FirstService Corporation (FSV): what the price requires
At today's price, FirstService Corporation (FSV) is priced for +12.0% growth. boothcheck doesn't publish a fair value or a price target; it shows what the price assumes, so you can judge whether that bar is too high.
Generated: 2026-07-19 · Source: https://boothcheck.com/report/FSV
Headline
| Field | Value |
|---|---|
| Ticker | FSV |
| Company | FirstService Corporation |
| Current price | $143.09/sh |
| Composition | FirstService Residential 42% / FirstService Brands company-owned operations 54% / FirstService Brands franchisor 4% / FirstService Brands franchise fee 0% |
What The Price Requires (Inversion)
The assumption today's price embeds, recovered by inverting the valuation.
| Field | Value |
|---|---|
| Inversion basis | whole-company |
| Operating margin needed | 1.3% |
| Operating margin today | 6.1% |
| Margin compression implied | -4.8pp |
| Implied growth | 12.0% |
| Multiple paid | 23x operating income |
The operating-margin requirement is derived from the framework's value band at year 9, a separately labeled basis from the headline growth/duration solve.
Solve inputs: computed at a 8.1% cost of capital with 4% terminal growth over a 5-year stage; each 1pp of cost of capital moves the implied operating-profit growth ~7.6pp.
Reconcile: at the x-ray's 9.3% required return this reads ~20.9%/yr; the models below use their own rates.
How unusual the bet is: within-range
| Reference | Value |
|---|---|
| vs own history | -0.52σ |
| sustained it ~5 years at this level | 50% |
| implied end-window share | 0% |
Valuation X-Ray
The price is justified by relative-multiple and growth-DCF; asset-based/earnings-power land below the price.
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.
| Family | Median price/FV | Models | Reads |
|---|---|---|---|
| Asset | 2.62x | 5 | expensive |
| Earnings | 2.94x | 5 | expensive |
| Relative | 0.79x | 6 | justifies |
| Growth | 0.73x | 3 | justifies |
Families that justify the price: Relative, Growth Families that call it expensive: Asset, Earnings
The models below discount at their own flat-beta convention rates (cost of equity 9.3%, WACC 8.3%); the inversion above states its own rate.
Per-Model Detail (n=19)
| Model | Family | FV | Price/FV | Applicable | Methodology |
|---|---|---|---|---|---|
| DCF Perpetual Growth | Growth | $211.98 | 0.68x | yes | FCF base $0.3B, growth 14% (input: historical growth), terminal g 4.0%, WACC 8.3%, 6yr projection |
| DCF Exit Multiple | Growth | $195.05 | 0.73x | yes | Exit EV/EBITDA: 12.8x / 14.8x / 16.8x (bear / base = today's held flat / bull), 6yr |
| Relative Valuation | Relative | $246.33 | 0.58x | yes | P/E 35x (static sector reference · 2026-04), scenarios: 28.9x / 35.0x / 41.1x (bear / base = reference held flat / bull), EV/EBITDA 20x |
| Simple DDM | Growth | — | — | no | — |
| Two-Stage DDM | Growth | — | — | no | — |
| Simple Excess Return | Asset | $45.07 | 3.17x | yes | BV/sh $30.07, ROE (TTM) 13.9%, ke 9.3% |
| Two-Stage Excess Return | Asset | $54.62 | 2.62x | yes | 5yr excess ROE then converge to ke=9.3% |
| Discounted Future Market Cap | Growth | $138.60 | 1.03x | yes | Rev $5.5B, growth 14% (input: historical growth; tapered), Terminal P/S: 1.0x / 1.2x / 1.4x (bear / base = today's held flat / bull, cap 8x) |
| Peter Lynch Fair Value | Relative | $108.30 | 1.32x | yes | FFO/share $7.22, growth 15% (input: historical FFO/share growth, 9y median), PEG=2.29 (Overvalued) |
| Margin Trajectory | Growth | — | — | no | — |
| Earnings Power Value | Earnings | $24.16 | 5.92x | yes | Normalized EBIT (5y avg op income, one-time charges added back) $0.27B × (1−28%) / WACC 8.3% → EPV (no growth) |
| Residual Income | Asset | $56.45 | 2.53x | yes | BV $30.07 + 5yr PV of (ROE (TTM) 13.9% − Kₑ 9.3%) × BV; BV grows 8.8%/yr |
| Graham Number | Asset | $69.90 | 2.05x | yes | √(22.5 × FFO/share $7.22 × BVPS $30.07) — Graham's conservative floor |
| EV/EBITDA Relative | Relative | $202.15 | 0.71x | yes | EBITDA $0.52B × sector EV/EBITDA 20.0x |
| FCF Yield | Earnings | $48.61 | 2.94x | yes | FCF $318.2M / Kₑ 9.3% — zero-growth perpetuity |
| SBC-Adj FCF Yield | Earnings | $42.14 | 3.40x | yes | SBC-adj FCF $0.29B (FCF $0.32B − SBC $0.03B) capitalized at Kₑ |
| Ben Graham Formula | Earnings | $232.97 | 0.61x | yes | FFO/share $7.22 × (8.5 + 2×15.0%) × (4.4 / 5.3%) |
| ROIC-Justified P/B | Asset | $33.95 | 4.21x | yes | BV $30.07 × (ROIC 9.3% / WACC 8.3%) |
| P/Sales Sector | Relative | $720.92 | 0.20x | yes | Revenue $5.50B × sector P/S 6.0x |
| PEG Fair Value | Relative | $162.45 | 0.88x | yes | FFO/share $7.22 × (PEG 1.5 × growth 15.0% (input: historical FFO/share growth, 9y median)) → PE 22.5x |
| Earnings Yield | Earnings | $78.05 | 1.83x | yes | FFO/share $7.22 / required return 9.3% (Rf 4.3% + ERP 5.0%) |
| Funds From Operations Multiple | Relative | $102.34 | 1.40x | yes | FFO/share $7.22 × 14.2x P/FFO (route cohort median, n=85); FFO $0.33B (FFO incl. D&A + impairments, FY2025, companyfacts), shares 46M |
| Clinical Phase NPV | Growth | — | — | no | — |
| Merton | Asset | — | — | no | — |
| V5 Mechanical | — | — | — | no | — |
Solvency
| Field | Value |
|---|---|
| Net debt | $928.3m |
| Net debt / NOPAT (after-tax) | 3.84x |
| Net debt / operating income (pre-tax) | 2.75x |
| Share count CAGR (dilution) | 0.8% |
| Burning cash | no |
Interest expense is not separately reported in the latest filings, so interest coverage cannot be computed.
Bullet Takeaways
- FirstService runs two essential-services businesses, residential property management and a stable of home-improvement and restoration brands, and it grew consolidated revenue 5% to $1.32 billion in the most recent quarter, with more than half of that organic.
- The biggest near-term risk is consumer weakness in home services, where management cited a sharp decline in customer leads that forced higher promotional spending to defend revenue.
- Watch the steady tuck-under acquisition pace and the residential property-management segment, which kept compounding even as the discretionary home-services side softened.
Bull Case
What the standard valuation models miss about FirstService is that almost none of its value sits on the balance sheet. The methods anchored on book value or capitalized current earnings land far below the current price, and they do so because they are measuring the wrong thing. FirstService is an asset-light services compounder: its value is in long-term property-management contracts, a portfolio of recognized service brands, and a repeatable acquisition machine, none of which shows up as a tangible asset. A street sweeper or a tanker has a book value; a thirty-year relationship managing a homeowners association does not, yet it is far more valuable. The book-value methods read $30 of equity per share and conclude the business is worth a fraction of its price, missing that the real assets are the contracts and the brands.
The residential business is the bedrock, and it behaves like an annuity. FirstService Residential manages thousands of communities, and its revenue grew 4%, entirely organic, with EBITDA up 10% and margin expanding. Property management is sticky, recurring, and essential: a community association does not stop needing management when the economy slows. That recurring base is what lets the company keep compounding through cycles, and it is exactly the kind of cash flow the asset-based methods cannot frame.
The second engine is the brands portfolio plus a disciplined roll-up. FirstService Brands grew revenue 6%, with strength at Century Fire and continued tuck-under acquisitions. The company buys smaller service businesses, plugs them into its franchise and operating systems, and compounds. Crucially, management runs this with discipline, completing two franchise acquisitions while explicitly choosing not to accelerate the pace, and maintaining liquidity above $1 billion with historically low leverage. That combination, a recurring property-management annuity plus a self-funded acquisition compounder, is why the growth-oriented and peer-multiple valuation methods point well above the current price. The peer cohort of real-estate services firms like Colliers and Cushman & Wakefield is where FirstService belongs, and within it FirstService's mix of recurring residential management and branded services is among the more durable.
Bear Case
Frame the bear around what the methods are saying, because they disagree sharply and the disagreement is instructive. Only the forward-growth and peer-multiple methods reach the current price; the asset-based and earnings-power methods land far below it. The conservative methods are likely the more honest read in one important sense: FirstService's current operating margin is just 6.1%, and its capitalized current earnings, valued without crediting future growth, support a price a fraction of today's. The bull explanation is that the asset-light model makes book value irrelevant, which is partly true, but it is also the argument every richly-valued roll-up makes right up until growth slows. The price requires the acquisition-and-organic compounding to continue for years, and the methods that decline to assume that land well below the quote.
The near-term crack is in the discretionary half of the business. Management was candid that Home Services hit pronounced weakness, with consumer sentiment, inflation, and external conditions driving significant declines in customer leads, forcing the company to spend more on promotion just to preserve revenue and capacity. Restoration, roofing, and home services showed flat organic revenue. When a services business has to raise promotional spending to defend volume, margins compress, and the consolidated adjusted EBITDA margin did slip in the quarter. The recurring residential side is steady, but the brands side is more exposed to the consumer cycle than the asset-light story implies, and a prolonged stretch of weak home-improvement demand would pressure the growth the valuation depends on.
The model also carries debt and depends on continued dealmaking. FirstService runs net debt of roughly $928 million, modest relative to its cash generation but real, and the roll-up strategy consumes capital with each acquisition. A compounder priced for continued tuck-under growth is vulnerable on two fronts: if acquisition targets get more expensive or scarcer, organic growth has to carry more weight, and if the consumer-exposed brands keep softening, organic growth itself weakens. The methods that reach the price assume both the deals and the organic engine keep running. The structural truth is that FirstService is a genuinely good business priced as a compounder, and the price has little room for the home-services weakness to persist or the acquisition pipeline to dry up.
Valuation
The methods disagree, and the disagreement is the heart of valuing an asset-light services compounder. At $138 (June 27, 2026), the forward-growth and peer-multiple families reach the price, while the asset-based and earnings-power families sit well below it. The growth methods, crediting low-double-digit growth, point above the price, and a sector earnings multiple lands near it. The asset methods, built from book value of about $30 per share, and the capitalized-earnings methods, valuing the thin 6% current margin, land far lower. For most companies, that wide a gap is a warning. For FirstService, it partly reflects a real mismatch between how the static methods measure value and where the value actually sits, in contracts and brands rather than on the balance sheet.
What the price requires is undemanding on margin and dependent on durable growth. The inversion shows the price needs only a fraction of a percent of operating margin to be supported, against the 6.1% the company earns, which means the market is not betting on margin expansion at all; it is betting on the revenue base compounding. That reframes the bet correctly: this is a volume-and-acquisition story, not a margin story. The growth methods that reach the price assume the residential annuity and the branded-services roll-up keep adding revenue at the recent pace. The peer comparison is to other real-estate and property services firms rather than to asset-heavy real estate, and on that basis the multiple is full but not absurd for a recurring-revenue compounder.
Solvency is comfortable and supports the strategy. FirstService carries net debt of about $928 million against strong cash generation, with management describing liquidity above $1 billion and historically low leverage, which funds the acquisition pipeline without strain. The recurring property-management cash flow is the stabilizer that lets the company carry debt through cycles. The decisive variable is not the balance sheet but the durability of the growth: whether the residential annuity keeps compounding and whether the consumer-exposed home-services brands recover. At today's price, the static methods say expensive and the growth methods say fair, and which is right depends entirely on the compounding continuing.
Catalysts
FirstService reported first-quarter 2026 results in April, with consolidated revenue of $1.32 billion, up 5%, more than half of it organic, and consolidated adjusted EBITDA of $106 million at an 8% margin, down about 30 basis points year over year. Adjusted earnings per share were $0.95, up 3%. FirstService Residential grew revenue 4%, entirely organic, with EBITDA up 10% and margin expansion, while FirstService Brands grew revenue 6% on strength at Century Fire and tuck-under acquisitions but flat organic revenue in restoration, roofing, and home services.
The notable soft spot was Home Services, where management cited pronounced weakness as consumer sentiment, inflation, and external conditions drove significant declines in customer leads, prompting higher promotional investment to preserve revenue and capacity utilization. The recovery or further deterioration of that discretionary demand is the near-term swing factor for the brands segment.
On capital allocation, the company completed two franchise acquisitions and signaled continued tuck-under activity across segments, while stating no intention to accelerate the pace of franchise conversions and maintaining liquidity above $1 billion. The items to watch are the trajectory of organic growth in the consumer-facing brands, the pace and pricing of acquisitions, and the continued steadiness of the residential property-management annuity that anchors the model.
Peer Cohorts (Per Segment, With Filing Citations)
Core business (reported)
- CBRE (CBRE GROUP, INC.)
- FY2025 10-K: …and global competitors across all of our business lines and the geographies that we serve, and further industry consolidation, fragmentation or innovation could lead to significant future competition. We compete across a variety of business disciplines within the commercial real estate services and investment…
- FY2025 10-K: …and amortization expense decreased 6.3%, reflecting lower amortization expense due to intangible assets being fully amortized in 2024. 33 Table of Contents Real Estate Investments The following table summarizes our results of operations for our REI operating segment for the years ended December 31, 2025 and 2024…
- CIGI (Colliers International Group Inc.)
- (no filing in the citation store)
- CWK (CUSHMAN & WAKEFIELD LTD.)
- FY2025 10-K: …client relationships while moving up the value chain and capture market share in high-growth asset classes, such as data centers. We aim to bring data-driven insights to clients, providing the most insightful and forward-thinking solutions. In addition, we intend to continue investing in high-caliber talent, creating…
- FY2025 10-K: …or the loss of a significant number of key revenue-producing advisors, if we are unable to quickly hire and integrate qualified replacements, could materially adversely affect our business, financial condition and results of operations. Competition for these personnel is significant, and our industry is 13 Table of…
- JLL (Jones Lang LaSalle Incorporated)
- FY2025 10-K: …may indicate a rate of growth or decline that might not have been consistent with the real underlying rate of growth or decline in the local operations. Consequently, we provide information about the impact of foreign currencies in the period-to-period comparisons of the reported results of operations in our…
- FY2025 10-K: , monitoring and compliance reporting. As sustainability becomes increasingly central to real estate decision-making, our capabilities allow us to help clients navigate this evolving landscape, create meaningful career opportunities for our employees, and generate value for our shareholders. COMPETITION We operate…
- NMRK (NEWMARK GROUP, INC.)
- FY2025 10-K: …Real Estate Services Industry We operate in a highly competitive industry with numerous competitors, some of which may have greater financial and operational resources than we do. We compete to provide a variety of services within the commercial real estate industry. Each of these business disciplines is highly…
- FY2025 10-K: …than we are at growing through merger and acquisition activity. See the heading "Competition" under Part I, Item 1, Business for more information. In general, there can be no assurance that we will be able to continue to compete effectively with respect to any of our commercial real estate business lines or on an…
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.
- 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.
Sources
Q1 2026 results, April 2026 · Q1 2026 results release, April 2026