Ceco Environmental (CECO) AI Stock Analysis

• Market Cap: $2.34B
• Dividend Yield: N/A
• Average Volume (3M): 262.25K
• Price to Earnings (P/E): 46.7
• Beta (1Y): 1.14
• Revenue Growth: 29.86%
• EPS Growth: 331.33%
• Country: US
• Employees: 1,600
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.26
• Shares Outstanding: 35,641,030
• 10 Day Avg. Volume: 196,959
• 30 Day Avg. Volume: 262,253
• PEG Ratio: 0.00
• Price to Book (P/B): 4.26
• Price to Sales (P/S): 1.89
• P/FCF Ratio: 141.54
• Enterprise Value/Market Cap: 0.89
• Enterprise Value/Revenue: 2.90
• Enterprise Value/Gross Profit: 8.31
• Enterprise Value/Ebitda: 17.37
• 1Y Price Target: $66.00
• Price Target Upside: -0.24% Downside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 4
• EPS Forecast (FY): 1.51
• Revenue Forecast (FY): $836.70M

• Rating: 75 Outperform
• Price Target: $74.00 ▲(11.85% Upside)

The score is driven primarily by strong financial performance trends (growth and profitability with reduced leverage) and a very constructive earnings outlook supported by record backlog and upbeat 2026 targets. Technicals also support the trend, though momentum appears stretched. The main restraint is valuation (high P/E) plus cash-flow conversion risk due to negative operating cash flow.

Positive Factors

Revenue Growth

The significant year-over-year revenue growth indicates strong demand for CECO's products and services, supporting its market position and future expansion.

Backlog Growth

A growing backlog suggests sustained demand and provides revenue visibility, enhancing CECO's ability to plan and invest for future growth.

Sales Pipeline

A robust sales pipeline signifies potential for continued revenue growth, supporting strategic initiatives and long-term financial performance.

Negative Factors

Cash Flow Management

Negative operating cash flow can strain liquidity, limiting CECO's ability to invest in growth opportunities and manage financial obligations.

Interest Expense Impact

Increased interest expenses reduce net income, potentially affecting CECO's profitability and ability to reinvest in the business.

Seasonal Gross Margin Decline

Declining gross margins can impact profitability, highlighting the need for better cost management and project selection to maintain financial health.

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 systems that capture, clean, and destroy air- and water-borne emissions from industrial facilities as well as fluid handling, gas separation, and filtration systems. It offers dampers and diverters, selective catalytic reduction and selective non-catalytic reduction systems, cyclonic technology, thermal oxidizers, filtration systems, scrubbers, and water and fluid handling equipment, as well as plant engineering services and engineered design build fabrication. The company markets its products and services to natural gas processors, transmission and distribution companies, refineries, power generators, industrial manufacturing, engineering and construction companies, semiconductor manufacturers, compressor manufacturers, beverage can manufacturers, metals and minerals, and electric vehicle producer companies. CECO Environmental Corp. was incorporated in 1966 and is headquartered in Dallas, Texas.

How the Company Makes Money

Ceco Environmental generates revenue through multiple channels, primarily by selling its core products, which include air pollution control systems, water treatment solutions, and waste management technologies. The company also earns income from installation services, maintenance agreements, and ongoing support for its systems. Key revenue streams include project-based contracts with industrial clients, long-term service agreements, and sales of replacement parts. Additionally, CECO has established strategic partnerships with other technology providers and engineering firms, enhancing its service offerings and expanding its market reach, which contributes to its overall earnings.

Ceco Environmental Financial Statement Overview

Summary

Ceco Environmental demonstrates strong revenue growth and improved profitability, supported by a healthier balance sheet with reduced leverage. However, challenges remain in cash flow management, particularly in generating positive operating cash flow. The company is on a positive trajectory, but attention to cash flow stability is crucial for sustained financial health.

Income Statement

Ceco Environmental shows strong revenue growth with a 9.46% increase in TTM, indicating robust demand for its products. The gross profit margin remains stable at approximately 34.88%, while the net profit margin has improved to 7.22%, reflecting enhanced operational efficiency. The EBIT and EBITDA margins have also strengthened, suggesting effective cost management and operational leverage.

Balance Sheet

The company's debt-to-equity ratio has significantly improved to 0.08 in TTM, indicating reduced leverage and a stronger balance sheet. Return on equity has increased to 18.18%, showcasing effective utilization of shareholder funds. The equity ratio stands at 34.67%, reflecting a solid capital structure, though there is room for improvement in asset utilization.

Cash Flow

Ceco Environmental's free cash flow has grown significantly, but the operating cash flow is negative, which could pose liquidity challenges. The free cash flow to net income ratio is negative, suggesting that cash generation from operations needs attention. However, the substantial growth in free cash flow is a positive sign for future cash generation potential.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	718.25M	557.93M	544.85M	422.63M	324.14M	316.01M
Gross Profit	250.55M	196.15M	171.02M	128.22M	100.92M	105.13M
EBITDA	119.89M	45.23M	47.45M	38.33M	21.89M	25.30M
Net Income	51.87M	12.96M	12.91M	17.42M	1.43M	8.21M
Balance Sheet
Total Assets	891.88M	759.70M	600.29M	504.72M	416.20M	429.13M
Cash, Cash Equivalents and Short-Term Investments	32.79M	37.83M	54.78M	45.52M	29.90M	37.81M
Total Debt	25.21M	249.92M	155.48M	123.53M	75.56M	91.54M
Total Liabilities	578.32M	507.81M	362.80M	286.57M	210.24M	225.52M
Stockholders Equity	309.21M	247.69M	232.64M	213.22M	204.55M	202.66M
Cash Flow
Free Cash Flow	292.00K	7.46M	36.26M	26.27M	10.68M	476.00K
Operating Cash Flow	-2.27M	24.83M	44.65M	29.65M	13.30M	4.42M
Investing Cash Flow	-77.60M	-105.31M	-56.49M	-48.26M	-2.08M	-9.23M
Financing Cash Flow	77.59M	65.91M	21.14M	38.18M	-15.56M	3.72M

Ceco Environmental Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 66.16
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: 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 66.16 is above the 20-day moving average (MA) of 61.12, above the 50-day MA of 56.72, and above the 200-day MA of 41.49, indicating a bullish trend. The MACD of 2.18 indicates Negative momentum. The RSI at 69.16 is Neutral, neither overbought nor oversold. The STOCH value of 91.37 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CECO.

Ceco Environmental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CECO	75 Outperform	$2.34B	46.74	18.85%	―	29.86%	331.33%
ERII	68 Neutral	$753.26M	42.02	9.41%	―	0.10%	1.50%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PCT	55 Neutral	$2.07B	-7.71	-147.56%	―	―	12.57%
FTEK	54 Neutral	$47.54M	-16.33	-7.10%	―	-5.66%	-397.46%
CLIR	48 Neutral	$40.11M	-6.75	-53.13%	―	-49.70%	-2.72%
SCWO	48 Neutral	$42.48M	-2.07	-232.63%	―	―	―