Why Comfort Systems USA, Inc. (NYSE:FIX) Could Be Worth Watching

Comfort Systems USA, Inc. (NYSE:FIX), is not the largest company out there, but it led the NYSE gainers with a relatively large price hike in the past couple of weeks. As a well-established company, which tends to be well-covered by analysts, you could assume any recent changes in the company’s outlook is already priced into the stock. However, could the stock still be trading at a relatively cheap price? Let’s take a look at Comfort Systems USA’s outlook and value based on the most recent financial data to see if the opportunity still exists.

See our latest analysis for Comfort Systems USA

What's The Opportunity In Comfort Systems USA?

Great news for investors – Comfort Systems USA is still trading at a fairly cheap price according to my price multiple model, where I compare the company's price-to-earnings ratio to the industry average. In this instance, I’ve used the price-to-earnings (PE) ratio given that there is not enough information to reliably forecast the stock’s cash flows. I find that Comfort Systems USA’s ratio of 17.32x is below its peer average of 26.6x, which indicates the stock is trading at a lower price compared to the Construction industry. However, given that Comfort Systems USA’s share is fairly volatile (i.e. its price movements are magnified relative to the rest of the market) this could mean the price can sink lower, giving us another chance to buy in the future. This is based on its high beta, which is a good indicator for share price volatility.

Can we expect growth from Comfort Systems USA?

Future outlook is an important aspect when you’re looking at buying a stock, especially if you are an investor looking for growth in your portfolio. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at the company's future expectations. However, with a relatively muted profit growth of 2.1% expected over the next couple of years, growth doesn’t seem like a key driver for a buy decision for Comfort Systems USA, at least in the short term.

What This Means For You

Are you a shareholder? Even though growth is relatively muted, since FIX is currently trading below the industry PE ratio, it may be a great time to increase your holdings in the stock. However, there are also other factors such as financial health to consider, which could explain the current price multiple.

Are you a potential investor? If you’ve been keeping an eye on FIX for a while, now might be the time to enter the stock. Its future profit outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy FIX. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed assessment.

If you want to dive deeper into Comfort Systems USA, you'd also look into what risks it is currently facing. Case in point: We've spotted 2 warning signs for Comfort Systems USA you should be mindful of and 1 of these can't be ignored.

If you are no longer interested in Comfort Systems USA, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.