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Comfort Systems USA (FIX)
NYSE:FIX
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Comfort Systems
(NYSE:FIX)
71Outperform
Positive Factors
Financial Performance
4Q24 results were ahead of expectations across both the top and bottom-lines as revenue and margin performance meaningfully outperformed in both segments.
Growth Potential
The demand outlook for Comfort Systems USA is strong, driven by cyclical tailwinds in manufacturing and tech/datacenters, which are expected to support continued double-digit organic growth.
Strategic Positioning
The company's datacenter business is well-positioned to gain market share due to its modular capabilities, amid rising datacenter construction driven by Generative AI.
Negative Factors
Market Reaction
Despite the quite strong quarterly performance, a negative share price reaction was due to a number of factors including general market weakness and high expectations.
Order Performance
Total orders declined 2% y/y.
Comfort Systems (FIX) vs. S&P 500 (SPY)
Market Cap
$11.10B
Dividend Yield0.43%
Average Volume (3M)606.27K
Price to Earnings (P/E)21.4
Beta (1Y)1.73
Revenue Growth34.97%
EPS Growth62.08%
CountryUS
Employees18,300
SectorIndustrials
Sector Strength61
IndustryEngineering & Construction
Share Statistics
EPS (TTM)14.61
Shares Outstanding35,553,062
10 Day Avg. Volume658,969
30 Day Avg. Volume606,271
Financial Highlights & Ratios
PEG Ratio0.34
Price to Book (P/B)N/A
Price to Sales (P/S)1.78
Price to Cash Flow (P/CF)14.90
P/FCF Ratio14.70
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$506.00Price Target Upside41.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering5
Comfort Systems Business Overview & Revenue Model
Company DescriptionComfort Systems USA, Inc. provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States. It engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) systems; and renovation, expansion, maintenance, monitoring, repair, and replacement of existing buildings. The company offers its services for heating, ventilation, and air conditioning (HVAC) systems, as well as plumbing, piping and controls, off-site construction, electrical, monitoring, and fire protection. It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets. Comfort Systems USA, Inc. was founded in 1917 and is headquartered in Houston, Texas.
How the Company Makes MoneyComfort Systems USA generates revenue primarily through its mechanical contracting services, which include the design and installation of HVAC systems for new construction and retrofitting projects. The company also earns significant income from maintenance and repair services, which provide a recurring revenue stream. In addition to HVAC services, Comfort Systems offers plumbing, electrical, and other mechanical services, further diversifying its revenue base. Strategic partnerships with major equipment manufacturers and suppliers enhance its service offerings, while its national footprint allows it to undertake large-scale projects and service agreements across various industries. The company's ability to provide comprehensive mechanical solutions and its focus on long-term service contracts contribute significantly to its earnings.
Comfort Systems Financial Statement Overview
Summary
Comfort Systems exhibits robust financial health with significant revenue and profit growth, strong cash flow generation, and a stable balance sheet. The company is effectively managing costs and delivering impressive returns on equity, with minimal risks in the current financial trajectory.Income Statement
Comfort Systems has demonstrated strong revenue growth over the past years, with a notable increase from $2.62 billion in 2019 to $7.03 billion in 2024. The gross profit margin improved to 21% in 2024, while the net profit margin increased to 7.43%, indicating enhanced profitability. EBIT and EBITDA margins have also shown improvement, reflecting effective cost management and operational efficiency.85
Very Positive
Balance Sheet
The company maintains a solid balance sheet with a low debt-to-equity ratio of 0.16 as of 2024, suggesting prudent debt management. The equity ratio stands at 36.18%, providing a stable financial base. Return on equity has improved significantly, reaching 30.64% in 2024, showcasing strong returns for shareholders.78
Positive
Cash Flow
Comfort Systems has achieved substantial growth in free cash flow, with a rise to $737.99 million in 2024. The operating cash flow to net income ratio of 1.62 indicates strong cash generation relative to net earnings. The company effectively converts its profits into cash, supporting its investment and financing activities.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 7.03B | 5.21B | 4.14B | 3.07B | 2.86B | Gross Profit |
| 1.48B | 990.51M | 741.61M | 563.21M | 546.98M | EBIT |
| 749.37M | 418.39M | 171.05M | 188.44M | 128.63M | EBITDA |
| 817.10M | 497.65M | 352.45M | 282.51M | 276.90M | Net Income Common Stockholders |
| 522.43M | 323.40M | 245.95M | 143.35M | 150.14M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 549.94M | 205.15M | 57.21M | 58.78M | 54.90M | Total Assets |
| 4.71B | 3.31B | 2.60B | 2.21B | 1.76B | Total Debt |
| 308.60M | 256.77M | 256.25M | 514.78M | 235.73M | Net Debt |
| -241.34M | 51.62M | 199.03M | 456.00M | 180.84M | Total Liabilities |
| 3.01B | 2.03B | 1.60B | 1.40B | 1.06B | Stockholders Equity |
| 1.70B | 1.28B | 999.92M | 805.67M | 696.43M |
| Cash Flow | Free Cash Flow | |||
| 737.99M | 544.73M | 253.17M | 157.82M | 262.38M | Operating Cash Flow |
| 849.06M | 639.57M | 301.53M | 180.15M | 286.51M | Investing Cash Flow |
| -343.51M | -193.01M | -97.18M | -246.72M | -207.80M | Financing Cash Flow |
| -160.76M | -298.62M | -205.91M | 70.45M | -74.60M |
Comfort Systems Technical Analysis
Neutral
356.77
Price Trends
367.41
Negative
417.36
Negative
385.45
Negative
Market Momentum
-12.34
Negative
41.67
Neutral
21.88
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FIX, the sentiment is Neutral. The current price of 356.77 is above the 20-day moving average (MA) of 337.92, below the 50-day MA of 367.41, and below the 200-day MA of 385.45, indicating a neutral trend. The MACD of -12.34 indicates Negative momentum. The RSI at 41.67 is Neutral, neither overbought nor oversold. The STOCH value of 21.88 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for FIX.
Comfort Systems Risk Analysis
Comfort Systems disclosed 41 risk factors in its most recent earnings report. Comfort Systems 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
Comfort Systems Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $11.59B | 24.85 | 26.35% | 1.05% | 8.89% | 669.67% | |
77 Outperform | $15.94B | 16.29 | 37.25% | 0.28% | 15.76% | 61.64% | |
72 Outperform | $9.66B | 59.29 | 5.80% | ― | 2.56% | ― | |
71 Outperform | $11.10B | 21.37 | 35.03% | 0.43% | 34.97% | 62.08% | |
68 Neutral | $8.40B | 13.58 | 26.09% | ― | 2.60% | 5.15% | |
67 Neutral | $9.89B | ― | 8.59% | ― | 1.30% | -36.24% | |
62 Neutral | $7.67B | 13.25 | 3.04% | 3.47% | 3.63% | -13.99% |
* Industrials Sector Average
Performance Comparison
FIX
Comfort Systems
356.77
47.82
15.48%
ACM
Aecom Technology
94.99
0.66
0.70%
EME
EMCOR Group
391.00
39.45
11.22%
MTZ
MasTec
121.85
29.94
32.58%
BLD
TopBuild
297.13
-124.32
-29.50%
APG
APi Group
35.28
-4.10
-10.41%
Comfort Systems Earnings Call Summary
Earnings Call Date: Feb 20, 2025 | % Change Since: -6.52% | Next Earnings Date: Apr 23, 2025
Earnings Call Sentiment Positive
The earnings call presented numerous positive outcomes, including record earnings, strong revenue growth, high backlog, and improved margins. The company also highlighted successful acquisitions and increased shareholder returns. However, the impact of deferred tax payments and anticipated tough comparables in 2025 were noted as challenges.Highlights
Record Annual and Quarterly Earnings
Comfort Systems USA reported record annual and fourth quarter earnings with a 60% increase in quarterly earnings per share from last year, reaching $4.09 per share.
Strong Revenue Growth
Revenue for the fourth quarter increased by 38% to $1.9 billion, and full year revenue increased by 35% to $7 billion compared to 2023.
Significant Backlog Growth
The backlog reached a new all-time high of $6 billion, with a same-store increase in both sequential and year-over-year backlog.
High Operating Cash Flow
Operating cash flow for 2024 was $849 million, contributing to a full year free cash flow of $1.176 billion.
Improved Gross Margins
Gross profit margin for the fourth quarter increased to 23.2% from 20.6% in the previous year, with similar improvements across both mechanical and electrical segments.
Successful Acquisitions
Recently acquired companies surpassed expectations, and the addition of Century Contract is expected to bring in $90 million of revenue.
Dividend Increase
The quarterly dividend was increased by five cents to forty cents per share, reflecting strong cash flow and commitment to shareholder returns.
Lowlights
Deferred Tax Payment Impact
An $80 million tax payment was deferred to the first quarter of 2025 due to Hurricane Barrel, affecting cash flow timing.
Tough Comparable Expected in 2025
Facing a tough comparable in 2025, with expectations of high single-digit percentage growth in same store revenue.
Company Guidance
In the fourth quarter of 2024, Comfort Systems USA reported a remarkable financial performance with a 38% increase in revenue to $1.9 billion compared to the previous year, and a full-year revenue of $7 billion, marking a 35% increase from 2023. The company achieved a record quarterly earnings per share of $4.09, up 60% from the prior year, and $14.60 for the full year, compared to $9.01 in 2023. Operating income surged by 88% to $226 million for the quarter, with an operating income percentage rising to 12.1% from 8.9% in the previous year. Gross profit reached $434 million for the quarter, improving by $154 million from a year ago, with a gross profit margin of 23.2%, up from 20.6%. The company's backlog hit an all-time high of $6 billion, and its free cash flow for the year was an impressive $1.176 billion. Comfort Systems USA also announced a quarterly dividend increase of five cents to forty cents per share, reflecting its strong cash flow and commitment to rewarding shareholders.Comfort Systems Corporate Events
Executive/Board Changes
Comfort Systems Announces Board Member Resignation
Neutral
Mar 20, 2025
On March 19, 2025, Comfort Systems USA, Inc. announced that Mr. Vance W. Tang will resign from the Board of Directors and all its committees, effective May 16, 2025, as part of his retirement. This change in the board’s composition may impact the company’s strategic direction and governance, potentially affecting stakeholders and the company’s future operations.
Business Operations and StrategyFinancial Disclosures
Comfort Systems Highlights 2024 Financial Growth and Strategy
Positive
Feb 21, 2025
On February 21, 2025, Comfort Systems USA, Inc. released an investor presentation to its website, showcasing its financial performance and strategic focus areas. The presentation highlighted the company’s use of non-GAAP financial measures to provide supplemental insights into its operations, noting that these figures should not replace GAAP results. The company reported significant growth in revenue and net income for 2024, emphasizing its strong market position and financial stability. The presentation also discussed potential risks and uncertainties affecting future performance, including economic conditions, labor shortages, and competition.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
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.