COMFORT SYSTEMS USA, INC. (FIX): what the price assumes

In the published model solve dated 2026-Q2, anchored at $1522.80, COMFORT SYSTEMS USA, INC. (FIX) is priced for +37.4% growth. boothcheck publishes no house fair value, target price, or buy/sell rating; individual model outputs and user-controlled scenarios are analytical inputs, not Boothcheck targets. Narrative composed 2026-07-26.

Generated: 2026-08-31 · Source: https://boothcheck.com/report/FIX

Headline

What The Price Assumes (Inversion)

The assumption today's price embeds, recovered by inverting the valuation.

The operating-margin figure is value-band context at year 9: derived from the framework's value band, a separate calculation — not part of the priced-in solve.

Solve inputs: computed at a 11.6% cost of capital with 4% terminal growth over a 5-year stage.

How unusual the bet is: within-range (limited comparison data)

Valuation X-Ray

Asset, earnings-power and peer-multiple models all land far below the price; ONLY the growth-DCF reaches it. The bet is durable compounding the static frames structurally cannot price (a moat/durability premium).

How the valuation models price the stock relative to the market price. Price/FV above 1.0 means the market pays more than that lens defends (expensive); at or below 1.0 the lens can defend the price.

Families that justify the price: Growth Families that call it expensive: Asset, Earnings, Relative

The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 9.2%); the inversion above states its own rate.

Per-Model Detail (n=14)

Economic-Unit Decomposition (Sum Of The Parts)

One or more material disclosed units has unresolved economics. Unknown/general is not evidence of homogeneity: segment SOTP is primary but incomplete, consolidated cash flow may remain only a secondary cross-check when every unit shares an enterprise basis, and one sector multiple or target margin is withheld.

No total common-equity value is stated. One or more material units lack a supported unit value. The displayed values are an indicative subtotal; consolidated debt and cash cannot be applied to a fraction of the company.

Solvency

Bullet Takeaways

• Work already sold but not yet built reached 14.06 billion dollars at 30 June 2026, against 8.12 billion a year earlier, and 13.70 billion of that was same-store rather than bought in, so the order book roughly doubled without an acquisition doing the work.
• The concentration behind that growth is specific and worth naming: the 10-K says demand has been especially strong in the technology sector, particularly for data centers, and in the prior year a single Texas electrical operation accounted for 649.3 million dollars of an 861.2 million dollar same-store revenue increase.
• The 1.14 billion dollars of operating cash flow reported for the June quarter is mostly customers paying ahead of the work: billings in excess of costs and deferred revenue rose from 2,120.3 million dollars at the end of 2025 to 3,231.1 million by 30 June 2026, and that balance runs the other way if order intake slows.

Bull Case

Contractors do not usually get paid first. Comfort Systems does. At 30 June 2026 the balance sheet carried 3,231.1 million dollars of billings in excess of costs and deferred revenue, up from 2,120.3 million at the end of 2025, which is customers advancing money for work not yet performed. The 10-K describes the mechanism plainly: Contract liabilities consist of advance payments and billings in excess of revenue recognized. Advance payments from customers related to work not yet started are classified as deferred revenue. A business that collects before it spends funds its own growth out of its customers' balance sheets rather than its own, and that is why a company adding revenue at this pace holds more cash than debt rather than less.

The scale of what is being funded is the second thing. Backlog reached 14.06 billion dollars at the end of June 2026 against 8.12 billion a year earlier, and on a same-store basis, stripping out acquired businesses, it still reached 13.70 billion. Revenue for the June quarter was 3,265.7 million dollars against 2,173.3 million, a fifty percent increase, and for the six months 6,131.0 million against 4,004.6 million. The order book is therefore growing faster than the revenue it feeds, which is the arrangement a contractor wants and rarely gets.

The part that separates this from a simple volume story is what happened to margin while all that volume arrived. Gross profit for the June quarter reached 844.2 million dollars on 3,265.7 million of revenue, and operating income reached 558.0 million, or about 17.1 cents of operating profit on the revenue dollar, against 13.8 cents in the same quarter of 2025. Contractors taking on a surge of work normally give margin away to get it, through subcontracting at short notice, overtime, and bidding thin to hold capacity. This one widened. Diluted earnings per share reached 12.53 dollars for the quarter against 6.53.

The structure underneath is a decentralised roll-up, 206 locations across 150 cities, where local operating companies keep their customer relationships and the parent supplies capital and scale. That is why the growth shows up unevenly by geography: the prior year's same-store increase of 861.2 million dollars in revenue was led by 649.3 million from the Texas electrical operation alone, with the 10-K noting that demand has been especially strong in the technology sector, particularly for data centers. The bull reading of that concentration is that the company happened to own exactly the right electrical contractor in exactly the right state when a wave of capital spending arrived, and that reputation in this trade travels: the customers awarding these jobs award them to firms that have already delivered one.

The obvious objection is that all of this is a cycle. It might be. But cycles usually announce themselves in the order book before the income statement, and this order book grew sequentially as well as annually, from 12.45 billion dollars at 31 March 2026 to 14.06 billion three months later. Meanwhile the company holds cash and equivalents of 1,854.8 million dollars against total borrowings of 54.1 million, earned 11.1 million dollars of interest income in the quarter against 1.4 million of interest expense, and raised the quarterly dividend to 0.90 dollars a share. Whatever the cycle does, this balance sheet is not the thing that breaks.

Bear Case

The question every contractor eventually answers is whether the earnings on display are the level or the peak, and Comfort Systems is currently reporting the best numbers in its history into the most concentrated capital-spending boom in the economy. Look at what the business actually is: roughly 63% of revenue comes from new construction and another 23% from construction inside existing buildings. Service projects and the recurring maintenance and monitoring work that would smooth a downturn together account for about 13%. This is a construction company with a small service annuity attached, not a service company with construction upside.

The demand behind the record is narrower than the headline suggests. The 10-K attributes the strength to the technology sector and specifically to data centres, and in the most recent full year a single Texas electrical operation generated 649.3 million dollars of an 861.2 million dollar same-store revenue increase. That is roughly three quarters of the organic growth from one operating unit serving one end market. Data-centre construction is being funded by a small number of very large technology buyers whose capital budgets are set annually and can be reset annually. The 10-K does not hide the exposure, warning that projects may remain in our backlog for an extended period of time, or project cancellations or scope adjustments may occur with respect to contracts reflected in our backlog, and that The loss of one or a few customers could adversely affect our business.

The cash flow deserves a second reading before it is treated as earnings quality. Operating cash flow was 1.14 billion dollars in the June quarter and 1.53 billion for the six months, against net income of 812.0 million for the same six months. The gap is contract liabilities: billings in excess of costs and deferred revenue rose 1,110.8 million dollars over those six months. That is customers prepaying for work not yet done. It is a genuine and enviable feature of the business model, and it is also a liability that gets worked off as the jobs are built. If bookings flatten, revenue keeps running for a while off the backlog while the cash flow turns around first, because the advances stop arriving before the work stops being done.

Margins are the other thing to hold lightly. About 17.1 cents of operating profit on the revenue dollar in the June quarter, against 13.8 a year earlier, is an extraordinary figure for mechanical and electrical contracting, a trade whose long-run economics involve competitive bidding against local firms with the same subcontractors and the same labour pool. The 10-K describes that reality without adornment: Typically, customers will seek pricing from competitors for a given project. Pricing power in contracting comes from scarcity of qualified capacity, and scarcity of capacity is exactly the condition a boom removes over time as competitors hire, train and bid.

Which brings the argument to the price. Every static way of valuing this business lands well below where the shares trade. Book value plus profitability, capitalised trailing earnings power, and comparison against peer multiples all sit far under the current price, and only the method that projects the recent growth forward and discounts it back reaches it. The multiple sits at the very top of its peer group, well beyond the upper quartile, and the growth pace it embeds has historically been sustained over the required stretch by only about 21% of companies that reached it. That is the arithmetic of a durability premium. It is defensible if the data-centre build is a decade-long re-plumbing of the economy. It is not defensible if it is a capital-spending cycle with an ordinary ending, and nothing in this company's financial statements can tell you which.

Valuation

Comfort Systems is a mechanical and electrical contractor being priced as a compounder, and both halves of that sentence are supported by the numbers. The compounder half: revenue for the June 2026 quarter grew fifty percent, operating income nearly doubled to 558.0 million dollars, and the order book reached 14.06 billion. The contractor half: the work is competitively bid, the customer base is concentrated in one end market, and roughly 86% of revenue is construction rather than recurring service.

What the price assumes follows from that tension. The market is paying a multiple of company-wide operating profit that sits at the top of the peer group and well beyond its upper quartile, and holding it requires operating growth to stay near the ceiling a self-funding business can reach for a sustained stretch. Historically only about a fifth of companies reaching that pace have held it that long. The near-term rate is not the stretch; the company has just delivered it. The stretch is the persistence.

The disagreement among methods is unusually clean here, and it points one way. Approaches that value the equity off book value plus profitability land far under the current price. So does capitalised earnings power, which asks what the business is worth if it simply keeps earning what it has earned without growing. So do the peer-multiple comparisons, though by less. Only the forward cash-flow approach, which carries the recent growth rate into its projection, reaches the price. When one forward method carries the entire valuation and every backward-looking one sits well below, the premium is a bet on durability that static frames cannot show, and naming it as such is more honest than averaging the methods into a number.

The most concrete "what has to be true" is the conversion of backlog into margin. Trailing operating profit for the twelve months ended 30 June 2026 came to about 1,849 million dollars, built from 1,315 million reported for the year ended 31 December 2025 plus the improvement across the first half of 2026. Backlog of 14.06 billion dollars is therefore something over a year of revenue at the current run rate. For the price to work, that backlog has to convert at something close to today's margin, and the backlog after it has to be at least as large. Both conditions are being met right now. Neither is contractual.

Solvency imposes no constraint at all, which is rare for a contractor and worth stating precisely. Cash and equivalents stood at 1,854.8 million dollars on 30 June 2026 against total borrowings of 54.1 million, and interest income of 11.1 million dollars in the quarter exceeded interest expense of 1.4 million by a wide margin. Weighted average diluted shares came to 35,254 thousand in the June quarter against 35,369 thousand a year earlier, so the count edged down rather than up. The downside in this name has nothing to do with the balance sheet and everything to do with what a slower order book would do to a multiple built on the current one.

Catalysts

The second-quarter report on 23 July 2026 is the most recent and most decisive data point. Net income reached 441.6 million dollars, or 12.53 dollars per diluted share, against 230.8 million and 6.53 dollars a year earlier, on revenue of 3.27 billion dollars against 2.17 billion. Operating cash flow for the quarter was 1.14 billion dollars against 252.5 million. For the six months, net income was 812.0 million dollars, or 23.03 dollars per diluted share, on revenue of 6.13 billion.

The order book is the number this company is judged on, and it moved in both directions that matter. Backlog stood at 14.06 billion dollars at 30 June 2026, against 12.45 billion at 31 March 2026 and 8.12 billion at 30 June 2025, with same-store backlog reaching 13.70 billion from that same 8.12 billion base. Management attributed the growth to ongoing demand and said it was optimistic about results for the remainder of 2026 and into 2027. Sequential backlog growth is the leading indicator here; the revenue line lags it by quarters.

Two governance and capital-return items sit alongside. The board declared a quarterly dividend of 0.90 dollars a share, an increase of 0.10 from the previous rate, payable 24 August 2026 to stockholders of record on 13 August 2026. Separately, the company announced leadership changes effective 1 July 2026: Craig Sasser, previously regional vice president for the Atlantic region, became chief operating officer, and Briston Blair moved from senior vice president for innovation and strategy to chief strategy and innovation officer, with Trent McKenna continuing as president. Internal promotions rather than outside hires, at a company whose model depends on the operators knowing the local businesses.

Peer Cohorts (Per Segment, With Filing Citations)

Mechanical Segment (reported)

• IESC (IES Holdings, Inc.)
• FY2025 10-K: …or both. A significant portion of our larger projects is awarded from long-term, repeat customers. From time to time, we are contracted on projects with completion times extending beyond one year or over several years, which are generally more complex and difficult to estimate. Competition The electrical and…
• FY2025 10-K: …constant presence. We also provide mechanical services such as maintenance agreements, installation, or replacement of mechanical equipment for commercial and industrial facilities. This segment provides services for a variety of project types, including data centers, manufacturing facilities, office buildings, wind…
• EME (EMCOR Group, Inc.)
• FY2025 10-K: …buildings); (e) the healthcare market sector (including hospitals, surgical centers, rehabilitation and nursing facilities, and medical offices); (f) the institutional market sector (including educational and correctional facilities and research laboratories); (g) the water and wastewater market sector; (h) the…
• FY2025 10-K: Controls and filtration systems; • Water and wastewater treatment systems; • Central plant heating and cooling systems, including manufacturing and installing sheet metal air handling systems; • Millwright services; and • Steel fabrication, erection, and welding services. The electrical and mechanical construction…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …2025-01-01 2025-12-31 0000015615 mtz:MidwestOperatingEngineersPensionTrustFundMember 2024-01-01 2024-12-31 0000015615 mtz:MidwestOperatingEngineersPensionTrustFundMember 2023-01-01 2023-12-31 0000015615 mtz:ConstructionLaborersPensionTrustForSouthernCaliforniaMember 2025-01-01 2025-12-31 0000015615…
• FY2025 10-K: 2-31 0000015615 mtz:EquipmentCompanyAcquisitionTwoMember 2023-01-01 2023-12-31 0000015615 mtz:A2023AcquisitionsMember 2023-12-31 0000015615 mtz:A2023AcquisitionsMember 2025-12-31 0000015615 mtz:ContingentConsiderationValueOfAdditionalPaymentsMember mtz:A2021AcquisitionsHenkelsMcCoyGroupIncMember 2025-12-31 0000015615…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …of our segments vary widely, from small local contractors to large international construction companies. We aim to position ourselves in the mid-level market, traditionally bidding on work too large for the small local contractors yet too small for the large national and international construction companies. However,…
• FY2025 10-K: CMember strl:BusinessCombinationProFormaInformationNonrecurringAdjustmentAnnualIntangibleAssetAmortizationMember 2025-01-01 2025-12-31 0000874238 strl:CECFacilitiesGroupLLCMember us-gaap:AcquisitionRelatedCostsMember 2025-01-01 2025-12-31 0000874238 strl:CECFacilitiesGroupLLCMember…
• PWR (Quanta Services, Inc.)
• FY2025 10-K: …to fluctuate. Despite these fluctuations and cyclicality, we continue to selectively pursue larger pipeline project opportunities to the extent they satisfy our margin and risk profiles. Additionally, the significant increase in demand for electric power is resulting in an increase in planning for new natural gas…
• FY2025 10-K: …solutions for the electric and gas utility, power generation, large load center, manufacturing, communications, pipeline and energy industries in the United States, Canada, Australia and select other international markets. We provide design, engineering, procurement, construction, upgrade and repair and maintenance…
• GVA (GRANITE CONSTRUCTION INC)
• FY2025 10-K: …gva:ConsolidatedConstructionCorporateJointVentureMember srt:MinimumMember 2025-01-01 2025-12-31 0000861459 us-gaap:VariableInterestEntityPrimaryBeneficiaryMember gva:ConsolidatedConstructionCorporateJointVentureMember srt:MaximumMember 2025-01-01 2025-12-31 0000861459…
• FY2025 10-K: 2025-01-01 2025-12-31 0000861459 gva:PensionTrustFundForOperatingEngineersPensionPlanMember 2024-01-01 2024-12-31 0000861459 gva:PensionTrustFundForOperatingEngineersPensionPlanMember 2023-01-01 2023-12-31 0000861459 gva:Locals302And612IuoeemployersConstructionIndustryRetirementPlanMember 2025-01-01 2025-12-31…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …2025-01-01 2025-12-31 0000700923 myrg:MarketTypeElectricalConstructionMember us-gaap:ProductConcentrationRiskMember us-gaap:SalesRevenueNetMember myrg:CommercialAndIndustrialMember 2025-01-01 2025-12-31 0000700923 myrg:CommercialAndIndustrialMember myrg:MarketTypeElectricalConstructionMember 2024-01-01 2024-12-31…
• FY2025 10-K: PostretirementBenefitPlansDefinedBenefitMember 2024-01-01 2024-12-31 0000700923 myrg:SanMateoCountryElectricalConstructionIndustryRetirementPlanMember us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2023-01-01 2023-12-31 0000700923…

Electrical Segment (reported)

• IESC (IES Holdings, Inc.)
• FY2025 10-K: …or both. A significant portion of our larger projects is awarded from long-term, repeat customers. From time to time, we are contracted on projects with completion times extending beyond one year or over several years, which are generally more complex and difficult to estimate. Competition The electrical and…
• FY2025 10-K: …Competition Our competition primarily consists of small, privately owned contractors who generally have limited access to capital. We believe that we have a competitive advantage over these smaller competitors due to our key employees' long-standing customer relationships, our financial capabilities, our employee…
• EME (EMCOR Group, Inc.)
• FY2025 10-K: …Connecticut 06851-1092, and our telephone number at those offices is (203) 849-7800. 1 Table of Contents Operations Electrical and mechanical construction and facilities services operations: Our electrical and mechanical construction services primarily involve the design, integration, installation, start-up,…
• FY2025 10-K: 01-01 2023-12-31 0000105634 eme:ElectricalContractorsAssociationOfTheCityOfChicagoLocalUnion134IBEWJointPensionTrustOfChicagoPensionPlan2Member us-gaap:PensionPlansDefinedBenefitMember 2025-01-01 2025-12-31 0000105634…
• MYRG (MYR GROUP INC.)
• FY2025 10-K: …processing facilities, water/waste-water treatment facilities, mining facilities, intelligent transportation systems, roadway lighting, signalization and electric vehicle charging infrastructure. In our C&I segment, we generally provide our electric construction and maintenance services as a subcontractor to general…
• FY2025 10-K: …individual project performance, project location and other items, to support the CODM's assessment of segment performance and resource allocation decisions. Transmission and Distribution: The T&D segment provides a broad range of services on electric transmission and distribution networks and substation facilities…
• PWR (Quanta Services, Inc.)
• FY2025 10-K: …States that specializes in electrical solutions including low voltage technology, testing, engineering, integration, renewable energy and electric prefabrication solutions (which has primarily been included in the Electric segment) and a business located in the United States that provides helicopter services (which…
• FY2025 10-K: …(1) Electric Infrastructure Solutions (Electric) and (2) Underground Utility and Infrastructure Solutions (Underground and Infrastructure). The Electric segment consists of the historical Electric Power Infrastructure Solutions and the Renewable Energy Infrastructure Solutions segments. In conjunction with this…
• MTZ (MasTec, Inc.)
• FY2025 10-K: …derive their revenue primarily from the engineering, installation and maintenance of infrastructure, primarily in North America. The Communications segment performs engineering, construction, maintenance and customer fulfillment activities related to communications and digital infrastructure, primarily for wireless…
• FY2025 10-K: …wireless and wireline/fiber networks, data center buildout and interconnection, wireless integration and optimization and install-to-the-home services, as well as select utility infrastructure, among others. Our Clean Energy and Infrastructure segment primarily serves energy, utility, government and other end-markets…
• STRL (Sterling Infrastructure, Inc.)
• FY2025 10-K: …101.DEF XBRL Taxonomy Extension Definition Linkbase Document 101.LAB XBRL Taxonomy Extension Label Linkbase Document 101.PRE XBRL Taxonomy Extension Presentation Linkbase Document 104 Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) (1) Management contract, compensatory plan or…
• FY2025 10-K: …strl:TransportationSolutionsSegmentMember 2025-01-01 2025-12-31 0000874238 srt:MaximumMember strl:TransportationSolutionsSegmentMember 2025-01-01 2025-12-31 0000874238 srt:MinimumMember strl:EInfrastructureSolutionsSegmentMember 2025-01-01 2025-12-31 0000874238 srt:MaximumMember…

Methodology Note

• Priced-in inversion: the valuation is inverted on the current price to recover the operating-income growth, duration, and steady-state margin the price embeds (ROE for financials, FFO growth for REITs).
• Valuation x-ray: the valuation models, grouped into four families (asset, earnings, relative, growth). Each model is expressed as a price/FV ratio (distance from price), not a point fair-value estimate. The spread across families is the disagreement.
• Economic-unit decomposition (SOTP): each disclosed business unit is assigned its native valuation basis before any multiple is applied. Operating units are valued on enterprise value; funded financial units are valued on their own common equity, because their borrowings fund earning assets rather than levering the parent. A company total is stated only once every material unit carries a supported value and the parent capital bridge reconciles.
• Solvency: net cash/debt, net-debt-to-NOPAT, interest coverage, and share-count CAGR from EDGAR financials (net debt / FFO and fixed-charge coverage for REITs; regulatory-capital framing for financials).
• Peer cohorts: per-segment comparables with deep-linkable SEC filing citations.

Fundamentals sourced from SEC EDGAR filings. Current price from Databento. The priced-in inversion and valuation x-ray are computed by the boothcheck engine; narrative composed by AI from the structured data.