Comfort Systems Usa Inc (NYSE: FIX)

Sector: Industrials Industry: Engineering & Construction CIK: 0001035983
Market Cap 49.32 Bn
P/B 165.24
P/E 2,267.37
P/S 36.14
ROIC (Qtr) 35.93
Div Yield % 0.06
Rev 1y % (Qtr) 35.24
Total Debt (Qtr) 394.05 Mn
Debt/Equity (Qtr) 0.18
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About

Comfort Systems USA, Inc., also known by its ticker symbol FIX, is a prominent player in the mechanical and electrical contracting services industry in the United States. The company operates through two segments: mechanical and electrical, with the former contributing significantly to its revenue. Comfort Systems USA's main business activities revolve around providing a comprehensive range of services in the mechanical and electrical contracting sector. These services are offered across various locations in the United States, making the company...

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Investment thesis

Bull case

  • Strong operating cash flow of 928.28M provides robust 2.36x coverage of total debt 394.05M, indicating excellent debt servicing capability and financial flexibility.
  • Healthy cash reserves of 860.52M provide 184.03x coverage of short-term debt 4.68M, demonstrating strong liquidity position and minimal refinancing risk.
  • Operating cash flow of 928.28M provides strong 45.81x coverage of stock compensation 20.26M, indicating sustainable incentive practices.
  • Operating cash flow of 928.28M provides exceptional 119.41x coverage of interest expenses 7.77M, showing strong debt service capability.
  • Strong tangible asset base of 4.42B provides 11.21x coverage of total debt 394.05M, indicating robust asset backing and low credit risk.

Bear case

  • Operating cash flow of 928.28M barely covers its investment activities of (275.49M), with a coverage ratio of -3.37, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 928.28M provides thin coverage of dividend payments of (60.12M) with a -15.44 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 860.52M provide limited coverage of acquisition spending of (128.59M), which is -6.69x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 928.28M provides insufficient coverage of deferred revenue obligations of 1.73B, which is 0.54x, raising concerns about future service delivery capabilities.
  • High receivables of 2.70B relative to inventory of 78.83M (34.26 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.

Segments Breakdown of Revenue (2024)

Customer Breakdown of Revenue (2024)

Peer comparison

Companies in the Engineering & Construction
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 PWR Quanta Services, Inc. 106.68 Bn 648.31 32.06 6.02 Bn
2 FER Ferrovial SE 55.08 Bn 200.50 6.30 -
3 FIX Comfort Systems Usa Inc 49.32 Bn 2,267.37 36.14 0.39 Bn
4 EME EMCOR Group, Inc. 37.37 Bn 40.34 2.63 0.42 Bn
5 MTZ Mastec Inc 20.82 Bn 62.89 1.51 2.77 Bn
6 APG APi Group Corp 18.43 Bn 118.16 2.41 3.05 Bn
7 J Jacobs Solutions Inc. 16.19 Bn 37.39 1.31 2.96 Bn
8 BLD TopBuild Corp 15.63 Bn 27.53 2.98 3.09 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 8.53 1.87
EV to Cash from Ops. EV/CFO 885.24 36.37
EV to Debt EV to Debt 125.07 14.13
EV to EBIT EV/EBIT 1,296.21 119.20
EV to EBITDA EV/EBITDA 846.11 40.20
EV to Free Cash Flow [EV/FCF] EV/FCF 1,286.17 95.14
EV to Market Cap EV to Market Cap 1.00 1.18
EV to Revenue EV/Rev 36.12 3.32
Price to Book Value [P/B] P/B 165.24 10.12
Price to Earnings [P/E] P/E 2,267.37 87.94
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 13.93 2.58
Dividend Payout Ratio % Div Payout % (Qtr) 7.20 28.61
Dividend per Basic Share Div per Share (Qtr) 1.70 0.25
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 7.47 8.70
Interest Coverage Int. cover (Qtr) 137.48 78.45
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -36.43 -168.16
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 107.06 652.12
Dividend Growth (1y) % Div 1y % (Qtr) 54.55 8.38
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 78.58 -61.29
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 61.64 15.12
EBIT Growth (1y) % EBIT 1y % (Qtr) 78.81 60.08
EBT Growth (1y) % EBT 1y % (Qtr) 79.15 12.78
EPS Growth (1y) % EPS 1y % (Qtr) 80.55 30.76
FCF Growth (1y) % FCF 1y % (Qtr) 11.58 -16.37
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 47.84 31.09
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.44 1.15
Cash Payout Ratio Cash Payout (Qtr) 0.06 0.05
Cash Ratio Cash Ratio (Qtr) 0.28 0.39
Current Ratio Curr Ratio (Qtr) 1.22 1.55
Debt to Equity Ratio Debt/Equity (Qtr) 0.18 0.90
Interest Cover Ratio Int Coverage (Qtr) 137.48 78.45
Times Interest Earned Times Interest Earned (Qtr) 137.48 78.45
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 14.50 0.42
EBIT Margin % EBIT Margin % (Qtr) 12.84 -3.70
EBT Margin % EBT Margin % (Qtr) 12.75 -6.01
Gross Margin % Gross Margin % (Qtr) 23.50 20.28
Net Profit Margin % Net Margin % (Qtr) 10.10 -7.25