Comfort Systems USA, Inc. (FIX) Soars to 52-Week High, Time to Cash Out?
Have you been paying attention to shares of Comfort Systems (FIX)? Shares have been on the move with the stock up 8.5% over the past month. The stock hit a new 52-week high of $183.04 in the previous session. Comfort Systems has gained 55.9% since the start of the year compared to the 28.6% move for the Zacks Construction sector and the 45.3% return for the Zacks Building Products - Air Conditioner and Heating industry.
What's Driving the Outperformance?
The stock has an impressive record of positive earnings surprises, as it hasn't missed our earnings consensus estimate in any of the last four quarters. In its last earnings report on July 26, 2023, Comfort Systems reported EPS of $1.93 versus consensus estimate of $1.64.
For the current fiscal year, Comfort Systems is expected to post earnings of $7.62 per share on $5.01 billion in revenues. This represents a 44.05% change in EPS on a 21.08% change in revenues. For the next fiscal year, the company is expected to earn $8.78 per share on $5.34 billion in revenues. This represents a year-over-year change of 15.29% and 6.44%, respectively.
Valuation Metrics
Comfort Systems may be at a 52-week high right now, but what might the future hold for the stock? A key aspect of this question is taking a look at valuation metrics in order to determine if the company has run ahead of itself.
On this front, we can look at the Zacks Style Scores, as they provide investors with an additional way to sort through stocks (beyond looking at the Zacks Rank of a security). These styles are represented by grades running from A to F in the categories of Value, Growth, and Momentum, while there is a combined VGM Score as well. Investors should consider the style scores a valuable tool that can help you to pick the most appropriate Zacks Rank stocks based on their individual investment style.
Comfort Systems has a Value Score of B. The stock's Growth and Momentum Scores are B and D, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 23.6X current fiscal year EPS estimates, which is not in-line with the peer industry average of 24.4X. On a trailing cash flow basis, the stock currently trades at 23.5X versus its peer group's average of 22.8X. This isn't enough to put the company in the top echelon of all stocks we cover from a value perspective.
Zacks Rank
We also need to look at the Zacks Rank for the stock, as this supersedes any trend on the style score front. Fortunately, Comfort Systems currently has a Zacks Rank of #1 (Strong Buy) thanks to rising earnings estimates.
Since we recommend that investors select stocks carrying Zacks Rank of 1 (Strong Buy) or 2 (Buy) and Style Scores of A or B, it looks as if Comfort Systems fits the bill. Thus, it seems as though Comfort Systems shares could have a bit more room to run in the near term.
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Comfort Systems USA, Inc. (FIX) : Free Stock Analysis Report
