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Ceco Environmental (CECO)
NASDAQ:CECO
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Ceco Environmental (CECO) AI Stock Analysis

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CECO

Ceco Environmental

(NASDAQ:CECO)

Rating:76Outperform
Price Target:
$53.00
▲(12.36% Upside)
Ceco Environmental's strong financial performance and positive earnings call are the primary drivers of its stock score. The company's robust revenue growth, improved profitability, and strategic positioning in diverse markets are significant strengths. However, the high P/E ratio and overbought technical indicators suggest caution. The absence of a dividend yield and potential inflationary pressures are additional considerations.
Positive Factors
Backlog Growth
CECO delivered another record bookings quarter, with orders climbing 95% year over year, while backlog increased 14% quarter over quarter, also notching another record.
Financial Performance
CECO posted better-than-expected Q2 results, as revenues increased 35% (+15% organic), above consensus estimates of 30% growth.
Order Growth
The potential for continued robust order growth at CECO looks promising.
Negative Factors
Execution Risk
Risks include execution risk, regulatory risk, dependency on subcontractors, merger integration risk, dilution risk, and uncertainty due to global macroeconomic and geopolitical environment.
Regulatory and Merger Risks
Risks such as execution, regulatory, and merger integration could impact the company's performance.

Ceco Environmental (CECO) vs. SPDR S&P 500 ETF (SPY)

Ceco Environmental Business Overview & Revenue Model

Company DescriptionCECO 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 MoneyCECO generates revenue through the sale of its environmental technologies and services, which include equipment sales, installation, maintenance, and consulting services. Key revenue streams consist of project-based contracts for customized solutions, ongoing service agreements, and the sale of replacement parts and consumables. The company also benefits from strategic partnerships with other industrial firms and government agencies, which enhance its market reach and enable collaborative projects. Additionally, CECO's focus on sustainability and compliance with environmental regulations positions it favorably in a growing market, contributing to its earnings through increased demand for its solutions.

Ceco Environmental Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Nov 10, 2025
Earnings Call Sentiment Positive
CECO Environmental had a strong quarter with record backlog and significant order growth, bolstered by successful acquisitions and improved financial guidance. Despite these positives, the company faces challenges such as inflationary pressures and previous project delays, though these are being managed effectively.
Q2-2025 Updates
Positive Updates
Record Backlog Growth
Backlog reached a new record, exiting the quarter at $688 million, up almost $300 million or more than 75% year-over-year.
Significant Increase in Orders
Generated $274 million in new bookings in Q2, up 95% versus the same period last year and booked the largest ever order in environmental emissions management.
Revenue and EBITDA Growth
Revenue of $185 million in Q2 was up 35% year-over-year. Adjusted EBITDA grew by 45% year-over-year, reaching over $23 million.
Improved Financial Outlook
Raised 2025 annual guidance for orders and revenue, with expected bookings to exceed revenue, resulting in a bookings range of $870 million to $930 million.
Successful Acquisitions
The Profire acquisition is delivering on expected synergies, contributing to the company's positive performance metrics.
Negative Updates
Inflationary Pressures
Modest inflation expected in the second half of the year, potentially impacting costs and requiring strategic management to offset.
Project Execution Delays
Previous project-related delays affected revenue recognition in the second half of 2024, although these delays have now abated.
Interest Expense Impact
Adjusted EPS was offset by higher interest expense in the period, impacting overall profitability growth.
Company Guidance
During the CECO Environmental Second Quarter 2025 Earnings Call, the company announced several record-breaking metrics, highlighting strong financial performance and strategic growth. The backlog reached a new high of $688 million, marking a year-over-year increase of approximately 75%, with sequential growth of $80 million. New bookings in Q2 amounted to $274 million, up 95% from the previous year, contributing to a book-to-bill ratio of approximately 1.5 for the first half of 2025. Revenue for the quarter was $185 million, a 35% increase year-over-year, setting a new record, while adjusted EBITDA rose by 45% to over $23 million. The company's EPS increased by 35% year-over-year to $0.24. CECO also raised its 2025 annual guidance for orders and revenue, now expecting bookings to range between $870 million and $930 million, and revenue between $725 million and $775 million. The company maintained its outlook for adjusted EBITDA and adjusted free cash flow, with EBITDA expected to grow around 50% year-over-year, reflecting the company's robust operational performance and strategic positioning in diverse markets.

Ceco Environmental Financial Statement Overview

Summary
Ceco Environmental demonstrates robust revenue growth and improved profitability, with enhanced margins and reduced leverage. The balance sheet is stable, though there is room for optimizing debt. While cash flow generation needs attention, the company is on a positive trajectory overall, with potential for further financial strengthening.
Income Statement
82
Very Positive
Ceco Environmental shows strong revenue growth, with a 17.6% increase from 2024 to TTM. Gross profit and net profit margins have improved, indicating better operational efficiency. However, the EBIT and EBITDA margins, while positive, suggest room for further improvement.
Balance Sheet
75
Positive
The company's debt-to-equity ratio has improved, showing a reduction in leverage. Return on equity has increased, reflecting better profitability. However, the equity ratio indicates moderate financial stability, suggesting a need for cautious debt management.
Cash Flow
68
Positive
Operating cash flow has turned negative in the TTM, posing potential liquidity concerns. However, the company maintains positive free cash flow, albeit at a slower growth rate, highlighting a need for improved cash management.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue656.17M557.93M544.85M422.63M324.14M316.01M
Gross Profit231.24M196.15M171.02M128.22M100.92M105.13M
EBITDA114.46M45.23M47.45M38.33M21.89M30.52M
Net Income52.46M12.96M12.91M17.42M1.43M8.21M
Balance Sheet
Total Assets876.58M759.70M600.29M504.72M416.20M419.31M
Cash, Cash Equivalents and Short-Term Investments36.82M37.83M54.78M45.52M29.90M35.99M
Total Debt23.30M249.92M155.48M122.89M74.96M91.54M
Total Liabilities573.36M507.81M362.80M286.57M210.24M215.70M
Stockholders Equity298.36M247.69M232.64M213.22M204.55M202.66M
Cash Flow
Free Cash Flow1.42M7.46M36.26M26.27M10.68M476.00K
Operating Cash Flow-2.43M24.83M44.65M29.65M13.30M4.42M
Investing Cash Flow-94.69M-105.31M-56.49M-48.26M-2.08M-9.23M
Financing Cash Flow96.67M65.91M21.14M38.18M-15.56M3.72M

Ceco Environmental Technical Analysis

Technical Analysis Sentiment
Positive
Last Price47.17
Price Trends
50DMA
39.25
Positive
100DMA
32.35
Positive
200DMA
29.91
Positive
Market Momentum
MACD
2.07
Positive
RSI
60.36
Neutral
STOCH
71.21
Neutral
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 47.17 is above the 20-day moving average (MA) of 46.21, above the 50-day MA of 39.25, and above the 200-day MA of 29.91, indicating a bullish trend. The MACD of 2.07 indicates Positive momentum. The RSI at 60.36 is Neutral, neither overbought nor oversold. The STOCH value of 71.21 is Neutral, 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 41 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

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$1.72B32.9519.67%15.74%294.80%
74
Outperform
$761.27M34.8911.95%6.19%15.04%
64
Neutral
$10.73B15.747.56%2.01%2.76%-15.10%
56
Neutral
$30.46M-46.19%19.03%11.70%
53
Neutral
$89.81M-7.69%-4.78%-1359.72%
46
Neutral
$20.04M-78.97%-12.76%15.23%
43
Neutral
$17.41M-94.24%-12.72%-36.80%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
CECO
Ceco Environmental
47.17
21.24
81.91%
ERII
Energy Recovery
14.42
-0.44
-2.96%
FTEK
Fuel Tech
2.87
1.89
192.86%
CLIR
ClearSign Combustion
0.59
-0.17
-22.37%
LIQT
LiqTech International
2.11
-0.70
-24.91%
TOMZ
TOMI Environmental Solutions
0.88
0.08
10.00%

Ceco Environmental Corporate Events

Executive/Board Changes
CECO Environmental Announces Departure of Senior VP
Neutral
Jul 24, 2025

CECO Environmental Corp. announced the upcoming departure of Lynn Watkins-Asiyanbi, the Senior Vice President and Chief Administrative and Legal Officer, effective August 15, 2025. The company has entered into a separation agreement with her, which includes severance payments and benefits, as well as conditions related to non-disparagement, non-competition, and non-solicitation covenants.

Executive/Board ChangesShareholder Meetings
CECO Environmental Holds Annual Stockholder Meeting
Neutral
May 22, 2025

On May 20, 2025, CECO Environmental Corp. held its annual meeting of stockholders where eight directors were elected, executive compensation was approved, and Deloitte was ratified as the independent auditor for fiscal 2025. The meeting also established an annual advisory vote on executive compensation, reflecting shareholder engagement in governance matters.

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.Date of analysis: Aug 19, 2025