Ceco Environmental Corp

CECO

Industrial & Commercial Fans & Blowers & Air Purifing Equip

Mkt Cap

$890.3M

PE

71.56

Debt

$146.2M

Cash

$46.56M

EV

$990M

FCF

$48.91M

Market Cap

$890.3M

P/E Ratio

71.56

Debt

$146.2M

Cash

$46.56M

EV

$990M

FCF

$48.91M

Charts data: {"Earnings":[{"time":"2014-12-30","value":13077000},{"time":"2015-12-30","value":-5734000},{"time":"2016-12-30","value":-38254000},{"time":"2017-12-30","value":-3029000},{"time":"2018-12-30","value":-7121000},{"time":"2019-12-30","value":17707000},{"time":"2020-12-30","value":8172000},{"time":"2021-12-30","value":1426000},{"time":"2022-12-30","value":17417000},{"time":"2023-12-30","value":12911000}],"Sales":[{"time":"2014-12-30","value":263217000},{"time":"2015-12-30","value":367422000},{"time":"2016-12-30","value":417011000},{"time":"2017-12-30","value":345051000},{"time":"2018-12-30","value":337339000},{"time":"2019-12-30","value":341869000},{"time":"2020-12-30","value":316011000},{"time":"2021-12-30","value":324140000},{"time":"2022-12-30","value":422627000},{"time":"2023-12-30","value":544845000}],"Net Margins":[{"time":"2014-12-30","value":0.04968144154822827},{"time":"2015-12-30","value":-0.015606033389399655},{"time":"2016-12-30","value":-0.09173379119495649},{"time":"2017-12-30","value":-0.008778412466562914},{"time":"2018-12-30","value":-0.021109329191110426},{"time":"2019-12-30","value":0.05179469328894986},{"time":"2020-12-30","value":0.02585985930869495},{"time":"2021-12-30","value":0.004399333621274757},{"time":"2022-12-30","value":0.04121128086941913},{"time":"2023-12-30","value":0.023696647670438383}],"Assets":[{"time":"2014-12-30","value":414365000},{"time":"2015-12-30","value":598819000},{"time":"2016-12-30","value":498634000},{"time":"2017-12-30","value":438549000},{"time":"2018-12-30","value":392582000},{"time":"2019-12-30","value":408637000},{"time":"2020-12-30","value":419314000},{"time":"2021-12-30","value":416197000},{"time":"2022-12-30","value":504721000},{"time":"2023-12-30","value":600291000}],"Stockholders Equity":[{"time":"2014-12-30","value":181224000},{"time":"2015-12-30","value":245021000},{"time":"2016-12-30","value":190082000},{"time":"2017-12-30","value":186569000},{"time":"2018-12-30","value":178560000},{"time":"2019-12-30","value":193017000},{"time":"2020-12-30","value":203611000},{"time":"2021-12-30","value":205957000},{"time":"2022-12-30","value":218148000},{"time":"2023-12-30","value":237491000}],"ROE":[{"time":"2014-12-30","value":0.07215931664680175},{"time":"2015-12-30","value":-0.023402075740446737},{"time":"2016-12-30","value":-0.20124998684778148},{"time":"2017-12-30","value":-0.01623528024484239},{"time":"2018-12-30","value":-0.039880152329749105},{"time":"2019-12-30","value":0.09173803343746924},{"time":"2020-12-30","value":0.04013535614480553},{"time":"2021-12-30","value":0.006923775351165534},{"time":"2022-12-30","value":0.07984029191191301},{"time":"2023-12-30","value":0.05436416537889857}],"ROA":[{"time":"2014-12-30","value":0.052279994690671266},{"time":"2015-12-30","value":0.008264600822619188},{"time":"2016-12-30","value":-0.05126405339387206},{"time":"2017-12-30","value":0.01829670116680234},{"time":"2018-12-30","value":0.02547747986407935},{"time":"2019-12-30","value":0.04402440307656918},{"time":"2020-12-30","value":0.031828176497803555},{"time":"2021-12-30","value":0.023683496036732605},{"time":"2022-12-30","value":0.0469348412291147},{"time":"2023-12-30","value":0.057587070270918604}]}

CECO Environmental Corp. provides critical solutions in industrial air quality, industrial water treatment, and energy transition solutions worldwide. The company operates in two segments: Engineered Systems Segment and Industrial Process Solutions Segment. The company engineers, designs, manufactures, and installs non-metallic expansion joints and flow control products, including rubber expansion joints, ducting expansion joints, and industrial pinch and duck bill valves; membrane-based industrial water and wastewater treatment systems; and provides dust and fume extraction solutions and water and wastewater treatment solutions, as well as consultation services. It offers engineered and configured products and solutions, including dampers and diverters, expansion joints, selective catalytic reduction systems, severe-service and industrial cyclones, dust collectors, thermal oxidizers, filtration systems, wet and dry scrubbers, separators and coalescers, water treatment packages, metallic and non-metallic pumps, industrial silencers, and fluid handling equipment, as well as plant engineering services and engineered design build fabrication. The company markets its products and services to natural gas processors, transmission and distribution companies, refineries, power generators, industrial manufacturing, engineering and construction companies, semiconductor manufacturers, compressor manufacturers, beverage can manufacturers, metals and minerals, and electric vehicle producer companies. CECO Environmental Corp. was founded in 1869 and is headquartered in Dallas, Texas.

Sector

10-Q
9/30/23
10-Q
6/30/23
10-Q
3/31/23
10-K
12/31/22
10-Q
9/30/22
10-Q
6/30/22
10-Q
3/31/22
10-K
12/31/21
10-Q
9/30/21
10-Q
6/30/21
10-Q
3/31/21
10-K
12/31/20
10-Q
9/30/20
10-Q
6/30/20
10-Q
3/31/20
10-K
12/31/19
10-Q
9/30/19
10-Q
6/30/19
10-Q
3/31/19
10-K
12/31/18
10-Q
9/30/18
10-Q
6/30/18
10-Q
3/31/18
10-K
12/31/17

DCF

Discounted Cash Flow Valuation of Ceco Environmental Corp

Calculate

Growth Years

Growth

Start

End

Discount

Start

End

Multiple

g\r	+10%	+11%	+12%	+13%	+14%
0%	10	9	8	8	7
+1%	11	10	9	8	8
+2%	13	11	10	9	8
+3%	14	13	11	10	9
+4%	17	14	12	11	10

Years	0	1	2	3	4	5	6	7	8	9	10	TV
FCF	$48.91M	$44.43M	$40.36M	$36.67M	$33.32M	$30.27M	$27.5M	$24.98M	$22.7M	$20.62M	$18.73M	$187.3M
DCF		$38.63M	$30.52M	$24.11M	$19.05M	$15.05M	$11.89M	$9.391M	$7.419M	$5.861M	$4.63M	$46.3M
Value	$212.9M

Chart P/E ratio

In the chart Earnings are multiplied by this value.

Earnings Growth 5%

Earnings Stability -46%

Competitiveness and MOAT

High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.

The Net Margin is too low to guarantee profitability in case of higher costs or higher interest rates. Furthermore lower margins cause higher earnings’ volatility.

Over time the ROA has been increasing indicating a higher marginal ROA with respect to the calculated one, giving a good sign for continued growth.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Net Margin	-1.6%	-9.2%	-0.88%	-2.1%	5.2%	2.6%	0.44%	4.1%	2.4%	1.1%
ROA	0.83%	-5.1%	1.8%	2.5%	4.4%	3.2%	2.4%	4.7%	5.8%	6.2%
ROE	-2.3%	-20%	-1.6%	-4%	9.2%	4%	0.69%	8%	5.4%	5.3%

What is the average Net Margin?

The average Net Margin over the past 5 years is +2.1%.

What is the trend of Net Margin?

The trend of Net Margin over the past 5 years is +0.49%.

What is the average Return on Assets (ROA)?

The average ROA over the past 5 years is +3.83%.

What is the trend of Return on Assets (ROA)?

The trend of ROA over the past 5 years is +0.46%.

What is the average Return on Equity (ROE)?

The average ROE over the past 5 years is +3.89%.

What is the trend of Return on Equity (ROE)?

The trend of ROE over the past 5 years is +1.15%.

Safety & Stabiliy

Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.

Under the assumption that FCF does not diminish and debt does not increase, the current years to repay the debt are acceptable.

The Graham’s stability indicate a relevant drawdown, consider checking when it has occured and why.

Years	12-2015	12-2016	12-2017	12-2018	12-2019	12-2020	12-2021	12-2022	12-2023	TTM
Debt FCF	16.58	1.93	22.76	4.04	14.87	159.12	6.18	4.37	4.07	2.99
Debt Equity	0.80	0.69	0.68	0.43	0.35	0.37	0.32	0.53	0.62	0.62
MIN
Graham Stability	-	-	-	-	-	100%	23%	100%	100%	23%

What is the Debt/FCF?

The Debt/FCF trailing twelve month is 2.99.

What is the trend of Debt/FCF?

The trend of Debt/FCF over the past 5 years is -5.26.

What is the Graham’s Stability?

Graham’s Stability measure stands at 0.23.

Growth

Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.

Earnings growth has been increasing in past years.

Years	12-2016	12-2018	12-2020	12-2022	Trend
Revenue	3.9%	10%	20%	29%	0.71%
Net Income	-	-	16%	-26%	130%
Stockholders Equity	3.2%	5.9%	5.3%	8.9%	-0.076%
FCF	-8.7%	14%	320%	38%	56%

What is the 5 year Revenue CAGR?

The Revenue CAGR over the past 5 years is +10.06%.

What is the trend of Revenue growth?

The trend of Revenue growth rate over the past 5 years is +0.71%.

What is the 5 year Earnings CAGR?

The Earnings CAGR over the past 5 years is -.

What is the trend of Earnings growth?

The trend of Earnings growth rate over the past 5 years is +128.79%.

What is the 5 year Equity CAGR?

The Equity CAGR over the past 5 years is +5.87%.

What is the trend of Equity growth?

The trend of Equity growth rate over the past 5 years is -0.08%.

What is the 5 year FCF CAGR?

The FCF CAGR over the past 5 years is +13.97%.

What is the trend of FCF growth?

The trend of FCF growth rate over the past 5 years is +56.44%.