One-glance verdict
Overvalued
$-7.79 our estimate vs market $37.66
Wall Street consensus: $109.00 (-1,499.9% lower than our fair-value estimate)
584% below our estimate, beyond the bull case
Fundamentals snapshot
CECO Environmental Corp.
CECO · TEX · Industrials · Pollution & Treatment Controls
Current price
$37.66
52-week range
$37.15 - $101.24
Market cap
$2.21B
Balance sheet
Distressed
2.47x Stretched
Net debt $710.76M. Interest coverage shows how many times profit covers the interest bill.
What stands out
2 Rewards
3 Risks
2 rewards · 3 risks
- Reward Revenue grew 16.6% last year.
- Reward Free cash flow was positive in 9/10 years.
- Risk Net debt grew 167.4% over 3 years.
- Risk Return on equity was -2.4% last year — the company lost money on shareholders' equity.
What this company does
CECO Environmental Corp.
CECO Environmental Corp. helps factories and industrial sites clean their air and water, and also works on energy-related projects. Their main income comes from selling these important environmental solutions and services. This is significant because it means they are a key player in helping industries meet environmental rules and become more sustainable.
How the company got here
CECO Environmental Corp. has a long history, tracing its roots back to 1869. Over its many decades, the company has evolved to focus on providing essential environmental solutions for industrial clients. This journey has involved adapting to changing regulations and technological advancements in pollution control and industrial processes. Today, CECO stands as a company dedicated to helping industries manage their environmental impact and improve operational efficiency.
What it actually does
Imagine factories and large industrial plants that produce a lot of air pollution or need to treat water before it's released. CECO Environmental provides the specialized equipment and services that these facilities need to clean up their emissions and wastewater. This includes things like systems to capture dust, scrub harmful gases from the air, and treat industrial water. Essentially, CECO helps heavy industries operate more cleanly and safely, meeting environmental standards.
Engineered Systems
This part of CECO focuses on designing and building custom systems to tackle specific industrial challenges, particularly in air quality. Think of it as creating bespoke solutions for a factory's unique pollution problem. They offer equipment like fluid bed cyclones, which separate particles from air, and thermal oxidizers, which burn off harmful gases. These systems are crucial for industries like manufacturing, food processing, and semiconductor production to control the air they release.
Industrial Process Solutions
This segment is all about providing solutions that help industrial processes run smoothly and efficiently, often with an environmental benefit. It includes a wide range of products and services, from pumps that handle difficult fluids to systems that treat oily water. CECO also offers solutions for energy transition, helping industries adapt to new environmental requirements. Customers in sectors like oil and gas, power generation, and water treatment rely on these solutions to maintain their operations and comply with regulations.
What management is betting on now
CECO's leadership is focused on leveraging its expertise in environmental solutions to capitalize on growing global demand for cleaner industrial operations. A key priority is expanding its offerings in the energy transition space, helping industries shift to more sustainable practices. They are also likely focused on integrating acquired businesses and driving operational efficiencies to improve profitability. The company aims to be a go-to partner for industries needing to meet stringent environmental regulations and improve their overall performance.
Price history
How the share price has moved
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Loading price history…
Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2024 Q3
$11.11M
FY2024 Q4
$-4.30M
FY2025 Q1
$-15.08M
FY2025 Q2
$-8.71M
FY2025 Q3
$11.02M
FY2025 Q4
$7.29M
FY2026 Q1
$-15.69M
FY2026 Q2
$-24.22M
Revenue
$284.96M
Net income
$-34.77M
Diluted EPS
-0.80
Operating cash flow
$-19.33M
Free cash flow
$-24.22M
Fetching…
Sources
Revenue
$205.92M
Net income
$-398.00K
Diluted EPS
-0.01
Operating cash flow
$-13.10M
Free cash flow
$-15.69M
Fetching…
Sources
Revenue
$214.69M
Net income
$3.06M
Diluted EPS
0.09
Operating cash flow
$9.96M
Free cash flow
$7.29M
Fetching…
Sources
Revenue
$197.60M
Net income
$1.50M
Diluted EPS
0.04
Operating cash flow
$15.26M
Free cash flow
$11.02M
Fetching…
Sources
Revenue
$185.39M
Net income
$9.51M
Diluted EPS
0.26
Operating cash flow
$-7.67M
Free cash flow
$-8.71M
Fetching…
Sources
Revenue
$176.70M
Net income
$35.98M
Diluted EPS
0.98
Operating cash flow
$-11.70M
Free cash flow
$-15.08M
Fetching…
Sources
Revenue
$158.57M
Net income
$4.88M
Diluted EPS
0.14
Operating cash flow
$1.83M
Free cash flow
$-4.30M
Fetching…
Sources
Revenue
$135.51M
Net income
$2.09M
Diluted EPS
0.06
Operating cash flow
$15.11M
Free cash flow
$11.11M
Fetching…
Sources
Is it cheap or expensive?
Fair value $-7.79 vs current price $37.66
Wall Street consensus is the average analyst price target: $109.00 (-1,499.9% lower than our fair-value estimate).
Our most-likely fair value is $-7.79 a share — about 120.7% below today's price of $37.66, so the stock currently looks expensive (overvalued).
Is it drowning in debt?
Distressed
Net debt $710.8M. Interest coverage 2.5x.
Net debt
$710.76M
Interest coverage
2.47x
CECO Environmental Corp.'s profit covers its interest bill about 2.5 times over. which is weaker than most peers shown here.
Distressed
Worse cushion
Baseline
Better cushion
CECO
BASELINE
CECO Environmental Corp.
Total debt $771.83M Interest coverage 2.47x This is the baseline the peer rows are being compared against.
Total debt $1.06B Interest coverage 7.94x +221% vs CECO Carries about 3.2x more debt cushion than CECO.
Total debt $1.38B Interest coverage 16.41x +563% vs CECO Carries about 6.6x more debt cushion than CECO.
Total debt $548.40M Interest coverage 10.09x +308% vs CECO Carries about 4.1x more debt cushion than CECO.
Total debt $150.66M Interest coverage 9.89x +300% vs CECO Carries about 4.0x more debt cushion than CECO.
Total debt $22.82M Interest coverage 35.80x +1,348% vs CECO Carries about 14.5x more debt cushion than CECO.
What you should know
The case for and against CECO
2 Rewards
3 Risks
Rewards
-
Revenue grew 16.6% last year.
-
Free cash flow was positive in 9/10 years.
Risks
-
Net debt grew 167.4% over 3 years.
-
Return on equity was -2.4% last year — the company lost money on shareholders' equity.
-
Operating margin compressed from 6.6% to 4.9% over 3 years.
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
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Forward P/E
11.93x
P/B
1.06x
P/S
2.44x
EV/EBITDA
37.80x
PEG ratio
1.88x
Profitability
How much profit each dollar creates
Gross margin
32.1%
Operating margin
4.9%
Net margin
-3.4%
ROE
-2.4%
ROA
1.5%
Health
Liquidity and balance-sheet strength
Debt / equity
0.37x
Current ratio
1.50x
Quick ratio
1.01x
Total debt
$771.83M
Total cash
$61.07M
Growth
How the business has been compounding
Revenue TTM
$903.17M
Revenue 5Y CAGR
24.3%
EPS TTM
-0.77
EPS 5Y CAGR
39.9%
Cash flow
How much cash the business throws off
Operating CF TTM
$-7.20M
Free CF TTM
$-5.48M
FCF margin
-0.6%
Dividend
Shareholder payout
Yield
0.0%
Payout ratio
0.0%
Last ex-div date
2017-09-14