Ceco Environmental (CECO) AI Stock Analysis

• Market Cap: $2.14B
• Dividend Yield: N/A
• Average Volume (3M): 435.74K
• Price to Earnings (P/E): 47.6
• Beta (1Y): 1.08
• 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): 0.30
• Shares Outstanding: 32,866,352
• 10 Day Avg. Volume: 784,489
• 30 Day Avg. Volume: 435,736
• PEG Ratio: 0.15
• Price to Book (P/B): 6.66
• Price to Sales (P/S): 2.73
• P/FCF Ratio: -385.73
• Enterprise Value/Market Cap: 1.00
• Enterprise Value/Revenue: 2.77
• Enterprise Value/Gross Profit: 8.09
• Enterprise Value/Ebitda: 16.44
• 1Y Price Target: $81.00
• Price Target Upside: 27.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 5
• EPS Forecast (FY): 1.52
• Revenue Forecast (FY): $934.39M

• Rating: 67 Neutral
• Price Target: $70.00 ▲(10.55% Upside)
• Action: Reiterated Date: 02/26/26
• Date: Action: Reiterated 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 de-risking

A sharp reduction in debt and a stronger equity base materially improves financial flexibility and lowers interest burden. This durable de‑levering supports capital allocation for organic investment, bolt‑on M&A, and gives the company more resilience through industry cycles, improving long‑term solvency metrics.

Sustained revenue and margin expansion

Meaningful revenue scale-up with sizable margin expansion indicates improving operating leverage and pricing/engineering discipline. These structural improvements increase durable cash‑earning capacity and better support reinvestment, debt service and potential shareholder returns if maintained across cycles.

High backlog and large pipeline

A near‑term revenue backlog and multi‑billion pipeline provide visibility into sales conversion for multiple quarters. This lasting top‑line coverage underpins the upgraded guidance and supports sustained growth expectations tied to regulatory and energy‑transition investment demand rather than transient market swings.

Negative Factors

Weak cash conversion

Negative free cash flow and a steep drop in operating cash flow signal working‑capital timing or project‑billing gaps that can persist across quarters. This erodes financial flexibility, may force reliance on credit for growth or integration, and increases sensitivity to execution risks despite reported profitability.

Acquisition integration and leverage risk

The Thermon merger materially increases scale but raises pro‑forma leverage and requires months of integration. Unproven synergies and execution complexity can strain management bandwidth, absorb cash, and compress margins if cross‑sell or cost plans underdeliver, creating a multi‑month to multi‑year execution risk.

Added cyclicality from Thermon mix

Bringing Thermon into the group increases exposure to energy‑sector cycles, potentially amplifying revenue volatility across commodity cycles. Even with diversification benefits, legacy cyclicality can reduce predictability of orders and aftermarket cadence, challenging stable long‑term planning and cash flow visibility.

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

Income statement and balance sheet are strong (material margin expansion and sharply reduced debt), but TTM cash generation is a clear weakness with operating cash flow down and free cash flow negative, raising near-term cash-conversion risk.

Income Statement

Profitability and growth have improved materially. Revenue accelerated strongly in recent years, reaching $774.4M in TTM (Trailing-Twelve-Months) (+7.8%), versus ~$316.0M in 2020, and margins expanded meaningfully: net margin rose to ~7.2% in TTM (Trailing-Twelve-Months) from ~2.3% in 2023 and ~0.4% in 2021. Operating profitability also strengthened, with EBIT margin up to ~13.5% in TTM (Trailing-Twelve-Months) versus ~5.5% in 2024. The main weakness is historical volatility—earlier years showed thinner profitability—and the recent margin step-up should be monitored for durability.

Balance Sheet

The balance sheet shows a sharp de-risking and stronger returns. Total debt dropped dramatically to $24.8M in TTM (Trailing-Twelve-Months) from $249.9M in 2024, pushing debt relative to equity down to ~0.08 from ~1.01. Equity is solid at $317.5M on $893.8M of assets, and return on equity improved to ~18.2% in TTM (Trailing-Twelve-Months) (up from ~5.2% in 2024). A key watch item is the large year-over-year change in leverage, which raises questions about one-time actions (e.g., refinancing, asset sale, or capital actions) even though the end state is clearly stronger.

Cash Flow

Cash generation weakened sharply in TTM (Trailing-Twelve-Months). Operating cash flow fell to $5.9M and free cash flow turned negative (-$2.8M), a notable reversal from positive free cash flow in 2022–2024 (including $36.3M in 2023). Cash flow also lagged reported profitability in TTM (Trailing-Twelve-Months), with free cash flow negative relative to net income, suggesting working-capital or investment outflows are pressuring near-term cash conversion. The positive is that the company has demonstrated the ability to generate solid cash flow in prior years, but the current trajectory is a clear weakness.

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	76.59M	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

• Technical Analysis Sentiment: Neutral
• Last Price: 63.32
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CECO, the sentiment is Neutral. The current price of 63.32 is below the 20-day moving average (MA) of 72.18, below the 50-day MA of 66.71, and above the 200-day MA of 48.44, indicating a neutral trend. The MACD of 0.50 indicates Positive momentum. The RSI at 39.67 is Neutral, neither overbought nor oversold. The STOCH value of 15.72 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CECO.

Ceco Environmental Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ERII	71 Outperform	$851.26M	47.37	9.41%	―	0.10%	1.50%
CECO	67 Neutral	$2.14B	47.58	17.71%	―	29.86%	331.33%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
FTEK	54 Neutral	$41.33M	-14.49	-7.10%	―	-5.66%	-397.46%
CLIR	48 Neutral	$31.50M	-4.95	-53.13%	―	-49.70%	-2.72%
SCWO	48 Neutral	$44.85M	-2.27	-232.63%	―	―	―
PCT	48 Neutral	$1.54B	-6.16	-147.56%	―	―	12.57%

Ceco Environmental Corporate Events

Ceco Environmental to Acquire Thermon in Strategic Merger

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 solutions. The transaction, unanimously approved by both boards and expected to close in mid-2026, will see Thermon shareholders receive a mix of cash and CECO stock at a premium, with Thermon investors owning roughly 37.5% of the enlarged group.

The combination is designed to extend CECO’s reach into industrial process heating, heat tracing and thermal management, broadening its portfolio in mission-critical applications tied to energy transition, decarbonization and infrastructure spending. CECO expects about $40 million of annual cost synergies within 36 months, a more diversified revenue mix with greater aftermarket exposure, and an enhanced growth and financial profile, while governance will be reshaped to add two Thermon directors to CECO’s expanded board.

The most recent analyst rating on (CECO) stock is a Buy with a $73.00 price target. To see the full list of analyst forecasts on Ceco Environmental stock, see the CECO Stock Forecast page.

Ceco Environmental Reports New Direct Financial Obligation Filing

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 specific events. As a result, no substantive information about transactions, strategic initiatives, financial performance, or impacts on stakeholders can be derived from this release alone.

The most recent analyst rating on (CECO) stock is a Buy with a $74.00 price target. To see the full list of analyst forecasts on Ceco Environmental stock, see the CECO Stock Forecast page.