company Makes Money
CECO makes money primarily by selling engineered environmental control and industrial process equipment and related services to industrial customers. Revenue is typically generated through (1) project-based system and equipment sales, where CECO p...
Ceco Environmental Earnings Call Summary
Earnings Call Date:Feb 24, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call presented a strong set of operational and financial achievements for CECO: record backlog, record revenues and bookings, significant adjusted EBITDA expansion, improved cash generation, a large and converting pipeline, and an accretive transformational merger with Thermon that materially enlarges scale and product mix. The primary negatives were manageable: earlier-year cash burn and one-time costs, a divestiture-related revenue headwind, pro forma leverage from the acquisition, transaction/integration execution risk, and unmodeled commercial synergies. Overall, the positive operational momentum, upgraded standalone guidance, substantial pipeline, and clear synergy roadmap for the merger outweigh the execution and leverage risks.Positive Updates
Record Backlog and Orders
Record backlog of $793M (approaching $800M), up ~47% year-over-year and 10% sequentially; Q4 orders $329M, up ~50% YoY; full-year bookings $1.064B, up ~60% YoY; book-to-bill ~1.5x in Q4 and ~1.4x for the full year.
Negative Updates
Transaction and Integration Risks / Leverage
Deal funded in part by existing credit facilities with pro forma net leverage ~2.5x; transaction valuation implied ~17x adjusted EBITDA (or ~13x including synergies) and will require months of pre-integration work; commercial synergies were not assumed in the base model and integration execution poses risk.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Backlog and Orders
Record backlog of $793M (approaching $800M), up ~47% year-over-year and 10% sequentially; Q4 orders $329M, up ~50% YoY; full-year bookings $1.064B, up ~60% YoY; book-to-bill ~1.5x in Q4 and ~1.4x for the full year.
Read all positive updates
Company Guidance
CECO raised 2026 guidance to revenue of $925–$975 million (up from $850–$950M) and adjusted EBITDA of $115–$135 million, which implies ~23% revenue growth and ~38% adjusted-EBITDA growth at the midpoints; management pointed to a record backlog of ~$793 million (≈+47% YoY, +10% seq.), Q4 orders of $329 million (+50% YoY) and full‑year bookings of $1.064 billion (+60% YoY) with a Q4 book‑to‑bill of ~1.5x, a >$6.5 billion pipeline (quarter‑to‑date >$270M booked and two Q1 power orders >$175M), plus 2025 results of $774M revenue and >$90M adj. EBITDA (Q4 adj. EBITDA $29.8M, 13.9% margin, +57% YoY, +180 bps) and annual cash flow of ~+$10M (H1 ≈‑$20M, H2 ≈+$30M; H2 cash conversion 52%), along with net leverage of ~2.2x, liquidity of ~$124M and expected interest rate step‑downs (~50 bps total; ~$1.1M annualized savings) as the key metrics supporting the raised outlook.Ceco Environmental Financial Statement Overview
Summary
Income Statement
82
Very Positive
Balance Sheet
90
Very Positive
Cash Flow
42
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 774.38M | 557.93M | 544.85M | 422.63M | 324.14M |
| Gross Profit | 253.06M | 196.15M | 171.02M | 128.22M | 100.92M |
| EBITDA | 128.64M | 45.23M | 47.45M | 38.33M | 21.89M |
| Net Income | 50.05M | 12.96M | 12.91M | 17.42M | 1.43M |
Balance Sheet | |||||
| Total Assets | 893.77M | 759.70M | 600.29M | 504.72M | 416.20M |
| Cash, Cash Equivalents and Short-Term Investments | 33.14M | 37.83M | 54.78M | 45.52M | 29.90M |
| Total Debt | 24.84M | 249.92M | 155.48M | 123.53M | 75.56M |
| Total Liabilities | 570.59M | 507.81M | 362.80M | 286.57M | 210.24M |
| Stockholders Equity | 317.53M | 247.69M | 232.64M | 213.22M | 204.55M |
Cash Flow | |||||
| Free Cash Flow | -5.48M | 7.46M | 36.26M | 26.27M | 10.68M |
| Operating Cash Flow | 5.86M | 24.83M | 44.65M | 29.65M | 13.30M |
| Investing Cash Flow | -1.08M | -105.31M | -56.49M | -48.26M | -2.08M |
| Financing Cash Flow | -11.56M | 65.91M | 21.14M | 38.18M | -15.56M |
Ceco Environmental Technical Analysis
Positive
66.86
Price Trends
63.72
Positive
61.65
Positive
53.23
Positive
Market Momentum
0.88
Negative
60.43
Neutral
92.03
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CECO, the sentiment is Positive. The current price of 66.86 is above the 20-day moving average (MA) of 60.40, above the 50-day MA of 63.72, and above the 200-day MA of 53.23, indicating a bullish trend. The MACD of 0.88 indicates Negative momentum. The RSI at 60.43 is Neutral, neither overbought nor oversold. The STOCH value of 92.03 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CECO.
Ceco Environmental Risk Analysis
Ceco Environmental disclosed 47 risk factors in its most recent earnings report. Ceco Environmental reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ceco Environmental Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
67 Neutral | $2.11B | 42.25 | 16.53% | ― | 29.86% | 331.33% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $586.93M | 31.61 | 11.92% | ― | 0.10% | 1.50% | |
56 Neutral | $39.00M | -20.77 | -5.70% | ― | -5.66% | -397.46% | |
52 Neutral | $28.61M | -24.81 | -53.54% | ― | -49.70% | -2.72% | |
50 Neutral | $54.24M | -0.93 | -241.68% | ― | ― | ― | |
48 Neutral | $1.07B | -8.44 | -161.85% | ― | ― | 12.57% |
* Industrials Sector Average
CECO
Ceco Environmental
66.07
45.60
222.77%
ERII
Energy Recovery
11.29
-3.79
-25.13%
FTEK
Fuel Tech
1.32
0.34
35.11%
CLIR
ClearSign Combustion
5.38
-0.52
-8.83%
SCWO
374Water
3.30
0.57
20.88%
PCT
PureCycle Technologies
6.73
0.37
5.82%
Ceco Environmental Corporate Events
Business Operations and StrategyExecutive/Board ChangesM&A Transactions
Ceco Environmental to Acquire Thermon in Strategic Merger
Positive
Feb 24, 2026
On February 23, 2026, CECO Environmental signed a definitive agreement to acquire Thermon Group Holdings in a cash-and-stock deal valuing Thermon at about $2.2 billion, creating a combined industrial platform focused on environmental and thermal s...
Regulatory Filings and Compliance
Ceco Environmental Reports New Direct Financial Obligation Filing
Neutral
Feb 4, 2026
The filing from Ceco Environmental contains only a procedural reference indicating that information previously disclosed in another section is being incorporated by reference, without providing any new details about the company, its operations, or...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.