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Comfort Systems USA, Inc. (FIX) Hits Fresh High: Is There Still Room to Run?
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Have you been paying attention to shares of Comfort Systems (FIX - Free Report) ? Shares have been on the move with the stock up 35.9% over the past month. The stock hit a new 52-week high of $306 in the previous session. Comfort Systems has gained 48.7% since the start of the year compared to the 9.1% move for the Zacks Construction sector and the 6.3% return for the Zacks Building Products - Air Conditioner and Heating industry.
What's Driving the Outperformance?
The stock has a great 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 February 22, 2024, Comfort Systems reported EPS of $2.55 versus consensus estimate of $2.15.
Valuation Metrics
While Comfort Systems has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Comfort Systems has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 26.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 26.9X. On a trailing cash flow basis, the stock currently trades at 27.6X versus its peer group's average of 27.2X. 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 favorable earnings estimate revisions from covering analysts.
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 meets the list of requirements. Thus, it seems as though Comfort Systems shares could have potential in the weeks and months to come.
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Comfort Systems USA, Inc. (FIX) Hits Fresh High: Is There Still Room to Run?
Have you been paying attention to shares of Comfort Systems (FIX - Free Report) ? Shares have been on the move with the stock up 35.9% over the past month. The stock hit a new 52-week high of $306 in the previous session. Comfort Systems has gained 48.7% since the start of the year compared to the 9.1% move for the Zacks Construction sector and the 6.3% return for the Zacks Building Products - Air Conditioner and Heating industry.
What's Driving the Outperformance?
The stock has a great 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 February 22, 2024, Comfort Systems reported EPS of $2.55 versus consensus estimate of $2.15.
Valuation Metrics
While Comfort Systems has moved to its 52-week high in the recent past, investors need to be asking, what is next for the company? A key aspect of this question is taking a look at valuation metrics in order to determine if the company is due for a pullback from this level.
On this front, we can look at the Zacks Style Scores, as these give investors a variety of ways to comb 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. The idea behind the style scores is to help investors pick the most appropriate Zacks Rank stocks based on their individual investment style.
Comfort Systems has a Value Score of D. The stock's Growth and Momentum Scores are A and A, respectively, giving the company a VGM Score of B.
In terms of its value breakdown, the stock currently trades at 26.8X current fiscal year EPS estimates, which is not in-line with the peer industry average of 26.9X. On a trailing cash flow basis, the stock currently trades at 27.6X versus its peer group's average of 27.2X. 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 favorable earnings estimate revisions from covering analysts.
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 meets the list of requirements. Thus, it seems as though Comfort Systems shares could have potential in the weeks and months to come.