Comfort Systems USA, Inc. (FIX) | Investment Case

1. Company Snapshot

1.a. Company Description

Comfort Systems USA, Inc.provides mechanical and electrical installation, renovation, maintenance, repair, and replacement services for the mechanical and electrical services industry in the United States.It engages in the design, engineering, integration, installation, and start-up of mechanical, electrical, and plumbing (MEP) systems; and renovation, expansion, maintenance, monitoring, repair, and replacement of existing buildings.

The company offers its services for heating, ventilation, and air conditioning (HVAC) systems, as well as plumbing, piping and controls, off-site construction, electrical, monitoring, and fire protection.It serves building owners and developers, general contractors, architects, consulting engineers, and property managers in the commercial, industrial, and institutional MEP markets.Comfort Systems USA, Inc.

was founded in 1917 and is headquartered in Houston, Texas.

Show Full description

1.b. Last Insights on FIX

Comfort Systems USA's recent performance is driven by robust fundamentals, including AI, data center buildouts, and strategic acquisitions. The company's Q3 earnings beat estimates, with adjusted earnings of $8.25 per share and revenues of $2.45 billion. Its growing technology exposure, record backlog, and strong data-center demand highlight long-term opportunities. Modular expansion and strong momentum across industrial and technology markets also contribute to growth. With a favorable federal and state funding environment, the company is well-positioned for future gains.

1.c. Company Highlights

Last Price	1001.48
Change Percentage	-0.32%
Open	1008.08
Previous Close	1004.65
Market Cap ( Millions)	35324
Volume	366271
Year High	1020.26
Year Low	276.44
M A 50	903.67
M A 200	612.39

FCF Yield	2.26%
Dividend Yield	0.19%
ROE	43.59%
Debt / Equity	18.97%
Net Debt / EBIDTA	-37.13%
Price To Book	15.83
Price Earnings Ratio	42.21
Price To FCF	44.22
Price To sales	4.24
EV / EBITDA	29.66

2. Comfort Systems USA's Q3 2025 Earnings: A Showcase of Exceptional Growth

Comfort Systems USA reported remarkable third-quarter results, with 33% same-store revenue growth, sharply higher margins, and EPS up by over 100% from the prior year, reaching $8.25 per share. Revenue for the quarter was $2.5 billion, a 35% increase compared to the same period last year. The company's EBITDA surpassed $400 million for the first time, marking a 74% increase over the same quarter last year. As Bill George noted, "We achieved more than $400 million in quarterly EBITDA for the first time ever, a 74% increase over the same quarter 1 year ago."

Publication Date: Oct -27

                                    📋 Highlights
                                    Revenue Surge:
                                                Q3 2025 revenue hit $2.5 billion, a 35% jump ($639 million) from the previous year.
Earnings Growth:
                                                EPS doubled to $8.25, reflecting a 100% year-over-year increase driven by margin expansion.
Record Backlog:
                                                Year-end backlog reached $9.4 billion, a 65% increase ($3.7 billion) since Q3 2024, with $3.5 billion from same-store growth.
EBITDA Milestone:
                                                Quarterly EBITDA surpassed $400 million for the first time, up 74% year-over-year.
Workforce Expansion:
                                                Added over 21,000 employees since 2021, with 70% being skilled craft workers, though growth now targets high single digits.

                                

Operational Highlights

The company's operational performance was equally impressive, with a record backlog of $9.4 billion, a significant increase from the previous year. Industrial customers accounted for 65% of total revenue in the first nine months of 2025, driving the pipeline and backlog growth. The company's modular segment saw strong demand, with a significant booking in the pharma sector, and the additional 3 million square footage of space becoming available in early 2026 is already sold out.

Valuation and Growth Prospects

With a P/E Ratio of 41.38 and an EV/EBITDA of 29.05, the market appears to be pricing in significant growth expectations. Analysts estimate revenue growth at 12.7% for next year. The company's return on equity (ROE) stands at 43.59%, and its return on invested capital (ROIC) is 31.98%, indicating strong profitability. The current Free Cash Flow Yield is 2.31%, suggesting a reasonable valuation. As the company continues to execute on its growth strategy, its ability to maintain high single-digit headcount growth and improve productivity will be crucial in sustaining its momentum.

Capital Allocation and Future Plans

The company remains committed to its capital allocation strategy, prioritizing acquisitions and share buybacks. As William George stated, "We will deploy most of our cash doing acquisitions. We will continually buy back our shares using a portion of our free cash flow." With a strong track record of execution and a robust pipeline, Comfort Systems USA is well-positioned to continue delivering value to its shareholders.

3. NewsRoom

Carvana, Comfort Systems To Join S&P 500 Index. The Stocks Are Breaking Out.

Dec -05

Source: investors.com

2 Air Conditioner & Heating Stocks Benefiting From the Data Center Boom

Dec -05

Source: zacks.com

Buy 5 Growth Stocks for December to Strengthen Your Portfolio

Dec -05

Source: zacks.com

Comfort Systems Climbs 29% in 3 Months: Should You Buy the Surge?

Dec -03

Source: zacks.com

Dow Jones Retail Giant Walmart, Three Others In Or Near Buy Zones

Dec -02

Source: investors.com

Could Comfort Systems' Acquisitions Fuel a Multi-Year Rally?

Dec -02

Source: zacks.com

Must-Buy Non-Tech Stocks for 2026 Amid AI-Driven Data Center Boom

Dec -02

Source: zacks.com

Voya MidCap Opportunities Strategy Q3 2025 Portfolio Review

Dec -01

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.38%)

6. Segments

Mechanical Services

Expected Growth: 8.5%

Comfort Systems USA, Inc.'s Mechanical Services segment growth of 8.5% is driven by increasing demand for HVAC and plumbing services in commercial and industrial markets, fueled by government incentives for energy-efficient upgrades, rising construction activities, and growing need for maintenance and repair services.

Electrical Services

Expected Growth: 8.0%

Comfort Systems USA, Inc.'s Electrical Services segment growth of 8.0% is driven by increasing demand for energy-efficient solutions, rising commercial and industrial construction activities, and growing need for electrical infrastructure upgrades. Additionally, the company's strategic acquisitions and expansion into new markets have contributed to the segment's growth.

7. Detailed Products

HVAC Systems

Design, installation, and maintenance of heating, ventilation, and air conditioning systems for commercial and industrial buildings.

Building Automation Systems

Design, installation, and integration of building automation systems to control and monitor various building systems, including HVAC, lighting, and security.

Electrical Systems

Design, installation, and maintenance of electrical systems, including power distribution, lighting, and control systems.

Plumbing Systems

Design, installation, and maintenance of plumbing systems, including water and gas piping, fixtures, and appliances.

Fire Protection Systems

Design, installation, and maintenance of fire suppression and alarm systems to protect people and property from fire hazards.

Energy Efficiency Solutions

Design and implementation of energy-efficient solutions, including energy audits, retro-commissioning, and energy management systems.

8. Comfort Systems USA, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Comfort Systems USA, Inc. is medium due to the availability of alternative HVAC solutions from competitors.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Comfort Systems USA, Inc.'s services, making it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers in the market, but Comfort Systems USA, Inc.'s large scale of operations gives it some negotiating power.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the HVAC industry, including the need for specialized equipment and trained technicians.

Intensity Of Rivalry

The intensity of rivalry is high due to the presence of several established players in the HVAC industry, leading to intense competition for market share.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	5.10%
Debt Cost	4.81%
Equity Weight	94.90%
Equity Cost	9.94%
WACC	9.68%
Leverage	5.37%

11. Quality Control: Comfort Systems USA, Inc. passed 8 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

EMCOR

A-Score: 5.5/10

Value: 2.8

Growth: 9.1

Quality: 7.1

Yield: 0.0

Momentum: 8.5

Volatility: 5.3

1-Year Total Return ->

Primoris Services

A-Score: 5.2/10

Value: 3.4

Growth: 8.6

Quality: 4.7

Yield: 0.0

Momentum: 10.0

Volatility: 4.7

1-Year Total Return ->

IES Holdings

A-Score: 5.2/10

Value: 2.2

Growth: 9.7

Quality: 7.1

Yield: 0.0

Momentum: 9.5

Volatility: 2.7

1-Year Total Return ->

Comfort Systems USA

A-Score: 5.2/10

Value: 1.2

Growth: 9.8

Quality: 7.2

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Sterling Infrastructure

A-Score: 5.1/10

Value: 1.5

Growth: 8.7

Quality: 7.3

Yield: 0.0

Momentum: 9.5

Volatility: 3.3

1-Year Total Return ->

Tetra Tech

A-Score: 4.3/10

Value: 3.0

Growth: 7.3

Quality: 5.5

Yield: 1.0

Momentum: 1.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

18.88%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

9.68%

Comfort Systems USA, Inc. - US1999081045

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on FIX

1.c. Company Highlights

Higher Growth

Expensive

Strong Momentum

Earnings Beats

Revenues Miss

Better Quality

Revenues Beats

Average Quality

Fairly Valued

2. Comfort Systems USA's Q3 2025 Earnings: A Showcase of Exceptional Growth

Operational Highlights

Valuation and Growth Prospects

Capital Allocation and Future Plans

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (8.38%)

6. Segments

Mechanical Services

Expected Growth: 8.5%

Electrical Services

Expected Growth: 8.0%

7. Detailed Products

HVAC Systems

Building Automation Systems

Electrical Systems

Plumbing Systems

Fire Protection Systems

Energy Efficiency Solutions

8. Comfort Systems USA, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Comfort Systems USA, Inc. passed 8 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

1001.48$

Current Price

1001.48$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA