Federal Signal (FSS) AI Stock Analysis

• Market Cap: $6.84B
• Dividend Yield: 0.5%
• Average Volume (3M): 513.84K
• Price to Earnings (P/E): 29.4
• Beta (1Y): 1.11
• Revenue Growth: 11.83%
• EPS Growth: 11.08%
• Country: US
• Employees: 4,700
• Sector: Industrials
• Sector Strength: 72
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 1.14
• Shares Outstanding: 60,808,580
• 10 Day Avg. Volume: 550,459
• 30 Day Avg. Volume: 513,841
• PEG Ratio: 0.70
• Price to Book (P/B): 4.74
• Price to Sales (P/S): 3.02
• P/FCF Ratio: 29.50
• Enterprise Value/Market Cap: 1.09
• Enterprise Value/Revenue: 3.65
• Enterprise Value/Gross Profit: 12.70
• Enterprise Value/Ebitda: 18.85
• 1Y Price Target: $112.00
• Price Target Upside: 0.72% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3
• EPS Forecast (FY): 4.13
• Revenue Forecast (FY): $2.13B

• Rating: 76 Outperform
• Price Target: $126.00 ▲(13.31% Upside)

Federal Signal's overall stock score is driven by its strong financial performance and positive earnings call sentiment, highlighting robust growth and strategic acquisitions. However, the technical analysis indicates potential bearish momentum, and the valuation suggests the stock may be overvalued. The company's strategic acquisitions are expected to support long-term growth, but investors should monitor cash flow trends and market conditions.

Positive Factors

Revenue Growth

The significant growth in net sales indicates strong market demand and effective sales strategies, supporting long-term revenue expansion.

Strategic Acquisitions

These acquisitions expand Federal Signal's market presence and product offerings, expected to be accretive to earnings and cash flow, supporting sustainable growth.

Operational Efficiency

Improved margins reflect efficient cost management and operational effectiveness, enhancing profitability and competitive positioning.

Negative Factors

Decline in Backlog

A declining backlog may indicate potential future revenue challenges, impacting visibility and planning for sustained growth.

Lead Time Challenges

Extended lead times can delay revenue recognition and strain customer relationships, affecting long-term operational efficiency.

Free Cash Flow Decline

A decline in free cash flow growth could constrain investment capacity and financial flexibility, impacting future strategic initiatives.

Federal Signal Business Overview & Revenue Model

Company Description

Federal Signal Corporation, together with its subsidiaries, designs, manufactures, and supplies a suite of products and integrated solutions for municipal, governmental, industrial, and commercial customers in the United States, Canada, Europe, and internationally. It operates through Environmental Solutions Group, and Safety and Security Systems Group. The Environmental Solutions Group segment offers a range of street sweepers, safe-digging trucks ,sewer cleaners, industrial vacuum loaders, vacuum, and hydro-excavation trucks; road-marking, line-removal and waterblasting equipment, dump truck bodies, trailers, and metal extraction support equipment under the Elgin, Vactor, Guzzler, TRUVAC, Westech, Jetstream, Mark Rite Lines, Ox Bodies, Crysteel, J-Craft, Duraclass, Rugby, Travis, OSW, NTE, WTB, Ground Force, Bucks, and Switch-N-Go brand names. It also offers refuse and recycling collection vehicles, camera systems, ice resurfacing equipment, and snow-removal equipment, as well as safety, and security systems. In addition, this segment engages in the sale of parts, service and repair, equipment rental, and training activities. The Safety and Security Systems Group segment provides systems and products for community alerting, emergency vehicles, first responder interoperable communications, and industrial communications. Its products include vehicle lightbars and sirens, industrial signaling equipment, public warning systems, general alarm systems, and public address systems. This segment sells its products under the Federal Signal, Federal Signal VAMA, and Victor brand names. The company sells its products through wholesaler, distributor, independent manufacturer representative, original equipment manufacturer, and direct sales force, as well as independent foreign distributor. Federal Signal Corporation was founded in 1901 and is headquartered in Oak Brook, Illinois.

How the Company Makes Money

Federal Signal generates revenue through the sale of its diverse range of products and services across its two primary segments. Key revenue streams include the sale of emergency warning systems, industrial cleaning equipment, and environmental services. The company benefits from long-term contracts with municipalities and government agencies, providing a stable income source. Additionally, FSS engages in partnerships with other technology firms to integrate advanced solutions, which helps to increase market presence and sales. The company's focus on research and development also allows it to innovate and introduce new products that meet evolving market needs, further contributing to its earnings.

Federal Signal Financial Statement Overview

Summary

Federal Signal demonstrates strong financial health with consistent revenue growth and profitability. The company maintains a stable balance sheet with low leverage and effective equity utilization. While cash flow generation is robust, the recent decline in free cash flow growth is a point to monitor.

Income Statement

Federal Signal has demonstrated strong revenue growth with a TTM increase of 4.09% and consistent profitability, as evidenced by a solid gross profit margin of 29.04% and a net profit margin of 11.22%. The EBIT and EBITDA margins are healthy at 15.37% and 19.05%, respectively, indicating efficient operational management. The company has shown a positive revenue growth trajectory over the years, contributing to its high income statement score.

Balance Sheet

The company maintains a low debt-to-equity ratio of 0.23, reflecting prudent financial leverage. The return on equity is robust at 18.97%, showcasing effective use of shareholder funds to generate profits. The equity ratio stands at 68.19%, indicating a strong equity base relative to total assets. While the balance sheet is stable, the score is slightly moderated by the need for continued equity growth to support expansion.

Cash Flow

Federal Signal's cash flow performance is solid, with an operating cash flow to net income ratio of 0.97, indicating strong cash generation relative to net income. However, the free cash flow growth rate has declined by 3.00% in the TTM, which slightly impacts the cash flow score. The free cash flow to net income ratio of 0.89 suggests efficient cash conversion, but the recent decline in free cash flow growth warrants attention.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.06B	1.86B	1.72B	1.43B	1.21B	1.13B
Gross Profit	590.00M	533.00M	450.20M	344.90M	288.70M	293.60M
EBITDA	397.70M	341.70M	283.10M	215.90M	172.50M	175.10M
Net Income	235.80M	216.30M	157.40M	120.40M	100.60M	96.20M
Balance Sheet
Total Assets	1.94B	1.77B	1.62B	1.52B	1.37B	1.21B
Cash, Cash Equivalents and Short-Term Investments	54.40M	91.10M	61.00M	47.50M	40.50M	81.70M
Total Debt	243.10M	252.40M	320.70M	388.40M	313.70M	233.70M
Total Liabilities	616.70M	579.10M	618.60M	663.40M	582.10M	506.70M
Stockholders Equity	1.32B	1.19B	1.00B	860.90M	784.00M	702.10M
Cash Flow
Free Cash Flow	219.70M	190.70M	164.10M	18.80M	64.40M	106.50M
Operating Cash Flow	248.10M	231.30M	194.40M	71.80M	101.80M	136.20M
Investing Cash Flow	-149.40M	-78.90M	-83.70M	-99.70M	-168.70M	-34.40M
Financing Cash Flow	-118.20M	-121.00M	-97.90M	35.50M	26.40M	-53.40M

Federal Signal Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 111.20
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSS, the sentiment is Positive. The current price of 111.2 is above the 20-day moving average (MA) of 111.19, below the 50-day MA of 114.16, and above the 200-day MA of 105.14, indicating a neutral trend. The MACD of -0.60 indicates Negative momentum. The RSI at 52.46 is Neutral, neither overbought nor oversold. The STOCH value of 53.93 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSS.

Federal Signal Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ZWS	79 Outperform	$7.95B	42.27	11.76%	0.80%	6.88%	42.07%
ATMU	78 Outperform	$4.37B	22.30	71.52%	0.39%	3.72%	11.71%
FSS	76 Outperform	$6.84B	29.38	19.08%	0.50%	11.83%	11.08%
CECO	72 Outperform	$2.09B	41.48	18.85%	―	29.86%	331.33%
ERII	68 Neutral	$745.32M	41.35	9.41%	―	0.10%	1.50%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PCT	38 Underperform	$1.60B	-6.16	-147.56%	―	―	12.57%

Federal Signal Corporate Events

Federal Signal to Acquire Mega Corp in Cash Deal

On December 17–18, 2025, Federal Signal announced a definitive agreement to acquire Mega Corp., a leading manufacturer of specialty vehicles and equipment used in global metal extraction and construction markets, for $45.5 million in cash, including Mega’s manufacturing facility in Albuquerque, New Mexico. Mega, which generated about $40 million in net sales in 2024 with a sizable aftermarket parts business, will deepen Federal Signal’s presence in the metal extraction support equipment market and align with its existing Ground Force and TowHaul operations, with management highlighting opportunities to leverage complementary products, shared customers and expanded global reach. The deal, expected to close in the first quarter of 2026 subject to customary conditions, is projected to be accretive to Federal Signal’s earnings and cash flow in 2026 and will add approximately 95 Mega employees to the company, reinforcing its specialty vehicle platform and aftermarket service capabilities.

Federal Signal Completes Acquisition of New Way Trucks

On November 25, 2025, Federal Signal Corporation completed the acquisition of Scranton Manufacturing Company LLC, known as New Way Trucks, for an initial purchase price of $396 million, with additional consideration for real estate. This acquisition, which adds New Way’s expertise in refuse collection vehicles to Federal Signal’s portfolio, is expected to enhance growth and margins, despite being neutral to adjusted EPS in 2025 and 2026. The company has raised its full-year 2025 net sales and adjusted EPS outlooks, anticipating long-term value creation and EPS accretion by 2028.

Federal Signal Acquires New Way Trucks for $396M

On September 24, 2025, Federal Signal Corporation announced its agreement to acquire Scranton Manufacturing Company Inc., known as New Way Trucks, for $396 million, with additional considerations for facilities and real estate rights. This acquisition, expected to close in the fourth quarter of 2025, marks Federal Signal’s expansion into the refuse collection vehicle market, enhancing its specialty vehicle platform and positioning it for growth in the recession-resilient waste and recycling industry. The transaction is anticipated to be neutral to earnings per share in 2026 but accretive in subsequent years, with significant synergies expected by 2028.