Federal Signal (FSS)
NYSE:FSS
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Federal Signal
(NYSE:FSS)
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Rating:73Outperform
Price Target:
$122.00
▲(6.79% Upside)
Action:Reiterated
Date:05/21/26
The score is driven primarily by strong underlying financial performance (growth, margin improvement, and free-cash-flow strength) and a constructive earnings update with raised full-year guidance. These positives are tempered by weak technical momentum (trading below key moving averages with negative MACD) and a valuation that is not especially cheap, with a low dividend yield.
Positive Factors
Multi-year revenue growth and margin expansion
Sustained top-line growth and meaningful margin improvement over several years indicate durable operational momentum. Higher EBIT and net margins expand internal funding for capex, M&A, and shareholder returns, while supporting resilience to moderate demand cycles in fleet and municipal end markets.
Negative Factors
Higher leverage versus prior year
The step-up in leverage reduces financial flexibility compared with the stronger 2024 position. Higher average debt has already raised interest expense, constraining free cash deployment options and increasing sensitivity to rising rates or weaker cash flows during industry slowdowns.
Read all positive and negative factors
Positive Factors
Negative Factors
Multi-year revenue growth and margin expansion
Sustained top-line growth and meaningful margin improvement over several years indicate durable operational momentum. Higher EBIT and net margins expand internal funding for capex, M&A, and shareholder returns, while supporting resilience to moderate demand cycles in fleet and municipal end markets.
Read all positive factors
Federal Signal (FSS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.11B
Dividend Yield0.49%
Average Volume (3M)449.73K
Price to Earnings (P/E)23.4
Beta (1Y)0.99
Revenue Growth23.25%
EPS Growth28.92%
CountryUS
Employees4,700
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)4.46
Shares Outstanding61,002,254
10 Day Avg. Volume344,366
30 Day Avg. Volume449,729
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 Cap1.04
Enterprise Value/Revenue3.15
Enterprise Value/Gross Profit11.09
Enterprise Value/Ebitda16.04
Forecast
1Y Price Target
$143.75Price Target Upside25.83% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering4
EPS Forecast (FY)4.93
Revenue Forecast (FY)$2.63B
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:Apr 29, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The earnings call conveyed a strongly positive operational and financial performance with substantial revenue, profit, margin, and cash flow improvements driven by both organic execution and recent acquisitions. Management raised full-year guidance and increased SSG margin targets, reflecting confidence in sustained margin expansion and M&A-driven growth. Notable headwinds include a ~$20M decline in international export orders, a year-over-year backlog decline (~6%) driven in part by discontinued third‑party backlog, higher corporate and financing-related costs, and possible future input-cost pressure (steel, freight). Overall, the positive metrics, upgraded guidance, robust cash generation, and strategic margin initiatives materially outweigh the identified challenges.Positive Updates
Record Quarterly Net Sales
Consolidated net sales of $626 million in Q1, up $162 million or 35% year-over-year; organic sales growth of $70 million or 15%.
Negative Updates
International Export Order Weakness
International export orders declined by approximately $20 million year-over-year, impacting organic order trends and contributing to a portion of the YoY order and backlog movement.
Read all updates
Q1-2026 Updates
Positive
Negative
Record Quarterly Net Sales
Consolidated net sales of $626 million in Q1, up $162 million or 35% year-over-year; organic sales growth of $70 million or 15%.
Read all positive updates
Company Guidance
Management raised full‑year guidance, increasing adjusted EPS to $4.80–$5.50 (from $4.50–$4.80) and net sales to $2.57–$2.66 billion (from $2.55–$2.65B), while maintaining CapEx at $45–$55 million (about half targeted to growth initiatives), projecting a full‑year effective tax rate of ~25% (excl. discrete items), and continuing to target ~100% annual cash conversion (Q1 cash conversion was 144% with $101M operating cash flow); they expect quarterly EPS to be roughly evenly split, remain active on M&A, returned $0.15/share in Q1 (paid $9.2M) and announced a Q2 $0.15/share dividend, and enter the period with $480M net debt, $939M available on the credit facility, a $1.04B backlog (down ~6% YoY) and Q1 orders of $623M.Federal Signal Financial Statement Overview
Summary
Income Statement
86
Very Positive
Balance Sheet
74
Positive
Cash Flow
83
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 2.34B | 2.18B | 1.86B | 1.72B | 1.43B | 1.21B |
| Gross Profit | 665.70M | 612.80M | 533.00M | 450.20M | 344.90M | 288.70M |
| EBITDA | 460.10M | 419.10M | 341.70M | 283.10M | 215.90M | 172.50M |
| Net Income | 270.70M | 246.60M | 216.30M | 157.40M | 120.40M | 100.60M |
Balance Sheet | ||||||
| Total Assets | 2.45B | 2.39B | 1.77B | 1.62B | 1.52B | 1.37B |
| Cash, Cash Equivalents and Short-Term Investments | 71.40M | 63.70M | 91.10M | 61.00M | 47.50M | 40.50M |
| Total Debt | 582.80M | 594.60M | 252.40M | 320.70M | 388.40M | 313.70M |
| Total Liabilities | 1.02B | 1.01B | 579.10M | 618.60M | 663.40M | 582.10M |
| Stockholders Equity | 1.43B | 1.38B | 1.19B | 1.00B | 860.90M | 784.00M |
Cash Flow | ||||||
| Free Cash Flow | 290.60M | 227.10M | 190.70M | 164.10M | 18.80M | 64.40M |
| Operating Cash Flow | 319.30M | 254.70M | 231.30M | 194.40M | 71.80M | 101.80M |
| Investing Cash Flow | -491.80M | -527.90M | -78.90M | -83.70M | -99.70M | -168.70M |
| Financing Cash Flow | 185.90M | 244.50M | -121.00M | -97.90M | 35.50M | 26.40M |
Federal Signal Technical Analysis
Positive
114.24
Price Trends
113.36
Positive
113.62
Positive
115.77
Positive
Market Momentum
-0.31
Positive
52.76
Neutral
75.80
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 114.24 is below the 20-day moving average (MA) of 116.59, above the 50-day MA of 113.36, and below the 200-day MA of 115.77, indicating a neutral trend. The MACD of -0.31 indicates Positive momentum. The RSI at 52.76 is Neutral, neither overbought nor oversold. The STOCH value of 75.80 is Neutral, 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 42 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.15B | 31.92 | 13.40% | 0.80% | 10.03% | 28.13% | |
73 Outperform | $7.11B | 23.39 | 20.05% | 0.49% | 23.25% | 28.92% | |
73 Outperform | $3.22B | 173.67 | 5.54% | ― | 32.11% | -71.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $456.18M | ― | 10.89% | ― | -3.05% | 4.46% | |
54 Neutral | $4.10B | 23.93 | 58.84% | 0.39% | 9.99% | 15.89% | |
52 Neutral | $2.22B | -7.00 | -408.05% | ― | 590.00% | -15.72% |
* Industrials Sector Average
FSS
Federal Signal
116.35
22.82
24.39%
CECO
Ceco Environmental
86.95
58.72
208.01%
ERII
Energy Recovery
8.68
-3.70
-29.89%
ZWS
Zurn Water Solutions
48.80
12.87
35.83%
PCT
PureCycle Technologies
12.66
2.41
23.51%
ATMU
Atmus Filtration Technologies, Inc.
49.34
13.12
36.22%
Federal Signal Corporate Events
Business Operations and StrategyFinancial Disclosures
Federal Signal Showcases Growth Strategy in New Investor Presentation
Positive
May 20, 2026
On May 20, 2026, Federal Signal posted new investor presentation materials outlining its financial profile and strategic positioning, highlighting that net sales have grown at a roughly 13% compound annual rate between 2016 and 2025, with organic ...
Executive/Board ChangesShareholder Meetings
Federal Signal Shareholders Back Directors, Pay and Auditor
Positive
Apr 22, 2026
At its April 21, 2026 annual meeting, Federal Signal reported that holders of 57,977,820 shares, or 95.2% of outstanding common stock as of the February 23 record date, were represented in person or by proxy, establishing a quorum. Stockholders el...
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 ...
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.