Federal Signal Corp. (FSS)
NYSE:FSS
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Federal Signal
(NYSE:FSS)
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Rating:74Outperform
Price Target:
$118.00
▲(2.57% Upside)
Action:ReiteratedDate:03/03/26
The score is driven primarily by strong financial performance (growth, margins, and free cash flow) and an upbeat earnings-call outlook with robust 2026 guidance. The main offsets are a relatively expensive valuation (high P/E and low yield) and only moderate technical momentum despite an underlying uptrend.
Positive Factors
Revenue Growth & Market Position
Consistent multi-year revenue expansion and a record 2025 demonstrate durable demand in largely publicly funded and industrial end markets. Scale reinforces market leadership in specialty vehicles and safety systems, supporting an installed base that drives recurring aftermarket revenue and margin resilience over time.
Negative Factors
Higher Leverage
Meaningful increase in leverage in 2025 reduces financial flexibility and raises sensitivity to cash flow volatility. Higher interest and principal obligations limit the company's ability to pursue opportunistic investments or withstand cyclical softening until leverage is rebalanced through cash generation or deleveraging measures.
Read all positive and negative factors
Positive Factors
Negative Factors
Revenue Growth & Market Position
Consistent multi-year revenue expansion and a record 2025 demonstrate durable demand in largely publicly funded and industrial end markets. Scale reinforces market leadership in specialty vehicles and safety systems, supporting an installed base that drives recurring aftermarket revenue and margin resilience over time.
Read all positive factors
Federal Signal (FSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.01B
Dividend Yield0.49%
Average Volume (3M)503.49K
Price to Earnings (P/E)27.1
Beta (1Y)1.07
Revenue Growth11.83%
EPS Growth11.08%
CountryUS
Employees4,700
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)1.16
Shares Outstanding60,892,150
10 Day Avg. Volume388,018
30 Day Avg. Volume503,490
Financial Highlights & Ratios
PEG Ratio1.86
Price to Book (P/B)4.78
Price to Sales (P/S)3.03
P/FCF Ratio29.07
Enterprise Value/Market Cap1.08
Enterprise Value/Revenue3.46
Enterprise Value/Gross Profit12.12
Enterprise Value/Ebitda17.98
Forecast
1Y Price Target
$140.00Price Target Upside21.70% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)4.71
Revenue Forecast (FY)$2.61B
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, an...
How the Company Makes Money
Federal Signal makes money primarily by selling engineered equipment and safety/security systems, plus recurring revenue from aftermarket parts, service, and support. (1) Environmental Solutions revenue is largely generated from the sale of capita...
Federal Signal Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:May 05, 2026
Earnings Call Sentiment Positive
The call highlighted broad-based, record-setting financial performance across revenue, EBITDA, EPS, orders, and cash generation, driven by strong organic growth, segment execution (ESG and SSG), and strategic M&A (New Way and MEGA). Management provided constructive 2026 guidance and emphasized balance-sheet flexibility. Near-term headwinds are mostly related to acquisition and integration costs, acquired backlog that inflates short-term orders, amortization and tax normalization, and the mechanical transition away from third-party refuse sales (an $80M backlog unwind). On balance, the positives — including robust top-line and margin expansion, strong cash flow, and clear synergy targets — materially outweigh the manageable near-term challenges.Positive Updates
Record Full-Year Financial Performance (2025)
Net sales of $2,180,000,000, a company record, up $319,000,000 or 17% year-over-year; organic net sales growth of $205,000,000 or 11%. Operating income $340,900,000, up $59,500,000 or 21%. Net income $246,600,000, up $30,300,000 or 14%. Adjusted EBITDA $438,900,000, up $88,300,000 or 25%, with margin of 20.1% (up 130 basis points). GAAP diluted EPS $4.10 (up 15%); adjusted EPS $4.23 (up 27%). Orders for the year $2,220,000,000, up 20%; year-end backlog $1,040,000,000, up 5%.
Negative Updates
Acquisition and Integration-Related Costs
Significant increase in acquisition-related expenses: corporate operating expenses increased to $26,500,000 in Q4 vs $10,500,000 last year, largely driven by a $13,300,000 recognition of acquisition-related expenses (up from $300,000 prior-year). Included $6,800,000 increase in fair value of contingent consideration tied to Hog and Standard and other integration costs.
Read all updates
Q4-2025 Updates
Positive
Negative
Record Full-Year Financial Performance (2025)
Net sales of $2,180,000,000, a company record, up $319,000,000 or 17% year-over-year; organic net sales growth of $205,000,000 or 11%. Operating income $340,900,000, up $59,500,000 or 21%. Net income $246,600,000, up $30,300,000 or 14%. Adjusted EBITDA $438,900,000, up $88,300,000 or 25%, with margin of 20.1% (up 130 basis points). GAAP diluted EPS $4.10 (up 15%); adjusted EPS $4.23 (up 27%). Orders for the year $2,220,000,000, up 20%; year-end backlog $1,040,000,000, up 5%.
Read all positive updates
Company Guidance
For 2026 the company guided full‑year net sales of $2.55–$2.65 billion and adjusted EPS of $4.50–$4.80 (midpoint would be a record adjusted EPS), implying roughly 17–22% revenue growth year‑over‑year with about 5–9% organic contribution and the remainder from acquisitions (notably New Way and MEGA); management expects an approximate 25% tax rate (excluding discrete benefits), CapEx of $45–$55 million (about half growth‑focused, half maintenance), Q1 sales and earnings to be seasonally lower, New Way to be roughly adjusted‑EPS neutral in 2026 with $15–$20 million of targeted synergies by 2028 (≈50/50 cost vs. revenue), MEGA to be modestly accretive to cash flow and EPS in 2026, the remaining $80 million of third‑party refuse backlog to be delivered over the next four quarters, an aggregate $0.16/share headwind from higher acquisition‑related amortization and tax normalization, and continued emphasis on a long‑term target of low double‑digit top‑line growth split roughly evenly between inorganic and organic while maintaining financial flexibility (net debt $501 million, $925 million available under the new five‑year credit facility) and a cash conversion target of ~100% (103% in 2025).Federal Signal Financial Statement Overview
Summary
Income Statement
84
Very Positive
Balance Sheet
72
Positive
Cash Flow
79
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 2.18B | 1.86B | 1.72B | 1.43B | 1.21B |
| Gross Profit | 612.80M | 533.00M | 450.20M | 344.90M | 288.70M |
| EBITDA | 419.10M | 341.70M | 283.10M | 215.90M | 172.50M |
| Net Income | 246.60M | 216.30M | 157.40M | 120.40M | 100.60M |
Balance Sheet | |||||
| Total Assets | 2.39B | 1.77B | 1.62B | 1.52B | 1.37B |
| Cash, Cash Equivalents and Short-Term Investments | 63.70M | 91.10M | 61.00M | 47.50M | 40.50M |
| Total Debt | 594.60M | 252.40M | 320.70M | 388.40M | 313.70M |
| Total Liabilities | 1.01B | 579.10M | 618.60M | 663.40M | 582.10M |
| Stockholders Equity | 1.38B | 1.19B | 1.00B | 860.90M | 784.00M |
Cash Flow | |||||
| Free Cash Flow | 227.10M | 190.70M | 164.10M | 18.80M | 64.40M |
| Operating Cash Flow | 254.70M | 231.30M | 194.40M | 71.80M | 101.80M |
| Investing Cash Flow | -527.90M | -78.90M | -83.70M | -99.70M | -168.70M |
| Financing Cash Flow | 244.50M | -121.00M | -97.90M | 35.50M | 26.40M |
Federal Signal Technical Analysis
Positive
115.04
Price Trends
112.22
Positive
112.07
Positive
115.26
Negative
Market Momentum
0.30
Negative
59.78
Neutral
82.88
Negative
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 115.04 is above the 20-day moving average (MA) of 108.85, above the 50-day MA of 112.22, and below the 200-day MA of 115.26, indicating a neutral trend. The MACD of 0.30 indicates Negative momentum. The RSI at 59.78 is Neutral, neither overbought nor oversold. The STOCH value of 82.88 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FSS.
Federal Signal Risk Analysis
Federal Signal disclosed 21 risk factors in its most recent earnings report. Federal Signal 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
Federal Signal Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.96B | 39.60 | 12.56% | 0.80% | 6.88% | 42.07% | |
74 Outperform | $7.01B | 27.15 | 19.09% | 0.49% | 11.83% | 11.08% | |
67 Neutral | $2.11B | 42.25 | 16.53% | ― | 29.86% | 331.33% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $5.15B | 20.57 | 63.97% | 0.39% | 3.72% | 11.71% | |
61 Neutral | $586.93M | 31.61 | 11.92% | ― | 0.10% | 1.50% | |
48 Neutral | $1.07B | -8.44 | -161.85% | ― | ― | 12.57% |
* Industrials Sector Average
FSS
Federal Signal
115.04
39.28
51.85%
CECO
Ceco Environmental
64.24
43.68
212.45%
ERII
Energy Recovery
11.11
-3.77
-25.34%
ZWS
Zurn Water Solutions
47.74
18.53
63.46%
PCT
PureCycle Technologies
5.94
-0.52
-8.05%
ATMU
Atmus Filtration Technologies, Inc.
63.20
29.56
87.85%
Federal Signal Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Federal Signal Highlights 2025 Results and Strategic Expansion
Positive
Mar 2, 2026
On March 2, 2026, Federal Signal Corporation released an investor presentation summarizing its unaudited 2025 financial results and strategic positioning. The deck highlights that consolidated net sales reached $2.18 billion in 2025, reflecting a ...
Business Operations and StrategyM&A Transactions
Federal Signal completes acquisition of specialty vehicle maker
Positive
Jan 16, 2026
On January 16, 2026, Federal Signal Corporation completed its acquisition of Mega Corp., a leading manufacturer of specialty vehicles and equipment serving global metal extraction and construction markets, following the signing of a definitive agr...
Business Operations and StrategyStock BuybackDividendsFinancial DisclosuresM&A Transactions
Federal Signal Highlights Growth, Investments in Investor Presentation
Positive
Jan 14, 2026
On January 14, 2026, Federal Signal Corporation posted an investor presentation to its website outlining its financial profile, business mix and recent strategic investments, including capacity expansions and acquisitions such as Hog Technologies ...
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.