Ceco Environmental Corp. (CECO)
NASDAQ:CECO
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Ceco Environmental
(NASDAQ:CECO)
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Rating:67Neutral
Price Target:
$94.00
▲(44.02% Upside)
Action:Downgraded
Date:05/28/26
The score is primarily supported by strong operational momentum and raised guidance from the latest earnings call, plus a clear bullish technical trend. This is tempered by weak recent cash conversion/negative free cash flow and a very high P/E that creates valuation risk.
Positive Factors
Thermon merger / scale
The approved Thermon combination is a structural growth catalyst: it materially increases scale, broadens product breadth (thermal + environmental), and creates $40M of targeted cost synergies. Over 2-6 months integration can unlock cross-sell, larger bids, and a higher recurring aftermarket base, supporting sustained revenue and margin expansion if execution stays on plan.
Negative Factors
Weak cash generation
Recent negative free cash flow and weak cash conversion are durable red flags: ongoing cash deficits can force external financing, draw on facilities, or delay capex/ERP investments. If cash conversion does not normalize, the company may face constrained liquidity during integration, higher financing costs, or slower realization of backlog into cash receipts over the coming quarters.
Read all positive and negative factors
Positive Factors
Negative Factors
Thermon merger / scale
The approved Thermon combination is a structural growth catalyst: it materially increases scale, broadens product breadth (thermal + environmental), and creates $40M of targeted cost synergies. Over 2-6 months integration can unlock cross-sell, larger bids, and a higher recurring aftermarket base, supporting sustained revenue and margin expansion if execution stays on plan.
Read all positive factors
Ceco Environmental (CECO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.99B
Dividend YieldN/A
Average Volume (3M)814.52K
Price to Earnings (P/E)155.6
Beta (1Y)0.99
Revenue Growth32.11%
EPS Growth-71.47%
CountryUS
Employees1,600
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)0.49
Shares Outstanding35,873,030
10 Day Avg. Volume834,405
30 Day Avg. Volume814,517
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 Cap0.89
Enterprise Value/Revenue3.28
Enterprise Value/Gross Profit9.57
Enterprise Value/Ebitda34.27
Forecast
1Y Price Target
$88.33Price Target Upside35.34% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)1.67
Revenue Forecast (FY)$968.28M
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 primarily makes money by selling engineered environmental and industrial process equipment and by providing associated services over the lifecycle of that equipment. Key revenue streams generally include: (1) New equipment and engineered syst...
Ceco Environmental Earnings Call Summary
Earnings Call Date:Apr 28, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Aug 04, 2026
Earnings Call Sentiment Positive
The call presents a strongly positive operational and bookings narrative: record orders, record backlog, broadened sales pipeline (> $7B), sizable April orders including a ~$300M mega‑order, double‑digit revenue growth (17% YoY) and material adjusted EBITDA expansion (46% YoY in Q1; TTM margin expansion). Management raised full‑year standalone guidance and remains confident in the Thermon acquisition and $40M of cost synergies, while noting expected margin recovery later in the year. Key negatives are near‑term margin compression from prior divestiture and project timing, seasonal Q1 cash consumption (exacerbated by a delayed ~$20M payment), modestly higher debt/leverage, and some Middle East timing risk. Overall, the positive operational momentum, record backlog and raised guidance outweigh the near‑term cash and margin headwinds.Positive Updates
Record Orders and Backlog
Orders of $449 million in Q1 2026, a company record and a 97% increase year‑over‑year. Backlog reached a record $1.035 billion, up ~72% YoY and up $242 million sequentially (31%). Book-to-bill in the quarter was ~2.2x and trailing 12-month bookings were $1.286 billion (up 71% YoY).
Negative Updates
Gross Margin Contraction in Q1
Gross profit growth was modest in Q1 (up ~3% QoQ for the quarter) while revenue jumped 17% YoY, reflecting margin compression. Management attributed contraction to the prior‑year sale of the higher‑margin Global Pump Solutions business and timing/quality mix from lower‑margin jobs booked in early 2025; target gross profit margin of 34%+ not yet achieved but expected to trend higher later in the year.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Orders and Backlog
Orders of $449 million in Q1 2026, a company record and a 97% increase year‑over‑year. Backlog reached a record $1.035 billion, up ~72% YoY and up $242 million sequentially (31%). Book-to-bill in the quarter was ~2.2x and trailing 12-month bookings were $1.286 billion (up 71% YoY).
Read all positive updates
Company Guidance
CECO raised its full-year 2026 guidance (the second raise this year and not inclusive of Thermon) to revenue of $940 million to $1.0 billion (midpoint implying ~25% organic sales growth) and adjusted EBITDA of $120 million to $140 million (midpoint implying ~44% EBITDA growth and ~170 bps of margin expansion), driven by record backlog of $1.035 billion (up ~72% YoY), Q1 orders of $449 million (up 97%, book-to-bill ~2.2), a >$7 billion sales pipeline, and April bookings already north of $400 million (including a roughly $300 million largest-ever order); Q1 results included revenue of $206 million (up 17%), adjusted EBITDA of $20.4 million (up 46%, ~10% margin), trailing‑12‑month revenue of $804 million (up 32%) and adjusted EBITDA of $96.7 million (12% margin, with the company expecting to cross $100 million TTM adjusted EBITDA shortly), while the company reiterated Thermon closing in early June with $40 million of expected cost synergies.Ceco Environmental Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
80
Positive
Cash Flow
38
Negative
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 812.38M | 774.38M | 557.93M | 544.85M | 422.63M | 324.14M |
| Gross Profit | 278.45M | 253.06M | 196.15M | 171.02M | 128.22M | 100.92M |
| EBITDA | 77.75M | 128.64M | 45.23M | 47.45M | 38.33M | 21.89M |
| Net Income | 17.12M | 50.05M | 12.96M | 12.91M | 17.42M | 1.43M |
Balance Sheet | ||||||
| Total Assets | 1.03B | 893.77M | 759.70M | 600.29M | 504.72M | 416.20M |
| Cash, Cash Equivalents and Short-Term Investments | 45.41M | 33.14M | 37.83M | 54.78M | 45.52M | 29.90M |
| Total Debt | 28.45M | 24.84M | 249.92M | 155.48M | 123.53M | 75.56M |
| Total Liabilities | 710.17M | 570.59M | 507.81M | 362.80M | 286.57M | 210.24M |
| Stockholders Equity | 312.20M | 317.53M | 247.69M | 232.64M | 213.22M | 204.55M |
Cash Flow | ||||||
| Free Cash Flow | 4.12M | -5.48M | 7.46M | 36.26M | 26.27M | 10.68M |
| Operating Cash Flow | 23.42M | 5.86M | 24.83M | 44.65M | 29.65M | 13.30M |
| Investing Cash Flow | -6.98M | -1.08M | -105.31M | -56.49M | -48.26M | -2.08M |
| Financing Cash Flow | -138.87M | -11.56M | 65.91M | 21.14M | 38.18M | -15.56M |
Ceco Environmental Technical Analysis
Neutral
65.27
Price Trends
70.79
Positive
68.08
Positive
59.88
Positive
Market Momentum
3.06
Positive
45.79
Neutral
44.59
Neutral
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 65.27 is below the 20-day moving average (MA) of 81.90, below the 50-day MA of 70.79, and above the 200-day MA of 59.88, indicating a neutral trend. The MACD of 3.06 indicates Positive momentum. The RSI at 45.79 is Neutral, neither overbought nor oversold. The STOCH value of 44.59 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral 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 | $2.99B | 155.60 | 5.54% | ― | 32.11% | -71.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $444.84M | 20.89 | 10.89% | ― | -3.05% | 4.46% | |
57 Neutral | $47.06M | -15.65 | -7.34% | ― | -0.69% | 1.97% | |
52 Neutral | $2.33B | -9.95 | -408.05% | ― | 590.00% | -15.72% | |
47 Neutral | $24.68M | -4.64 | -53.54% | ― | 73.54% | 17.08% | |
45 Neutral | $45.84M | -1.97 | -338.76% | ― | ― | ― |
* Industrials Sector Average
CECO
Ceco Environmental
74.75
47.69
176.24%
ERII
Energy Recovery
8.17
-4.23
-34.11%
FTEK
Fuel Tech
1.48
-0.12
-7.50%
CLIR
ClearSign Combustion
4.63
-2.25
-32.73%
SCWO
374Water
2.47
-3.01
-54.93%
PCT
PureCycle Technologies
12.39
3.09
33.23%
Ceco Environmental Corporate Events
Business Operations and StrategyM&A TransactionsShareholder Meetings
CECO Environmental Shareholders Overwhelmingly Approve Thermon Merger
Positive
May 28, 2026
On May 27, 2026, CECO Environmental stockholders approved several key proposals at their annual meeting, including the issuance of new shares to facilitate its merger with Thermon Group Holdings, the election of eight directors, an advisory endors...
Business Operations and StrategyM&A TransactionsRegulatory Filings and Compliance
CECO Environmental Advances Proposed Merger With Thermon Group
Neutral
Apr 2, 2026
CECO Environmental and Thermon Group are moving forward with a proposed merger that will involve issuing new CECO common shares and submitting the deal to both companies’ shareholders for approval. The companies plan to file a Form S-4 regis...
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.