Should I Buy Comfort Systems USA (FIX)? Finance YouTuber Analysis

The YouTuber recommends Comfort Systems USA due to its significant growth in data center revenue, which now accounts for over half of its total. The company has a record $12.4 billion backlog, nearly doubled year-over-year, and boasts strong financials with 62% return on invested capital and effectively zero debt, indicating software-like economics for a mechanical contractor.

“Data center customers went from a third of revenue two years ago to over half of their revenue this past quarter. And fix ended at a record $12.4 billion backlog that nearly doubled year over year.”

The YouTuber notes Comfort Systems' spectacular results, with 22% growth and net income doubling from $130 million to $240 million, driven by increased margins due to high demand for data center services. It trades at 30 times earnings, in line with other AI stocks.

“Ha crecido un o sigue creciendo al 22% y sobre todo la rentabilidad, el net incom ha pasado de 130 m000ones a 240 m000ones. Porque lo que está sucediendo en estas empresas que de repente han encontrado este boom y donde hay mucha más demanda que oferta es que los márgenes están subiendo.”

The YouTuber highlights Comfort Systems USA as a serial acquirer in the mechanical, electrical, and plumbing building services sector with a history of strong capital allocation and shareholder value creation. He notes its consistently growing construction backlog, 25 consecutive years of positive free cash flow, a strong balance sheet with low debt, and a dividend that has increased for 12 consecutive years. Despite trading above its historical price-to-free cash flow average, he argues the current 22.6 multiple is fair given its accelerating growth, with free cash flow compounding at 38.6% annually over the past decade.

“a 22 price to free cash flow for a business that seems to have a very strong balance sheet a good management team a history of doing great Acquisitions and is seeing very strong growth I don't think is that insane and I do actually think that this is quite a fair price for such a highquality business”