FirstService (NASDAQ:FSV) Issues Earnings Results

FirstService (NASDAQ:FSV) (TSE:FSV) released its quarterly earnings results on Thursday. The financial services provider reported $1.75 earnings per share for the quarter, topping the consensus estimate of $1.71 by $0.04, Briefing.com reports. The business had revenue of $1.44 billion for the quarter, compared to the consensus estimate of $1.44 billion. FirstService had a net margin of 2.92% and a return on equity of 17.91%. The company’s quarterly revenue was up 2.4% on a year-over-year basis. During the same period last year, the firm earned $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 Price Performance

Shares of FSV stock traded up $6.87 during mid-day trading on Friday, hitting $138.01. The company had a trading volume of 83,654 shares, compared to its average volume of 215,467. FirstService has a 52-week low of $119.41 and a 52-week high of $209.66. The stock’s 50 day moving average price is $139.31 and its 200-day moving average price is $145.45. The company has a debt-to-equity ratio of 0.74, a current ratio of 1.66 and a quick ratio of 1.66. The company has a market capitalization of $6.34 billion, a P/E ratio of 38.94, a P/E/G ratio of 4.28 and a beta of 0.94.

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 given a dividend of $0.305 per share. The ex-dividend date 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 presently 34.46%.

Institutional Trading of FirstService

A number of institutional investors and hedge funds have recently bought and sold shares of FSV. JPL Wealth Management LLC bought a new position in shares of FirstService during the 3rd quarter valued at about $26,000. Caitong International Asset Management Co. Ltd lifted its position in shares of FirstService by 88.0% in the fourth quarter. Caitong International Asset Management Co. Ltd now owns 173 shares of the financial services provider’s stock worth $27,000 after buying an additional 81 shares in the last quarter. Kestra Advisory Services LLC purchased a new stake in shares of FirstService in the fourth quarter worth about $34,000. Geneos Wealth Management Inc. boosted its stake in FirstService by 63.7% during the second quarter. Geneos Wealth Management Inc. now owns 203 shares of the financial services provider’s stock valued at $35,000 after buying an additional 79 shares during the last quarter. Finally, Strs Ohio bought a new position in FirstService during the first quarter valued at approximately $38,000. 69.35% of the stock is currently owned by institutional investors.

Wall Street Analysts Forecast Growth

A number of research analysts recently issued reports on the company. Scotiabank cut their price objective on FirstService from $190.00 to $175.00 and set an “outperform” rating for the company in a research note on Tuesday, June 30th. Deutsche Bank Aktiengesellschaft restated a “hold” rating on shares of FirstService in a research note on Friday. Wall Street Zen upgraded shares of FirstService from a “hold” rating to a “buy” rating in a research report on Saturday, May 9th. TD Securities reissued a “buy” rating on shares of FirstService in a research note on Friday. Finally, BMO Capital Markets set a $192.00 target price on shares of FirstService in a research note on Friday. Eight research analysts have rated the stock with a Buy rating and four have assigned a Hold rating to the company’s stock. According to data from MarketBeat.com, the stock presently has an average rating of “Moderate Buy” and a consensus price target of $194.78.

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.