Limbach Holdings, Inc. (NASDAQ: LMB)

Sector: Industrials Industry: Building Products & Equipment CIK: 0001606163
Market Cap 1.04 Bn
P/B 5.74
P/E 28.49
P/S 1.73
ROIC (Qtr) 13.61
Div Yield % 0.00
Rev 1y % (Qtr) 37.83
Total Debt (Qtr) 82.75 Mn
Debt/Equity (Qtr) 0.46
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About

Limbach Holdings, Inc., a building systems solution firm, operates in the mechanical, electrical, and plumbing (MEP) industry and is publicly traded on the NASDAQ stock exchange under the symbol LMB. The company, headquartered in Warrendale, Pennsylvania, has a significant presence in the eastern United States with over 1,400 team members in 19 offices. Limbach Holdings' primary business activities include providing services through two primary segments: General Contractor Relationships (GCR) and Owner Direct Relationships (ODR). The GCR segment...

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Investment thesis

Bull case

  • Strong operating cash flow of 36.86M provides robust 0.45x coverage of total debt 82.75M, indicating excellent debt servicing capability and financial flexibility.
  • Strong tangible asset base of 287.88M provides 3.48x coverage of total debt 82.75M, indicating robust asset backing and low credit risk.
  • Operating cash flow of 36.86M provides exceptional 13.14x coverage of interest expenses 2.81M, showing strong debt service capability.
  • Robust free cash flow of 33.64M exceeds capital expenditure of 3.22M by 10.44x, indicating strong organic growth funding capability.
  • Tangible assets of 287.88M provide exceptional 7.72x coverage of deferred revenue 37.27M, showing strong service capability backing.

Bear case

  • Operating cash flow of 36.86M barely covers its investment activities of (92.75M), with a coverage ratio of -0.40, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Cash reserves of 9.88M provide limited coverage of acquisition spending of (89.53M), which is -0.11x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • Operating cash flow of 36.86M provides insufficient coverage of deferred revenue obligations of 37.27M, which is 0.99x, raising concerns about future service delivery capabilities.
  • Operating earnings of 47.59M show weak coverage of depreciation charges of 20.73M, with a 2.30 ratio indicating high capital intensity and potential reinvestment needs.
  • High depreciation of 20.73M relative to operating cash flow of 36.86M, which is 0.56x suggests significant maintenance capital requirements affecting free cash flow.

Segments Breakdown of Revenue (2024)

Segments Breakdown of Revenue (2024)

Peer comparison

Companies in the Building Products & Equipment
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 TT Trane Technologies plc 104.89 Bn 35.94 4.92 4.62 Bn
2 JCI Johnson Controls International plc 91.64 Bn 26.98 3.82 9.71 Bn
3 CARR CARRIER GLOBAL Corp 56.66 Bn 38.18 2.61 12.25 Bn
4 LII Lennox International Inc 19.91 Bn 24.71 3.83 1.77 Bn
5 CSL Carlisle Companies Inc 17.50 Bn 23.63 3.49 2.88 Bn
6 MAS Masco Corp /De/ 15.94 Bn 19.68 2.11 3.17 Bn
7 OC Owens Corning 13.83 Bn 13.90 1.63 5.61 Bn
8 WMS Advanced Drainage Systems, Inc. 13.26 Bn 28.18 4.44 1.45 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.59 2.00
EV to Cash from Ops. EV/CFO 28.71 13.48
EV to Debt EV to Debt 12.79 10.94
EV to EBIT EV/EBIT 22.24 24.16
EV to EBITDA EV/EBITDA 15.50 -11.14
EV to Free Cash Flow [EV/FCF] EV/FCF 31.46 46.78
EV to Market Cap EV to Market Cap 1.01 1.12
EV to Revenue EV/Rev 1.75 2.81
Price to Book Value [P/B] P/B 5.74 4.24
Price to Earnings [P/E] P/E 28.49 47.40
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 0.00 0.80
Dividend Payout Ratio % Div Payout % (Qtr) 0.00 11.22
Dividend per Basic Share Div per Share (Qtr) 0.00 0.71
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 0.00 10.90
Interest Coverage Int. cover (Qtr) 16.96 111.58
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) 41.37 -24.93
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -80.71 61.26
Dividend Growth (1y) % Dividend Growth (1y) % 0.00 1.67
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 40.48 -186.82
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 37.44 -57.93
EBIT Growth (1y) % EBIT 1y % (Qtr) 34.09 -102.26
EBT Growth (1y) % EBT 1y % (Qtr) 32.95 -299.15
EPS Growth (1y) % EPS 1y % (Qtr) 36.17 -598.34
FCF Growth (1y) % FCF 1y % (Qtr) 29.86 89.70
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 22.97 -3.62
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.48 0.88
Cash Payout Ratio Cash Payout (Qtr) 0.00 0.13
Cash Ratio Cash Ratio (Qtr) 0.07 1.57
Current Ratio Curr Ratio (Qtr) 1.43 3.42
Debt to Equity Ratio Debt/Equity (Qtr) 0.46 0.79
Interest Cover Ratio Int Coverage (Qtr) 16.96 111.58
Times Interest Earned Times Interest Earned (Qtr) 16.96 111.58
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 11.30 3.54
EBIT Margin % EBIT Margin % (Qtr) 7.88 1.23
EBT Margin % EBT Margin % (Qtr) 7.42 -1.76
Gross Margin % Gross Margin % (Qtr) 27.30 28.65
Net Profit Margin % Net Margin % (Qtr) 6.10 -3.80