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Ceco Environmental (CECO)
NASDAQ:CECO
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Ceco Environmental
(NASDAQ:CECO)
77Outperform
Positive Factors
Backlog Growth
Backlog grew to $602M at the end of 1Q25 compared to $541M at the end of 4Q24, indicating strong future demand.
Financial Performance
Stronger than expected 1Q25 results have driven the upgrade to a Buy rating.
Future Business Prospects
The company's 2025 outlook and future business prospects give confidence that the company's financial results should remain solid given the company's participation in various infrastructure-driven end-markets.
Negative Factors
Revenue Execution
The stock recently saw a pullback driven by lower-than-guided revenue execution for 2024.
Risk Factors
Risks include execution risk, regulatory risk, dependency on subcontractors, merger integration risk, dilution risk, and uncertainty due to global macroeconomic and geopolitical environment.
Ceco Environmental (CECO) vs. S&P 500 (SPY)
Market Cap
$914.15M
Dividend YieldN/A
Average Volume (3M)365.14K
Price to Earnings (P/E)20.0
Beta (1Y)1.40
Revenue Growth8.89%
EPS Growth278.44%
CountryUS
Employees1,600
SectorIndustrials
Sector Strength79
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)1.29
Shares Outstanding35,267,940
10 Day Avg. Volume390,872
30 Day Avg. Volume365,145
Financial Highlights & Ratios
PEG Ratio0.07
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.15
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit5.37
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$33.67Price Target Upside29.90% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering6
Ceco Environmental Business Overview & Revenue Model
Company DescriptionCECO Environmental Corp. provides industrial air quality and fluid handling systems worldwide. It operates in two segments: Engineered Systems Segment and Industrial Process Solutions Segment. The company engineers, designs, builds, and installs systems that capture, clean, and destroy air- and water-borne emissions from industrial facilities as well as fluid handling, gas separation, and filtration systems. It offers dampers and diverters, selective catalytic reduction and selective non-catalytic reduction systems, cyclonic technology, thermal oxidizers, filtration systems, scrubbers, and water and fluid handling equipment, as well as plant engineering services and engineered design build fabrication. The company markets its products and services to natural gas processors, transmission and distribution companies, refineries, power generators, industrial manufacturing, engineering and construction companies, semiconductor manufacturers, compressor manufacturers, beverage can manufacturers, metals and minerals, and electric vehicle producer companies. CECO Environmental Corp. was incorporated in 1966 and is headquartered in Dallas, Texas.
How the Company Makes MoneyCECO Environmental makes money through the sale of its diverse range of products and services designed to improve air quality and manage industrial emissions. The company's revenue streams primarily include the sale of air pollution control systems, such as scrubbers and baghouses, as well as fluid handling equipment like pumps and valves. CECO also generates income from providing engineering services, installation, and maintenance of their systems. Significant factors contributing to its earnings include regulatory requirements for emissions reduction across various industries and its ability to deliver customized solutions that meet specific industrial needs. Partnerships with industrial clients and government agencies further bolster its revenue generation capabilities.
Ceco Environmental Financial Statement Overview
Summary
Ceco Environmental demonstrates solid financial health with strong revenue and profit growth, a stable balance sheet with low leverage, and positive free cash flow. While profitability and cash flow metrics suggest opportunities for enhancement, the company is well-positioned for future growth in the industrial pollution and treatment controls sector.Income Statement
Ceco Environmental has shown strong revenue growth with a TTM revenue of $608.3M, up from $557.9M in the prior year. Gross profit margin improved to 34.7%, and the net profit margin increased to 7.8%, indicating enhanced profitability. The EBIT margin also improved significantly to 14.9%, reflecting better operational efficiency.85
Very Positive
Balance Sheet
The company's balance sheet is robust with a debt-to-equity ratio of 0.08, indicating low leverage. The equity ratio stands at 29.9%, showing a stable equity base. However, the return on equity is moderate at 16.6%, suggesting room for improvement in asset utilization.78
Positive
Cash Flow
Ceco Environmental's cash flow position is stable with a positive free cash flow of $15.0M. The operating cash flow to net income ratio is 0.25, which is relatively low, suggesting opportunities for improving cash generation relative to earnings.72
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 557.93M | 544.85M | 422.63M | 324.14M | 316.01M | Gross Profit |
| 196.15M | 171.02M | 128.22M | 100.92M | 105.13M | EBIT |
| 35.40M | 34.57M | 34.89M | 9.86M | 21.44M | EBITDA |
| 45.23M | 47.45M | 38.33M | 21.89M | 30.52M | Net Income Common Stockholders |
| 12.96M | 12.91M | 17.42M | 1.98M | 8.21M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 37.83M | 54.78M | 45.52M | 29.90M | 35.99M | Total Assets |
| 759.70M | 600.29M | 504.72M | 416.20M | 419.31M | Total Debt |
| 245.07M | 155.48M | 119.66M | 72.54M | 81.93M | Net Debt |
| 207.24M | 100.70M | 74.14M | 42.64M | 45.93M | Total Liabilities |
| 507.81M | 362.80M | 286.57M | 210.24M | 215.70M | Stockholders Equity |
| 247.69M | 232.64M | 213.22M | 204.55M | 202.66M |
| Cash Flow | Free Cash Flow | |||
| 7.46M | 36.26M | 26.27M | 10.68M | 476.00K | Operating Cash Flow |
| 24.83M | 44.65M | 29.65M | 13.30M | 4.42M | Investing Cash Flow |
| -105.31M | -56.49M | -48.26M | -2.08M | -9.23M | Financing Cash Flow |
| 65.91M | 21.14M | 38.18M | -15.56M | 3.72M |
Ceco Environmental Technical Analysis
Positive
25.92
Price Trends
22.41
Positive
26.01
Negative
26.90
Negative
Market Momentum
0.28
Negative
68.65
Neutral
96.17
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CECO, the sentiment is Positive. The current price of 25.92 is above the 20-day moving average (MA) of 20.49, above the 50-day MA of 22.41, and below the 200-day MA of 26.90, indicating a neutral trend. The MACD of 0.28 indicates Negative momentum. The RSI at 68.65 is Neutral, neither overbought nor oversold. The STOCH value of 96.17 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CECO.
Ceco Environmental Risk Analysis
Ceco Environmental disclosed 41 risk factors in its most recent earnings report. Ceco Environmental reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ceco Environmental Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
77 Outperform | $914.15M | 20.02 | 18.34% | ― | 8.89% | 278.44% | |
72 Outperform | $865.15M | 39.53 | 10.73% | ― | 12.93% | 7.08% | |
64 Neutral | $4.28B | 11.80 | 5.33% | 250.46% | 4.10% | -9.26% | |
50 Neutral | $29.23M | ― | -4.54% | ― | -7.19% | -24.85% | |
45 Neutral | $30.94M | ― | -55.91% | ― | 49.65% | 16.68% | |
38 Underperform | $16.39M | ― | -71.87% | ― | 5.23% | -30.55% | |
37 Underperform | $14.22M | ― | -60.98% | ― | -18.87% | -9.47% |
* Industrials Sector Average
Performance Comparison
CECO
Ceco Environmental
25.92
2.85
12.35%
ERII
Energy Recovery
15.80
2.37
17.65%
FTEK
Fuel Tech
0.95
-0.32
-25.20%
CLIR
ClearSign Combustion
0.59
-0.23
-28.05%
LIQT
LiqTech International
1.48
-1.21
-44.98%
TOMZ
TOMI Environmental Solutions
0.79
0.16
25.40%
Ceco Environmental Earnings Call Summary
Earnings Call Date:Apr 29, 2025
(Q1-2025)
| % Change Since: 35.00%|
Next Earnings Date:Aug 12, 2025
Earnings Call Sentiment Positive
CECO Environmental reported strong financial performance with record bookings and backlog growth, supported by a robust sales pipeline. However, challenges such as tariff-related costs and lower-than-expected EBITDA margins due to increased expenses were also highlighted.Q1-2025 Updates
Positive Updates
Record Bookings Achieved
CECO Environmental reported record Q1 bookings of approximately $228 million, marking a 57% increase year-over-year without a large order in power generation or produced water treatment markets.
Strong Backlog Growth
The company exited the quarter with a backlog of $602 million, up 55% year-over-year, and approximately $60 million higher sequentially, driven by another record quarter of new orders.
Increased Sales Pipeline
CECO's sales pipeline has grown from $4.5 billion to over $5 billion for the first time, including almost a dozen opportunities each greater than $50 million in value.
Revenue Growth
Q1 revenue reached $177 million, up 40% year-over-year, with 28% driven by recent acquisitions.
Positive Adjusted EPS
Adjusted EPS for the quarter was $0.10, which was above consensus.
Successful Acquisition Integration
The acquisition of Profire Energy is off to a strong start, producing high levels of bookings and revenues, and delivering on identified synergies.
Negative Updates
Tariff Challenges
Concerns about potential impacts of tariffs on supply chain costs and overall economy were discussed. Estimated gross tariff exposure is between $3 to $10 million.
Adjusted EBITDA Margins
Adjusted EBITDA margins in the quarter were approximately 8%, which fell short of expectations due to higher selling, engineering, and project execution expenses.
Increased Interest Expense
Higher interest expenses were noted, which impacted adjusted EPS.
Company Guidance
During CECO Environmental's first-quarter 2025 earnings call, the company reported record bookings of approximately $228 million, a 57% increase year-over-year, and highlighted a robust sales pipeline now exceeding $5 billion. The company's backlog reached $602 million, up 55% from the previous year. CECO maintained its full-year 2025 guidance, forecasting revenues between $700 million and $750 million, with adjusted EBITDA projected at $90 million to $100 million. Adjusted EPS was $0.10, above consensus, while adjusted EBITDA for the quarter was $14 million, slightly exceeding expectations. Despite uncertainties related to tariffs and supply chain costs, CECO has initiated price and productivity measures to mitigate potential impacts while benefiting from a geographically aligned supply chain.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.