Comfort Systems USA (FIX, Financial) has exceeded market expectations with its recent financial report for the first quarter of 2025. The company reported a total revenue of $1.83 billion, surpassing analysts' consensus estimate of $1.77 billion, illustrating strong performance by its teams across the nation.
Significantly, the company's earnings per share reached $4.75, marking a remarkable increase of over 75% compared to the first quarter of 2024. This impressive earnings growth is noteworthy, especially considering that the first quarter is typically the company's weakest due to seasonal factors.
Furthermore, Comfort Systems USA managed to normalize its working capital during the quarter through significant payments made to a key customer, aligning with long-term financial strategies. This strategic move is expected to enhance the company's financial position as it progresses through the year.
The results highlight a promising start to 2025 for Comfort Systems USA, setting a robust foundation for future quarters.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 6 analysts, the average target price for Comfort Systems USA Inc (FIX, Financial) is $493.00 with a high estimate of $552.00 and a low estimate of $440.00. The average target implies an upside of 31.04% from the current price of $376.21. More detailed estimate data can be found on the Comfort Systems USA Inc (FIX) Forecast page.
Based on the consensus recommendation from 7 brokerage firms, Comfort Systems USA Inc's (FIX, Financial) average brokerage recommendation is currently 1.6, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Comfort Systems USA Inc (FIX, Financial) in one year is $295.73, suggesting a downside of 21.39% from the current price of $376.21. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Comfort Systems USA Inc (FIX) Summary page.
FIX Key Business Developments
Release Date: February 21, 2025
- Revenue: Fourth quarter revenue increased by 38% to $1.9 billion; full year revenue was $7 billion, up 35% from 2023.
- Same-Store Revenue Growth: Fourth quarter same-store revenue growth was 22%; full year same-store revenue increased by 23%.
- Gross Profit: Fourth quarter gross profit was $434 million, with a gross profit margin of 23.2%.
- Net Income: Fourth quarter net income was $146 million, or $4.09 per share, a 60% increase from last year.
- EBITDA: Fourth quarter EBITDA increased by 85% to $261 million; full year EBITDA was $892 million with a margin of 12.7%.
- Operating Cash Flow: Full year operating cash flow was $849 million.
- Free Cash Flow: Full year free cash flow was $744 million.
- Backlog: End-of-year backlog reached $6 billion, a 16% increase from last year.
- SG&A Expense: Fourth quarter SG&A was $208 million, or 11.1% of revenue.
- Dividend: Quarterly dividend increased by $0.05 to $0.40 per share.
- Share Repurchases: $58 million returned to shareholders in 2024 through share repurchases.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Comfort Systems USA Inc (FIX, Financial) reported record annual and fourth quarter earnings with exceptional cash flow.
- Same-store revenue growth for the fourth quarter was 22%, with earnings per share up 60% from last year.
- Backlog reached a new all-time high of $6 billion, indicating strong demand across various sectors.
- The company announced a quarterly dividend increase, reflecting strong cash flow and commitment to shareholder returns.
- Recent acquisitions have surpassed expectations, contributing positively to revenue and growth.
Negative Points
- Facing tough comparables in 2025, with expectations of high single-digit percentage growth in same-store revenue.
- First quarter cash flow will be reduced due to a deferred $80 million tax payment related to Hurricane Barrel.
- Increased SG&A expenses due to ongoing investments to support higher activity levels.
- Potential challenges in maintaining the elevated margin levels achieved in 2024.
- The company is turning down work due to capacity constraints, indicating potential limitations in workforce availability.
