FirstService (NASDAQ:FSV) Releases Earnings Results, Beats Estimates By $0.04 EPS

FirstService (NASDAQ:FSV) (TSE:FSV) issued its quarterly earnings data on Thursday. The financial services provider reported $1.75 EPS for the quarter, topping the consensus estimate of $1.71 by $0.04, Briefing.com reports. The company had revenue of $1.44 billion during the quarter, compared to analyst estimates of $1.44 billion. FirstService had a return on equity of 17.53% and a net margin of 2.88%.FirstService’s revenue was up 2.4% compared to the same quarter last year. During the same quarter in the previous year, the company posted $1.71 earnings per share.

Here are the key takeaways from FirstService’s conference call:

• Q2 results modestly beat expectations, with revenue up 2%, adjusted EBITDA up 3% to $161.7 million, and adjusted EPS up 2% year over year. Management said performance was better than expected, especially in the Brands division.
• Restoration momentum improved materially late in the quarter, as the company signed multiple large-loss projects and rebuilt its backlog to historically healthy levels. Management expects about 5% year-over-year growth in restoration in the back half, with more upside tied to storm activity and 2027 conversion.
• Roofing remains the weak spot, with Q2 revenue down 6% reported and 10% organically amid a stubbornly weak and highly competitive market. The company also said some large reroof projects were delayed, although they remain in backlog.
• Century Fire continued to outperform, posting more than 10% revenue growth and improved backlog, and management expects another strong 10%+ growth pace in Q3 and Q4. Recent acquisitions in Florida and Texas should expand service capabilities.
• Capital allocation remains flexible, with the company buying back 1.8 million shares in Q2 for about $250 million while still keeping leverage conservative at 1.8x net debt to EBITDA and over $800 million of liquidity. Management said it can continue repurchases and pursue tuck-in M&A in tandem, depending on opportunities.

FirstService Stock Up 4.8%

FSV stock opened at $137.46 on Friday. FirstService has a twelve month low of $119.41 and a twelve month high of $209.66. The company has a quick ratio of 1.66, a current ratio of 1.66 and a debt-to-equity ratio of 0.74. The stock has a market cap of $6.32 billion, a P/E ratio of 38.94, a PEG ratio of 3.96 and a beta of 0.94. The business’s 50-day moving average price is $139.47 and its 200-day moving average price is $145.39.

FirstService Announces Dividend

The business also recently disclosed a quarterly dividend, which was paid on Tuesday, July 7th. Stockholders of record on Tuesday, June 30th were paid a $0.305 dividend. The ex-dividend date of this dividend was Tuesday, June 30th. This represents a $1.22 annualized dividend and a dividend yield of 0.9%. FirstService’s dividend payout ratio (DPR) is 34.56%.

Analyst Upgrades and Downgrades

A number of equities research analysts have issued reports on FSV shares. Canadian Imperial Bank of Commerce restated an “outperform” rating and set a $175.00 price target on shares of FirstService in a research note on Friday. Scotiabank set a $170.00 price objective on shares of FirstService in a report on Friday. Loop Capital began coverage on shares of FirstService in a research report on Monday, May 4th. They set a “hold” rating and a $140.00 target price for the company. Wall Street Zen raised shares of FirstService from a “hold” rating to a “buy” rating in a report on Saturday, May 9th. Finally, TD increased their price target on shares of FirstService from $204.00 to $207.00 and gave the stock a “buy” rating in a research report on Tuesday, July 14th. Eight equities research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. Based on data from MarketBeat, the company currently has a consensus rating of “Moderate Buy” and a consensus target price of $184.20.

Institutional Investors Weigh In On FirstService

Several hedge funds and other institutional investors have recently added to or reduced their stakes in FSV. Public Sector Pension Investment Board boosted its position in shares of FirstService by 2.5% in the second quarter. Public Sector Pension Investment Board now owns 4,076 shares of the financial services provider’s stock worth $710,000 after purchasing an additional 100 shares during the period. Mariner LLC raised its position in shares of FirstService by 11.5% during the 3rd quarter. Mariner LLC now owns 3,606 shares of the financial services provider’s stock valued at $687,000 after purchasing an additional 371 shares during the period. Engineers Gate Manager LP bought a new stake in shares of FirstService during the 2nd quarter valued at $669,000. Two Sigma Investments LP lifted its stake in shares of FirstService by 13.1% during the 3rd quarter. Two Sigma Investments LP now owns 3,459 shares of the financial services provider’s stock valued at $659,000 after buying an additional 400 shares in the last quarter. Finally, Vise Technologies Inc. purchased a new position in shares of FirstService during the 4th quarter valued at $420,000. 69.35% of the stock is owned by hedge funds and other institutional investors.

About FirstService

FirstService Corporation, founded in 1989 and headquartered in Toronto, Ontario, is a leading provider of property services in North America. The company operates through two principal segments—FirstService Residential and FirstService Brands—offering a broad range of services to residential, commercial and homeowner association clients.

FirstService Residential delivers community management, financial oversight and consulting services to thousands of residential communities across the United States and Canada.