QS Research · Michael Burry's Scion Capital analyst template · 2006
COMFORT SYSTEMS USA INC (FIX)
As of 2026-11-08 · 13/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -18% · upside +20%
The market is pricing FIX at 14.8x TTM EV/EBITDA and 21.8x TTM P/E on $2.26B EBITDA and $1.63B net income, not merely on the 50.9% drawdown; at today's 14.8x multiple, 14.8 x $2.26B EBITDA = $33.45B EV, plus $2.01B net cash = $35.46B equity, / 34.99M shares = about $1,013, or roughly 0% versus $1,017.50 [N15, N25, N5, N1, N29, N32]. The 12x downside (12 x $2.26B + $2.01B = $29.1B / 34.99M = about $832, -18%; EME's 11.3x gives about $787, -23%) and 18x upside (18 x $2.26B + $2.01B = $42.7B / 34.99M = about $1,220, +20%) bracket the price roughly 1:1, with the closest peers at 8.6x-11.6x EV/EBITDA [S1, N29]. The business is executing: Q3 2026 revenue rose 53.7% to $3.77B, EPS was $13.91, backlog was $17.81B up 90% y/y, and the balance sheet carries $2.01B net cash with a 6.9% FCF yield [S29, N25, N33]. But a 14.8x multiple versus 8.6x-11.6x closest named peers leaves no >30% base-case discount, so I call this a watch, not a long.
Key numbers
- Share price: $1,017.50
- Market cap: $35.60B
- Latest financial period: TTM to Sep 30, 2026
- Revenue (TTM): $12.54B
- EV / EBITDA (TTM): 14.8x
- P/E (TTM): 21.8x
- Price / book: 10.67x
The 15 boxes
- ✓ 1. Long-form business notes
Comfort Systems makes money as a mechanical and electrical contractor, mostly on project-based installation work (92.7% of revenue in 2025) for commercial, industrial and institutional buildings, with a smaller maintenance and service stream (7.3%). In 2025 it reported 73.3% mechanical and 26.7% electrical revenue; 63.2% came from installation in new facilities and 36.8% from renovation, expansion, maintenance, repair and replacement. Between 2020 and 2025 it got much larger and more new-construction-weighted: revenue rose from $2.86B to $9.10B, operating units from 37 to 50, and new-construction installation from 46.7% to 63.2% of revenue. The project base also scaled from 5,687 projects/$5.0B at December 31, 2020 to 8,427 projects/$24.17B at December 31, 2025.
- ✓ 2. Competitive advantage
The sources describe a highly fragmented MEP contracting industry of thousands of local and regional firms, where price, relationships, bonding access and scale decide awards; Comfort Systems claims an edge only from multi-location coverage, breadth of service and size versus small owner-operated rivals. The numbers back a real and widening margin advantage: gross margin rose from 17.9% (FY2022) to 24.2% (FY2025) and operating margin from 6.1% to 14.4%, with return on total equity of 41.6% in FY2025 on capex of just $154.9M against $1.19B operating cash flow. What the sources do not support is exclusivity: price alone wins smaller bids, one customer was 12.8% of 2025 revenue, and in-house service providers and larger competitors with more financial resources are named threats, so the advantage looks like scale and execution rather than a moat.
- ✓ 3. 10-Q takeaways
Q3 2026 revenue was $3.77 billion, up 53.7% y/y, with same-store revenue up 46.3%; Q3 gross margin was flat at 24.8% as a $15.5 million prior-year bankruptcy recovery did not repeat. Operating income was $624.6 million (16.6% of revenue) and net income was $489.0 million, or $13.91 per diluted share; backlog was $17.81 billion, up 90.0% y/y. The quarter produced $1.01 billion of operating cash flow, cash was $2.158 billion at September 30, 2026, and the company repurchased 0.2 million shares for $349.1 million including excise tax in the nine-month period. Outlook in both the 10-Q and Q3 release is qualitative only, with no numeric revenue or EPS guidance.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ✓ 11. Impression of the shareholder letter
Filled; members read this box.
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
Sign in with a QuantSignals Premium or Gold plan to read every box: each point linked to the SEC filing it came from, the bull and bear case, and the comparables. QS Research powers the signals behind FST, our autonomous trading agent.