Stifel maintains Buy on Limbach Holdings, target at $103

On Tuesday, Stifel analysts maintained a positive stance on Limbach Holdings (NASDAQ:LMB), reiterating their Buy rating and a price target of $103.00. The stock has shown remarkable momentum, currently trading at $113.77 and delivering an impressive 122.36% return over the past year. According to InvestingPro analysis, the company maintains a "GREAT" financial health score, though current valuations suggest the stock may be trading above its Fair Value. The company’s first-quarter 2025 performance surpassed market expectations, with revenues hitting $133 million, compared to the consensus estimate of $121 million. This surge was led by robust outcomes in both of its business segments, particularly in ODR (Owner Direct Revenue), which saw a year-over-year increase of 22%. Despite a 5% decline in GCR (General Contractor Revenue), the results reflected ongoing progress in Limbach’s strategic transformation, with ODR accounting for approximately 68% of the first-quarter revenue. The company’s strong execution is reflected in its healthy gross profit margin of 27.81% and solid liquidity position with a current ratio of 1.46.

Limbach Holdings also displayed strong momentum in March, which contributed to their financial success. The adjusted EBITDA for the quarter stood at $15 million, outperforming the consensus projection of $10 million. This was largely attributed to higher than expected gross profitability. The adjusted EBITDA margin of 11.2% marked a significant improvement of 270 basis points from the previous year and well above the anticipated 8.5%.

The company’s total backlog increased by 15% on a year-over-year basis, driven by a 57% increase in ODR, although GCR experienced a 26% decline. The implied awards, which indicate the value of new business secured, were up 28% from the previous year. Notably, ODR awards rose by 33%, and GCR saw a 10% increase. For deeper insights into Limbach’s growth trajectory and comprehensive financial analysis, investors can access the detailed Pro Research Report available on InvestingPro, which covers over 1,400 US stocks with expert analysis and actionable intelligence.

Limbach Holdings also updated its forecast for free cash flow (FCF) conversion for the year. The company now expects approximately 75% of its adjusted EBITDA to convert to FCF, marking an improvement from the previously estimated 70%. This revision underscores the company’s efficiency in generating cash from its operations. The initial guidance for 2025 was otherwise reaffirmed, indicating confidence in the company’s strategic direction and operational execution. With an EBITDA of $54.28 million in the last twelve months and trading at an EV/EBITDA multiple of 22.31x, investors seeking detailed valuation metrics and additional insights can explore 16 more exclusive ProTips on InvestingPro.

In other recent news, Limbach Holdings Inc reported a strong financial performance for the first quarter of 2025, surpassing earnings and revenue expectations. The company achieved an earnings per share (EPS) of $1.12, significantly exceeding the forecasted $0.43. Revenue also surpassed projections, reaching $133.1 million against the anticipated $120.48 million. Limbach Holdings has set a revenue guidance for the full year between $610 million and $630 million, with adjusted EBITDA expected to range from $78 million to $82 million.

Additionally, the company is expanding its climate control rental equipment fleet and sales team, indicating a strategic focus on growth. Analysts from Lake Street Capital and CJS Securities highlighted the company’s expansion strategy and its implications for future growth. The firm is also exploring strategic mergers and acquisitions to strengthen its market position. These developments reflect Limbach Holdings’ ongoing efforts to enhance its operational revenue and adapt to market dynamics.

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