Episode
Comfort Systems Stock (FIX): +92% EPS and a Record $14B Backlog — So Why We Say HOLD
- Published
- Jul 23, 2026
- Duration seconds
- 834
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Summary
Comfort Systems USA, Inc. (FIX) Q2 2026 — Comfort Systems USA (FIX), the mechanical & electrical contractor at the center of the data-center construction boom, reported a record Q2 2026: GAAP EPS of $12.53 beat the ~$10.45 estimate (+92% YoY) on revenue of $3.27B (+50%), gross margin expanded to 25.9% and operating margin to 17.1% ($558M, +86%), and adjusted EBITDA rose 80% to $600M. Backlog hit a record $14.06B (+73% YoY), with same-store backlog of $13.70B (+69%) — almost entirely organic — driven by data centers (Electrical segment +81%), healthcare and industrial reshoring. Operating cash flow was an 'unprecedented' $1.14B; the company holds ~$1.85B cash vs ~$0.33B debt (net cash) and raised its dividend again to $0.80/qtr. The catch: the stock has tripled off its $543 low to ~$1,831 (~45x trailing earnings), margins sit at cyclical records, and part of the record cash is customer prepayments that reverse as growth slows. Our base-case owner-earnings DCF lands near $1,550 — below the price, and below the Street's ~$2,015 average target. Our call: HOLD. Comfort Systems USA is the quiet giant of the data-center build-out — a mechanical and electrical contractor that installs the HVAC, piping and power systems inside America's commercial and industrial buildings, and one of the best-performing large caps of the cycle. Q2 2026 was a record in virtually every line: revenue up 50% to $3.27B, GAAP EPS of $12.53 (up 92%, beating the ~$10.45 estimate), gross margin expanded to 25.9% and operating margin to 17.1% ($558M, +86%), adjusted EBITDA up 80% to $600M, and an 'unprecedented' $1.14B of operating cash flow. The engine is a record $14.06B backlog — up 73% year over year and, crucially, up 69% on a same-store basis, so this is almost entirely organic growth handed ov…