Street Calls of the Week
Investing.com - DA Davidson has reiterated a Buy rating on Comfort Systems USA (NYSE:FIX) with a price target of $810.00 following the company’s third-quarter performance that exceeded expectations. The stock, currently trading near $825, has delivered an impressive 95.81% return year-to-date. According to InvestingPro analysis, which offers comprehensive valuation metrics and 17+ additional insights, the company appears to be trading above its Fair Value.
The mechanical and electrical building systems provider reported bookings of $3.7 billion for the quarter, with book-to-bill ratio reaching 1.5x compared to the analyst’s estimate of 1.0x. This marks the second consecutive quarter of strong bookings, following a 1.6x book-to-bill ratio in the second quarter. The company’s robust performance is reflected in its perfect Piotroski Score of 9, as reported by InvestingPro, indicating strong financial health across multiple metrics.
Comfort Systems’ backlog grew 65% year-over-year and 15% quarter-over-quarter, or 62% year-over-year and 13% quarter-over-quarter on an organic basis. Notable increases in bookings came from the company’s Indiana operations ($546 million) and Texas operations ($326 million), with the tech sector, particularly data centers, highlighted as a key contributor. This growth aligns with the company’s strong revenue performance, showing a 26.33% year-over-year increase. For deeper insights into Comfort Systems’ financial metrics and growth potential, consider accessing the detailed Pro Research Report available on InvestingPro.
The company’s modular business represented 18% of the total year-over-year same-store increase in backlog and 15% of the total year-over-year same-store increase in gross profit. This increased disclosure around modular contributions suggests growing relevance to overall financial performance.
DA Davidson noted that the strong bookings performance is particularly significant given that the third quarter typically sees higher revenue burn, with the average third-quarter book-to-bill ratio over the past five years being 1.1x.
In other recent news, Comfort Systems USA reported third-quarter earnings that more than doubled compared to the previous year, significantly exceeding analyst expectations. The company posted a net income of $291.6 million, or $8.25 per share, compared to $146.2 million, or $4.09 per share, from the same period last year. This result surpassed analyst estimates, which projected earnings of $6.25 per share. Revenue for the quarter increased by 35.2% to $2.45 billion, exceeding the consensus forecast of $2.13 billion. These financial results highlight a strong performance for Comfort Systems USA. Additionally, the company’s backlog reached a record high, further indicating robust business conditions. Analyst firms have not provided any recent upgrades or downgrades for the company. These developments reflect the company’s current financial health and operational success.
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