CECO Environmental Corp.

CECO Environmental raised its 2026 revenue guidance to $1.300-$1.375 billion from $1.275-$1.375 billion, with adjusted EBITDA projected at $200-$225 million and free cash flow conversion of at least 55% of adjusted EBITDA. The increase follows persistent strength in the company's Engineered Systems segment, where second-quarter 2026 revenues rose 35.2% year over year to $173.7 million, or 60.9% of total company revenues, and first-half 2026 segment revenues climbed 30.3% year over year. Orders for the Engineered Systems segment surged 200% to $672.1 million in the second quarter of 2026, including organic growth of 173.8%, driven by demand for CECO's energy and power technologies and by expansion in midstream and downstream markets. The company's backlog mixes fixed-price contracts recognized on a cost-to-cost basis, with long-cycle power generation and gas infrastructure projects making up a substantial portion while industrial process solutions add diversification. Among peers, Tetra Tech's Government Services Group net revenues rose 7% year over year in the third quarter of fiscal 2026, and Donaldson's Industrial Solutions segment revenues rose 7.7% year over year in the fourth quarter of fiscal 2026, helped by its Facet acquisition.

CECO Environmental Corp has raised its full-year 2026 guidance following the completion of its $2.2 billion acquisition of Thermon Group Holdings, a leading industrial process heating company. The company now projects revenue of $1.3 billion to $1.375 billion, up from its previous range of $1.275 billion to $1.375 billion, and adjusted EBITDA of $200 million to $225 million, compared with the earlier $195 million to $225 million. Management also expects free cash flow conversion of at least 55% of adjusted EBITDA. Early integration synergies are outpacing targets, and the company's sales pipeline has expanded beyond $8.5 billion, though bears caution that this pipeline represents potential, not contracted, revenue. The deal has increased CECO's debt and operational complexity, but hedge fund holdings rose to 41 in the second quarter from 37 in the first, with FMR as the largest institutional investor.

ABM Industries will announce its earnings results this Tuesday before market hours, with analysts expecting revenue to grow 4% year on year, a slowdown from the 6.2% increase recorded in the same quarter last year. The facility services provider beat analysts' revenue expectations last quarter, reporting revenues of $2.29 billion, up 8.4% year on year, and also impressed with a strong beat on organic revenue estimates and a narrow beat on full-year EPS guidance. Analysts have generally reconfirmed their estimates over the last 30 days, and ABM rarely misses Wall Street's revenue expectations. In the industrial and environmental services segment, peers CECO Environmental and Vestis have already reported their Q2 results, with CECO delivering year-on-year revenue growth of 53.7% and Vestis reporting a decline of 1.8%. ABM's shares are down 1.8% over the last month, and the average analyst price target is $52.43, compared to the current share price of $47.06.

CECO Environmental reported record second-quarter 2026 results, including $799 million in orders and revenue of $285 million, and raised its full-year outlook. Adjusted EBITDA rose 73% to approximately $40 million, with margins expanding about 150 basis points to 14.1%, the company's first quarter with mid-teens EBITDA margins. The company's backlog exceeded $1.8 billion, up 164% year-over-year, and its sales pipeline now exceeds $8.5 billion. CECO also said it has captured approximately $13 million of annualized net adjusted EBITDA savings in the first 60 days following its June 1 acquisition of Thermon, representing about one-third of its $40 million synergy target. The company now expects full-year revenue between $1.3 billion and $1.375 billion and adjusted EBITDA between $200 million and $225 million.

CECO Environmental reported record second-quarter orders of $798.5 million, up 191 percent, and a backlog above $1.8 billion, and raised its full-year 2026 consolidated outlook. Revenue reached $285.0 million, a 54 percent increase, while non-GAAP net income surged 147 percent to $21.5 million, or $0.47 per diluted share. The company closed its acquisition of Thermon on June 1, 2026, and said integration synergies are ahead of plan. CECO now expects full-year revenue between $1.300 billion and $1.375 billion and adjusted EBITDA between $200 million and $225 million, with free cash flow conversion of at least 55 percent of adjusted EBITDA.

Zacks Investment Research has identified Jabil Inc., CECO Environmental Corp., and Klarna Group plc as the three best earnings acceleration stocks to buy for the second half of 2026, based on a screen of accelerating quarter-over-quarter EPS growth rates. The screen required that the last two quarter-over-quarter percentage EPS growth rates exceed the previous periods' growth rates, and that the projected EPS growth rate for the upcoming quarter exceeds that of prior periods, narrowing a universe of roughly 7,735 stocks down to just three. Jabil, a global provider of engineering, manufacturing, and supply-chain solutions, carries a Zacks Rank #1 (Strong Buy) and an expected current-year earnings growth rate of 30.1%. CECO Environmental, which provides industrial air quality, water treatment, and energy transition solutions, also holds a Zacks Rank #1 and has an expected current-year earnings growth rate of 120.2%. Klarna Group, a digital bank and flexible payments provider, is rated Zacks Rank #1 with an expected current-year earnings growth rate of 105.1%.

StockStory identifies two profitable stocks with exciting potential and one facing headwinds. CECO Environmental, with a trailing 12-month GAAP operating margin of 5.7%, reported annual revenue growth of 19.9% over the past two years and projected revenue growth of 83% for the next 12 months, while share repurchases helped drive annual earnings per share growth of 23.6%. Riley Exploration Permian, operating in the Permian Basin, posted a trailing 12-month GAAP operating margin of 31.6%, annual revenue growth of 30.8% over the past eight years, a gross margin of 76.6%, and a free cash flow margin of 17.3%. In contrast, Live Nation, owner of Ticketmaster, recorded a trailing 12-month GAAP operating margin of 3%, below-average annual revenue increases of 4.6% for the last two years, and a projected 1.5 percentage point decline in its free cash flow margin next year, with shares trading at 127.9x forward P/E.

Pitney Bowes reported first-quarter revenues of $477.4 million, down 3.2% year on year, making it the weakest performer among the eight industrial and environmental services stocks tracked. The result was in line with analysts' expectations, but the company significantly missed full-year EPS guidance estimates while full-year revenue guidance met expectations. In contrast, CECO Environmental delivered the strongest quarter with revenues of $205.9 million, up 16.5% year on year and beating estimates by 4.1%, and its full-year revenue guidance topped expectations. Other tracked companies included Vestis, Tetra Tech, and Driven Brands, with the group as a whole beating revenue estimates by 1.9% and next-quarter revenue guidance coming in 2.1% above consensus. Share prices across the group have risen 11.1% on average since the latest earnings results.

MillerKnoll reported first-quarter revenues of $926.6 million, up 5.8% year on year but missing analyst expectations by 1.6%, making it the weakest performer in a group of 20 tracked business services and supplies stocks. The company also significantly missed earnings per share estimates and provided the weakest guidance update of the entire group. In contrast, Brady delivered the strongest results with revenues of $435.2 million, a 13.8% increase that beat expectations by 7.2%, while CECO Environmental posted a 16.5% revenue gain to $205.9 million and raised its full-year outlook. Overall, the sector saw revenues beat consensus estimates by 2.4% and share prices rise an average of 10.6% since the latest earnings reports.