FirstService (NASDAQ:FSV) Posts Quarterly Earnings Results, Beats Expectations 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, beating analysts’ consensus estimates of $1.71 by $0.04, Briefing.com reports. FirstService had a return on equity of 17.91% and a net margin of 2.92%.The business had revenue of $1.44 billion for the quarter, compared to analyst estimates of $1.44 billion. During the same quarter in the prior year, the firm posted $1.71 EPS. The firm’s revenue for the quarter was up 2.4% on a year-over-year basis.

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 Performance

NASDAQ:FSV traded up $6.78 during trading hours on Friday, hitting $137.92. 88,640 shares of the company traded hands, compared to its average volume of 215,519. The stock has a market capitalization of $6.34 billion, a price-to-earnings ratio of 38.99, a P/E/G ratio of 4.28 and a beta of 0.94. FirstService has a twelve month low of $119.41 and a twelve month high of $209.66. The firm has a 50-day moving average of $139.31 and a 200 day moving average of $145.45. The company has a current ratio of 1.66, a quick ratio of 1.66 and a debt-to-equity ratio of 0.74.

FirstService Announces Dividend

The business also recently announced a quarterly dividend, which was paid on Tuesday, July 7th. Investors of record on Tuesday, June 30th were given a dividend of $0.305 per share. The ex-dividend date of this dividend was Tuesday, June 30th. This represents a $1.22 dividend on an annualized basis and a yield of 0.9%. FirstService’s payout ratio is 34.46%.

Institutional Trading of FirstService

Several hedge funds and other institutional investors have recently bought and sold shares of the stock. The Manufacturers Life Insurance Company increased its stake in FirstService by 493.4% during the fourth quarter. The Manufacturers Life Insurance Company now owns 2,775,353 shares of the financial services provider’s stock valued at $432,173,000 after acquiring an additional 2,307,684 shares during the period. Wellington Management Group LLP lifted its position in shares of FirstService by 18,366.1% in the 4th quarter. Wellington Management Group LLP now owns 719,993 shares of the financial services provider’s stock worth $111,981,000 after acquiring an additional 716,094 shares during the period. Janus Henderson Group PLC lifted its position in shares of FirstService by 73.6% in the 4th quarter. Janus Henderson Group PLC now owns 1,367,564 shares of the financial services provider’s stock worth $212,698,000 after acquiring an additional 579,615 shares during the period. Orbis Allan Gray Ltd grew its holdings in shares of FirstService by 36.5% during the 4th quarter. Orbis Allan Gray Ltd now owns 1,984,677 shares of the financial services provider’s stock worth $308,677,000 after purchasing an additional 530,489 shares in the last quarter. Finally, BCV Asset Management Inc. acquired a new stake in shares of FirstService during the 4th quarter worth approximately $57,550,000. 69.35% of the stock is currently owned by institutional investors and hedge funds.

Analyst Upgrades and Downgrades

Several equities research analysts recently weighed in on the company. TD boosted their target price on FirstService from $204.00 to $207.00 and gave the stock a “buy” rating in a report on Tuesday, July 14th. Stifel Nicolaus dropped their price target on shares of FirstService from $215.00 to $200.00 and set a “buy” rating on the stock in a research report on Monday, April 27th. Deutsche Bank Aktiengesellschaft restated a “hold” rating on shares of FirstService in a research note on Friday. Scotiabank lowered their target price on shares of FirstService from $190.00 to $175.00 and set an “outperform” rating on the stock in a research note on Tuesday, June 30th. Finally, TD Securities reiterated a “buy” rating on shares of FirstService in a report on Friday. Eight equities research analysts have rated the stock with a Buy rating and four have issued a Hold rating to the company’s stock. According to data from MarketBeat, the company has an average rating of “Moderate Buy” and an average price target of $194.78.

FirstService Company Profile

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.