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FirstService Corporation (TSE:FSV)
TSX:FSV
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FirstService
(TSX:FSV)
75Outperform
Positive Factors
Financial Performance
FirstService reported solid first-quarter results, delivering a strong profit beat.
Market Position
Analyst sees potential in FirstService Corporation due to its strong market position and ability to capitalize on growth opportunities.
Strategic Initiatives
FirstService Corporation's strategic initiatives are anticipated to enhance its competitive edge in the market.
Negative Factors
Economic Uncertainty
Economic uncertainties could impact the financial stability of FirstService Corporation.
Macro Environment
Tariff-related macro uncertainties weighed on organic growth in Roofing and Home Services.
Real Estate Sector
Challenges in the real estate sector may pose risks to FirstService Corporation's performance.
FirstService (FSV) vs. S&P 500 (SPY)
Market Cap
$11.04B
Dividend Yield0.59%
Average Volume (3M)95.12K
Price to Earnings (P/E)61.2
Beta (1Y)0.83
Revenue Growth22.37%
EPS Growth46.30%
CountryCA
Employees30,000
SectorReal Estate
Sector Strength80
IndustryReal Estate - Services
Share Statistics
EPS (TTM)3.97
Shares Outstanding45,443,500
10 Day Avg. Volume69,824
30 Day Avg. Volume95,122
Financial Highlights & Ratios
PEG Ratio1.32
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 Cap1.22
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit7.86
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$295.78Price Target Upside21.76% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
FirstService Business Overview & Revenue Model
Company DescriptionFirstService Corporation (FSV) is a leading North American provider of essential property services. The company operates through two main segments: FirstService Residential and FirstService Brands. FirstService Residential offers property management services to residential communities, including condominiums, cooperatives, homeowner associations, and large-scale master-planned communities. FirstService Brands comprises franchised and company-owned operations in essential property services such as painting, restoration, and cleaning, delivering a wide range of services to both residential and commercial customers.
How the Company Makes MoneyFirstService makes money primarily through its two business segments: FirstService Residential and FirstService Brands. FirstService Residential generates revenue by providing property management services, including maintenance, administrative support, and financial management, usually through contracts with homeowners associations and similar entities. This segment benefits from long-term relationships and recurring revenue streams. FirstService Brands earns revenue through franchising and direct operations in property services, where franchisees pay initial franchise fees as well as ongoing royalties based on their sales. The company also benefits from its investment in technology and customer service, enhancing client satisfaction and loyalty, which in turn supports sustained revenue growth. Key partnerships and a strong brand presence in North American markets further bolster its earnings potential.
FirstService Financial Statement Overview
Summary
FirstService demonstrates robust financial health with strong revenue and cash flow growth, stable margins, and effective equity utilization. The company shows consistent financial performance with opportunities to enhance net profit margins further.Income Statement
FirstService demonstrates robust revenue growth with a 20.3% increase from 2022 to 2023, and further from 2023 to 2024 by 20.3%. The gross profit margin for TTM stands at 33.1%, indicating efficient cost management. However, the net profit margin of 2.5% suggests room for improvement in profitability. The EBIT margin is stable at 6.4%, supported by a consistent EBITDA margin of 9.7%.85
Very Positive
Balance Sheet
The company maintains a balanced equity ratio of 28.5% TTM, reflecting a solid equity base. The debt-to-equity ratio is 1.32, indicating moderate leverage, which is typical for the industry. The return on equity (ROE) for TTM is 10.9%, showcasing effective utilization of equity to generate profits.78
Positive
Cash Flow
FirstService shows a strong operating cash flow to net income ratio of 2.57 in TTM, highlighting efficient cash generation relative to net income. The free cash flow growth rate from 2024 to TTM is 26.3%, indicating robust cash management. The free cash flow to net income ratio is 1.67, suggesting healthy cash availability after capital expenditures.82
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 5.22B | 4.33B | 3.75B | 3.25B | 2.77B | Gross Profit |
| 1.72B | 1.39B | 1.18B | 1.05B | 900.62M | EBIT |
| 337.51M | 244.89M | 219.03M | 201.64M | 169.41M | EBITDA |
| 506.02M | 378.64M | 333.69M | 312.63M | 272.09M | Net Income Common Stockholders |
| 134.38M | 100.39M | 121.07M | 135.21M | 87.26M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 227.60M | 187.62M | 136.22M | 165.66M | 184.29M | Total Assets |
| 4.19B | 3.63B | 2.77B | 2.51B | 2.20B | Total Debt |
| 1.57B | 1.42B | 952.16M | 823.19M | 753.71M | Net Debt |
| 1.34B | 1.23B | 815.95M | 657.52M | 569.42M | Total Liabilities |
| 2.56B | 2.27B | 1.63B | 1.49B | 1.34B | Stockholders Equity |
| 1.19B | 1.02B | 907.47M | 799.72M | 660.40M |
| Cash Flow | Free Cash Flow | |||
| 172.88M | 187.63M | 28.28M | 109.06M | 252.35M | Operating Cash Flow |
| 285.67M | 280.36M | 105.89M | 167.27M | 291.76M | Investing Cash Flow |
| -323.70M | -646.33M | -160.80M | -206.32M | -142.26M | Financing Cash Flow |
| 74.41M | 413.94M | 18.78M | 24.43M | -75.20M |
FirstService Technical Analysis
Positive
242.92
Price Trends
241.23
Positive
250.45
Negative
249.11
Negative
Market Momentum
-0.02
Negative
55.96
Neutral
67.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:FSV, the sentiment is Positive. The current price of 242.92 is above the 20-day moving average (MA) of 235.89, above the 50-day MA of 241.23, and below the 200-day MA of 249.11, indicating a neutral trend. The MACD of -0.02 indicates Negative momentum. The RSI at 55.96 is Neutral, neither overbought nor oversold. The STOCH value of 67.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for TSE:FSV.
FirstService Peers Comparison
Overall Rating
UnderperformOutperform
Sector (60)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
76 Outperform | C$1.82B | 9.69 | 12.66% | 0.07% | 18.02% | 15.10% | |
75 Outperform | $11.04B | 61.23 | 12.15% | 0.59% | 22.37% | 46.30% | |
68 Neutral | $8.51B | 38.09 | 14.89% | 0.26% | 13.08% | 146.40% | |
65 Neutral | C$2.38B | 176.09 | 3.63% | 1.17% | -13.29% | 29.94% | |
60 Neutral | $2.78B | 11.39 | 0.16% | 8531.54% | 5.92% | -14.67% | |
60 Neutral | C$1.41B | ― | -23.06% | 0.30% | 5.77% | -388.17% | |
48 Neutral | C$135.71M | ― | 4.67% | 9.30% | 622.68% | -395.54% |
* Real Estate Sector Average
Performance Comparison
TSE:FSV
FirstService
242.92
38.16
18.64%
TSE:BRE
Bridgemarq Real Estate Services
14.31
1.93
15.58%
TSE:CIGI
Colliers International Group
168.18
16.08
10.57%
TSE:MEQ
Mainstreet Equity
195.00
14.50
8.03%
TSE:SVI
Storagevault Canada
3.87
-0.92
-19.21%
TSE:AIF
Altus Group
51.63
3.12
6.43%
FirstService Earnings Call Summary
Earnings Call Date:Apr 24, 2025
(Q1-2025)
| % Change Since: 1.31%|
Next Earnings Date:Jul 24, 2025
Earnings Call Sentiment Positive
The earnings call reflects a generally positive outlook, with strong performance in earnings and margin growth. However, challenges persist in organic growth for home services and delays in commercial contracts due to economic uncertainty. The company's solid financial position and strategic acquisitions provide a strong foundation for future growth.Q1-2025 Updates
Positive Updates
Impressive Earnings and Margin Growth
Earnings per share for the quarter were up 37%, and EBITDA increased by 24% with a 110 basis point improvement in consolidated margin.
Revenue Growth and Tuck-Under Acquisitions
Total revenues increased by 8% year-over-year, driven by tuck-under acquisitions, with FirstService Brands experiencing a 10% revenue increase.
Strong Financial Position
The company maintained conservative leverage at two times net debt to trailing twelve months EBITDA and bolstered debt capacity with a $1.75 billion credit facility.
Residential Segment Performance
FirstService Residential revenues were up 6%, and EBITDA grew by 17%, with margin improvements driven by cost efficiencies.
Continued Optimism for Future Growth
Despite macroeconomic uncertainties, the company is optimistic about accelerated activity levels with market stability and expects revenue growth similar to 8% in Q2.
Negative Updates
Organic Decline in Home Services
Home services revenues were down about 3% year-over-year, attributed to lower consumer confidence and economic uncertainty impacting lead flow.
Weather and Economic Uncertainty Impacting Roofing
Roofing segment experienced a 10% organic revenue decline due to weather and deferred large commercial contracts, affected by economic uncertainty and tariffs.
Commercial Installation Delays
Deferrals of larger commercial installation contracts in Century Fire and Roofing due to current economic uncertainty, viewed as a timing issue.
Company Guidance
During the First Quarter Investor Conference Call for the fiscal year 2025, the company reported robust financial results, with total revenues up 8% year-over-year, reaching $1.25 billion, largely driven by tuck-under acquisitions. Organic growth was slightly positive, with FirstService Residential seeing a 6% increase in revenues, while FirstService Brands experienced a 10% rise, though organic growth was slightly down. EBITDA increased by 24% to $103.3 million, resulting in a 110 basis point improvement in the consolidated margin to 8.3%. Earnings per share saw a significant 37% increase. The Roofing segment achieved nearly 50% revenue growth due to acquisitions, despite a 10% organic decline attributed to weather and contract deferrals. Restoration revenues were in line with expectations, bolstered by hurricane-related activities in the U.S., despite a decline in Canadian operations. Looking forward, the company anticipates similar growth patterns and margin improvements, with a focus on managing macroeconomic uncertainties and leveraging pent-up demand.FirstService Corporate Events
Executive/Board ChangesShareholder Meetings
FirstService Corporation Elects Directors and Confirms Auditor
Neutral
Apr 2, 2025
FirstService Corporation announced the election of eight directors at its virtual annual meeting of shareholders. The directors, listed in the company’s management information circular, will serve until the next annual meeting. Additionally, shareholders approved PricewaterhouseCoopers LLP as the auditor for the upcoming year and endorsed a non-binding advisory resolution on executive compensation. These decisions reflect the company’s ongoing commitment to strong governance and shareholder engagement.
Private Placements and FinancingBusiness Operations and Strategy
FirstService Expands Credit Facility to Bolster Growth
Positive
Feb 26, 2025
FirstService Corporation announced an expansion and extension of its unsecured revolving credit facility to US$1.75 billion, maturing in February 2030. This move, supported by a syndicate of 11 banks, enhances the company’s financial flexibility, allowing it to fund future growth initiatives and maintain a strong investment-grade balance sheet.
Business Operations and StrategyFinancial Disclosures
FirstService Reports Strong Financial Performance in 2024
Positive
Feb 5, 2025
FirstService Corporation, a leader in the real estate services sector, reported robust financial results for the fourth quarter and full year ending December 31, 2024. The company achieved significant revenue growth, with revenues reaching $1,365.3 million for the quarter and $5,216.9 million for the year. This financial performance was accompanied by an increase in profitability, as evidenced by the rise in both adjusted EBITDA and EPS, highlighting FirstService’s strong position in the market and the effectiveness of its operational strategies.
DividendsBusiness Operations and Strategy
FirstService Announces 10% Dividend Increase for 2025
Positive
Feb 4, 2025
FirstService Corporation announced a 10% increase in its quarterly cash dividend, raising it to US$0.275 per Common Share, effective April 2025. This marks the company’s tenth consecutive year of at least 10% annual dividend growth, a testament to its strong earnings and cash flow growth. The increase is supported by a business model focused on growth initiatives and financial flexibility, aiming to deliver incremental returns to shareholders.
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.