Comfort Systems is Monday's IBD Stock Of The Day as the HVAC contractor's backlog surges on demand from AI data centers. After leaping on earnings, FIX stock has just formed a bullish three-weeks-tight pattern that may provide a near-term buying opportunity.
Comfort Systems, part of the S&P MidCap 400 index, is the top-rated company in IBD's Building-A/C & Heating Products industry group. FIX stock has an unbeatable 99 IBD Composite Rating, based on both fundamental and technical factors, according to IBD Stock Checkup.
Comfort Systems Has 'Eye-Popping' Margins
Houston-based Comfort Systems designs, installs and services mechanical, electrical and plumbing systems for commercial and industrial customers. It's known for its ability to handle big, complex projects, including modular construction — which involves fabricating systems away from construction sites, then transporting them for installation.
Revenue grew 20% to $2.17 billion in the second quarter, including 18.6% in same-store activity and 1.5% related to its ongoing acquisition strategy. Earnings per share surged 75% to $6.53. That puts EPS growth at 49%, 60%, 77% and 75% over the past four quarters.
Tech-sector revenue jumped to 40% from 31% a year ago, fueled by data-center construction projects.
On the July 25 second-quarter earnings call, CFO William George highlighted "pretty eye-popping" margins. "We think our guys are the best in the world at doing it. Our customers want it. They're willing to pay for it."
Bookings Backlog Creates Visibility
CEO Brian Lane told analysts that Comfort Systems has a full plate in 2025 and a backlog that is stretching into the future. "Customers are looking out (to) 2026, 2027. It's a great time to be in the construction business, buddy."
The pipeline for chip fabrication and pharma projects also looks strong, the company said.
The overall backlog rose to $8.12 billion, up 18% from Q1 and 41% from a year ago.
FIX Stock's Shelf Pattern
FIX inched up less than 0.1% to 692.58 in Monday afternoon stock market action. After blowing past Q2 estimates, FIX stock vaulted 22.4% to 688.74 on July 25.
The peak came on July 31, when FIX rose as high as 718.40. Since then, shares have traded in a tight range, yielding a three-weeks-tight pattern. That happens when a stock finishes up or down no more than 1.5% in consecutive weeks.
Such a pattern after a breakout has the look of a shelf and is often a setup for a move higher. A break above the 718.40 buy point can be a chance to add shares or, for more aggressive swing traders, a chance to establish a new position. Aggressive investors could also plot an early entry at 708.73.
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