Federal Signal (FSS) AI Stock Analysis

• Market Cap: $6.91B
• Dividend Yield: 0.43%
• Average Volume (3M): 513.23K
• Price to Earnings (P/E): 29.7
• Beta (1Y): 1.17
• 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: 644,025
• 30 Day Avg. Volume: 513,229
• 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: 1.08
• Enterprise Value/Revenue: 3.65
• Enterprise Value/Gross Profit: 12.70
• Enterprise Value/Ebitda: 18.85
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 73 Outperform
• Price Target: $129.00 ▲(11.43% Upside)

Federal Signal's strong financial performance and positive earnings call sentiment are the primary drivers of its overall score. The company's robust growth and strategic initiatives are promising, though valuation concerns and technical indicators suggest caution. The stock's overvaluation and bearish technical signals temper the otherwise positive outlook.

Positive Factors

Revenue Growth

Consistent revenue growth indicates strong demand for Federal Signal's products, reflecting a robust business model and market position.

Strategic Acquisition

The acquisition of New Way Trucks expands Federal Signal's product offerings and market reach, enhancing long-term competitive advantage.

Strong Cash Flow

Robust cash flow generation supports Federal Signal's ability to invest in growth opportunities and maintain financial stability.

Negative Factors

Rising Debt Levels

Increasing debt levels could strain Federal Signal's financial flexibility, potentially impacting future investment capacity and risk profile.

Increased Operating Expenses

Rising operating expenses may pressure margins and reduce profitability if not managed effectively over the long term.

Impact of Tariff and Trade Policies

Tariff and trade policy uncertainties could affect Federal Signal's cost structure and profitability, posing a risk to future earnings stability.

Federal Signal Business Overview & Revenue Model

Company Description

Federal Signal Corporation (FSS) is a leading provider of products and solutions for the emergency response, safety, and security markets. Headquartered in Oak Brook, Illinois, the company operates primarily in two sectors: the Emergency Response and Safety and Security segments. FSS manufactures a wide range of core products, including warning sirens, light bars, and other signaling devices, as well as advanced communication systems and vehicle equipment tailored for public safety and industrial applications.

How the Company Makes Money

Federal Signal generates revenue through the sale of its diverse product offerings and services across its two main segments. The Emergency Response segment contributes significantly to its earnings by providing essential equipment used by law enforcement, fire, and emergency medical services. This includes sirens, lights, and vehicle equipment. The Safety and Security segment focuses on providing products for the industrial market, including environmental monitoring systems and safety equipment. Key revenue streams also include maintenance and service contracts, which offer ongoing support for installed products. The company benefits from partnerships with government agencies, municipalities, and private sector clients, enhancing its reach and reliability in the market. Additionally, Federal Signal invests in innovation and technology, which helps to maintain a competitive edge and attract new customers.

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: Negative
• Last Price: 115.77
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FSS, the sentiment is Negative. The current price of 115.77 is below the 20-day moving average (MA) of 118.53, below the 50-day MA of 120.67, and above the 200-day MA of 102.86, indicating a neutral trend. The MACD of -2.82 indicates Positive momentum. The RSI at 37.52 is Neutral, neither overbought nor oversold. The STOCH value of 16.89 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative 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	42.28	11.76%	0.78%	6.88%	42.07%
ATMU	78 Outperform	$4.05B	20.67	71.52%	0.41%	3.72%	11.71%
CECO	77 Outperform	$1.85B	36.65	18.85%	―	29.86%	331.33%
FSS	73 Outperform	$6.91B	29.66	19.08%	0.43%	11.83%	11.08%
ERII	68 Neutral	$744.79M	41.29	9.41%	―	0.10%	1.50%
Sector *	63 Neutral	$10.79B	15.43	7.44%	2.01%	2.89%	-14.66%
PCT	38 Underperform	$1.83B	―	-147.56%	―	―	12.57%

Federal Signal Corporate Events

Federal Signal Reports Strong Q3 Growth and Raises Outlook

Federal Signal Corporation, a prominent player in the environmental and safety solutions sector, has reported robust financial results for the third quarter of 2025, showcasing significant growth in both net sales and operating income. The company, known for its innovative products and solutions that cater to municipal, governmental, industrial, and commercial customers, continues to strengthen its market position with strategic initiatives.

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.

The most recent analyst rating on (FSS) stock is a Buy with a $144.00 price target. To see the full list of analyst forecasts on Federal Signal stock, see the FSS Stock Forecast page.

Federal Signal’s Earnings Call Highlights Record Growth

Federal Signal Corporation’s recent earnings call painted a picture of robust financial health and optimistic future prospects. The company reported record-setting results, with significant year-over-year growth across various key metrics. Despite some increased expenses, the strong demand, impressive order intake, and raised guidance for 2025 indicate a positive outlook for the company.

Federal Signal Reports Strong Q2 Growth and Raises Outlook

Federal Signal Corporation, a prominent player in the environmental and safety solutions sector, has reported a robust financial performance for the second quarter of 2025, showcasing significant growth in net sales and operating income. The company, known for its high-quality equipment that serves municipal, governmental, industrial, and commercial customers, continues to expand its market presence with strategic initiatives.