Comfort Systems USA, Inc. (NYSE:FIX) Just Reported Annual Earnings And Analysts Are Lifting Their Estimates

It's been a pretty great week for Comfort Systems USA, Inc. (NYSE:FIX) shareholders, with its shares surging 12% to US$279 in the week since its latest yearly results. The result was positive overall - although revenues of US$5.2b were in line with what the analysts predicted, Comfort Systems USA surprised by delivering a statutory profit of US$9.01 per share, modestly greater than expected. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. Readers will be glad to know we've aggregated the latest statutory forecasts to see whether the analysts have changed their mind on Comfort Systems USA after the latest results.

View our latest analysis for Comfort Systems USA

After the latest results, the three analysts covering Comfort Systems USA are now predicting revenues of US$6.55b in 2024. If met, this would reflect a huge 26% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to surge 22% to US$11.10. Before this earnings report, the analysts had been forecasting revenues of US$5.89b and earnings per share (EPS) of US$9.62 in 2024. There has definitely been an improvement in perception after these results, with the analysts noticeably increasing both their earnings and revenue estimates.

With these upgrades, we're not surprised to see that the analysts have lifted their price target 6.4% to US$234per share. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Comfort Systems USA analyst has a price target of US$296 per share, while the most pessimistic values it at US$200. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Comfort Systems USA's growth to accelerate, with the forecast 26% annualised growth to the end of 2024 ranking favourably alongside historical growth of 17% per annum over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in a similar industry are forecast to grow their revenue at 7.1% per year. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Comfort Systems USA to grow faster than the wider industry.

The Bottom Line

The biggest takeaway for us is the consensus earnings per share upgrade, which suggests a clear improvement in sentiment around Comfort Systems USA's earnings potential next year. Happily, they also upgraded their revenue estimates, and are forecasting them to grow faster than the wider industry. We note an upgrade to the price target, suggesting that the analysts believes the intrinsic value of the business is likely to improve over time.

With that said, the long-term trajectory of the company's earnings is a lot more important than next year. We have estimates - from multiple Comfort Systems USA analysts - going out to 2026, and you can see them free on our platform here.

Another thing to consider is whether management and directors have been buying or selling stock recently. We provide an overview of all open market stock trades for the last twelve months on our platform, here.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.