Trump announces 100% chip tariff as Apple ups U.S. investment
On Wednesday, H.C. Wainwright reaffirmed a Buy rating on shares of CECO Environmental Corp (NASDAQ: CECO), with a consistent price target of $35.00. The firm's analyst highlighted the company's third-quarter financial performance, which revealed revenues of $135.5 million.
This figure represents a 9.3% year-over-year decline and falls short of the anticipated $159.8 million, attributed to delays in certain projects and customer programs.
CECO Environmental saw a mixed performance in its gross margin, reporting 33.4% for the quarter. This is an improvement from 28.9% in the same quarter of the previous year but a decrease from 35.7% in the second quarter of 2024. The company's GAAP operating profit for the quarter was $7.2 million, slightly down from $7.9 million in the prior-year period.
The GAAP net profit for CECO Environmental stood at $2.1 million, or $0.06 per share, for the third quarter of 2024. These results did not meet the projected $5.5 million, or $0.15 per share, and also showed a decrease from the $3.3 million, or $0.09 per share, reported in the third quarter of 2023.
As of September 30, 2024, the company's financial position included $38.9 million in cash, which encompasses $0.2 million of restricted cash, and a total debt of $134.1 million, including income tax liabilities. The analyst reiterated the Buy rating and the $35 price target, despite the mixed quarterly results.
In other recent news, CECO Environmental Corp. has acquired burner tech firm Profire Energy (NASDAQ:PFIE) in a $125 million all-cash transaction, enhancing its position in niche energy and industrial markets. This acquisition is anticipated to provide cost synergies and strategic growth opportunities by utilizing CECO's established international operations and customer relationships.
The company has also expanded its credit facility to $400 million, bolstering its financial base for potential growth initiatives and extending its global market reach.
CECO's recent financial performance showed a 6% year-over-year increase in revenue, along with a near-record gross margin. The company's EBITDA and earnings per share demonstrated substantial growth, increasing by 17% and 38% respectively.
CECO Environmental's backlog currently stands at $390.9 million, indicating a promising business trajectory. The company has updated its 2024 guidance, expecting sales between $600 million and $620 million, and adjusted EBITDA ranging from $68 million to $72 million. These recent developments underscore the company's commitment to financial growth and robust performance.
InvestingPro Insights
Despite the recent challenges highlighted in CECO Environmental's Q3 results, InvestingPro data reveals some interesting insights. The company's market cap stands at $789.13 million, with a revenue of $553.08 million for the last twelve months as of Q3 2024. While the quarterly revenue growth showed a decline of 9.29%, aligning with the reported Q3 results, the company has maintained profitability over the last twelve months.
InvestingPro Tips suggest that CECO's net income is expected to grow this year, which could be a positive sign for investors looking beyond the recent quarterly performance. Additionally, analysts predict the company will be profitable this year, potentially indicating a recovery from the recent setbacks.
It's worth noting that CECO's stock has taken a significant hit recently, with a 15% decline over the last week and a 20% drop over the last month. This aligns with the RSI suggesting the stock is in oversold territory, which could present an opportunity for investors who believe in the company's long-term prospects.
For those seeking a more comprehensive analysis, InvestingPro offers 11 additional tips for CECO Environmental, providing a deeper understanding of the company's financial health and market position.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.