Investor ConcernsThere had been building investor concern heading into the print about slowing municipal and industrial demand following two successive quarters of year-over-year ESG order declines.
Production ChallengesProduction challenges continue to impede two of Federal Signal’s largest product categories: street sweepers manufactured in Elgin and sewer cleaners in Streator, Illinois.
Valuation ConcernsDespite strong fundamentals, valuation is not inexpensive—FSS trades at ~13x NTM EV/EBITDA, which is above peers.