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Investing.com - BMO Capital raised its price target on FirstService (TSX:CIGI) Corp (NASDAQ:FSV) to $225.00 from $217.00 on Thursday, while maintaining an Outperform rating on the stock. The stock currently trades at $200.08, having surged over 12% in the past week and approaching its 52-week high of $200.41. According to InvestingPro data, the company has demonstrated strong momentum with a 14.6% return over the past year.
The price target increase follows FirstService’s Q2 2025 earnings beat, with adjusted EBITDA exceeding forecasts in both FirstService Residential (FSR) and FirstService Brands (FSB) segments. The company reiterated its 2025 outlook, which projects high-single-digit revenue growth and higher year-over-year margins. InvestingPro analysis shows the company maintains robust financial health with a "GREAT" overall score and impressive gross profit margins of 33.2%.
BMO Capital noted that solid margins in both business segments likely drove Thursday’s 10% increase in FirstService’s stock price. The firm highlighted that these strong margins came despite some macroeconomic headwinds.
According to BMO Capital, indirect tariff-related impacts weighed on the company’s Roofing and Home Services businesses, though these challenges were offset by growth in Restoration and Century Fire operations. The firm emphasized that underlying business drivers remain intact.
BMO Capital continues to view FirstService’s long-term compounding potential as attractive and believes this justifies the stock’s premium valuation in the market. While trading at a P/E ratio of 62.4x, InvestingPro analysis indicates the stock is currently trading above its Fair Value. Subscribers can access 15+ additional ProTips and comprehensive valuation metrics in the Pro Research Report, available exclusively on InvestingPro.
In other recent news, FirstService Corporation reported second-quarter earnings that exceeded analyst expectations. The company achieved an adjusted earnings per share (EPS) of $1.71, surpassing estimates by $0.26. Revenue for the quarter reached $1.42 billion, exceeding the anticipated $1.39 billion. FirstService experienced a 26% surge in earnings, driven by strong margin expansion. The adjusted EBITDA rose by 19% to $157.1 million, while revenue saw a 9% year-over-year increase. These results were attributed to operational improvements across its business segments. Investors and analysts are closely watching these developments as they reflect the company’s robust financial performance.
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