📊 CECO Key Takeaways
Is Ceco Environmental Corp. (CECO) a Good Investment?
CECO is experiencing strong revenue growth of 38.8% YoY, but this growth masks serious operational deterioration: the company is unprofitable (-0.2% net margin) with deeply negative operating cash flow (-$13.1M) and a critical interest coverage ratio of 0.4x, indicating inability to service debt from operations. The combination of negative profitability, cash burn, and financial stress despite significant scale suggests fundamental operational challenges rather than a healthy scaling business.
CECO Environmental shows strong top-line momentum and solid operating profitability, with revenue up 38.8% and operating margin at 13.7%, indicating healthy demand and reasonable execution. However, growth quality is mixed because net income declined year over year, operating cash flow was very weak relative to earnings, and free cash flow was negative, which tempers the otherwise solid profitability profile. The balance sheet is acceptable but not especially strong given moderate leverage, limited cash, and only middling interest coverage.
Ceco Environmental Corp. Key Strengths (CECO)
- Strong top-line growth of 38.8% YoY demonstrating market demand
- Reasonable gross margins of 31% indicating viable core product/service economics
- Moderate leverage with debt-to-equity ratio of 0.81x and adequate cash position of $45.4M
- Revenue growth is strong at 38.8% year over year, showing meaningful business expansion
- Profitability is solid with 34.8% gross margin, 13.7% operating margin, and 15.8% ROE
- Liquidity is adequate with a 1.34x current ratio and 1.16x quick ratio, reducing near-term balance sheet pressure
CECO Stock Risks: Ceco Environmental Corp. Investment Risks
- Company is cash flow negative (-$15.7M free cash flow, -7.6% FCF margin) while scaling revenue, indicating operational inefficiency or margin compression
- Interest coverage ratio of 0.4x signals inability to cover debt service from operations, creating significant refinancing and default risk
- Operating margins have collapsed to 0.9% despite 31% gross margins, suggesting execution problems or structural margin pressures in the business model
- Operating cash flow of $5.86M is very low relative to $50.05M net income, indicating weak cash conversion
- Free cash flow is negative after capital spending, which raises questions about the quality and sustainability of earnings growth
- Leverage is moderate with $212.44M long-term debt, 0.67x debt-to-equity, and only 5.1x interest coverage
Key Metrics to Watch
- Operating cash flow trajectory and path to positive free cash flow
- Operating margin expansion to sustainable levels above 5%
- Interest coverage ratio improvement toward minimum 1.5x threshold
- Debt refinancing events and covenant compliance status
- Revenue growth sustainability and customer concentration analysis
- Operating cash flow and free cash flow conversion versus net income
- Interest coverage and net debt trends as growth continues
Ceco Environmental Corp. (CECO) Financial Metrics & Key Ratios
💡 AI Analyst Insight
Ceco Environmental Corp. presents a mixed fundamental picture. Review the detailed metrics above to form your own investment thesis.
CECO Profit Margin, ROE & Profitability Analysis
CECO vs Industrial Sector: How Ceco Environmental Corp. Compares
How Ceco Environmental Corp. compares to Industrial sector averages
Sector benchmarks are approximate industry averages. Actual sector performance may vary.
Is Ceco Environmental Corp. Stock Overvalued? CECO Valuation Analysis 2026
Based on fundamental analysis, Ceco Environmental Corp. shows some fundamental concerns relative to the Industrial sector in 2026.
Note: This is a fundamental analysis based on SEC filings. For P/E ratio, price targets, and market-based valuation, consult financial data providers. This is not investment advice.
Ceco Environmental Corp. Balance Sheet: CECO Debt, Cash & Liquidity
CECO Revenue & Earnings Growth: 5-Year Financial Trend
5-Year Trend Summary: Ceco Environmental Corp.'s revenue has grown significantly by 127% over the 5-year period, indicating strong business expansion. The most recent EPS of $0.37 reflects profitable operations.
CECO Revenue Growth, EPS Growth & YoY Performance
CECO Quarterly Earnings & Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q3 2025 | $135.5M | $1.5M | $0.04 |
| Q2 2025 | $137.5M | $4.5M | $0.12 |
| Q1 2025 | $126.3M | -$398.0K | $-0.01 |
| Q3 2024 | $135.5M | $2.1M | $0.06 |
| Q2 2024 | $129.2M | $3.7M | $0.11 |
| Q1 2024 | $112.6M | $1.5M | $0.04 |
| Q3 2023 | $108.4M | $1.9M | $0.06 |
| Q2 2023 | $105.4M | $3.7M | $0.11 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
Ceco Environmental Corp. Dividends, Buybacks & Capital Allocation
CECO SEC Filings: Latest 10-K & 10-Q Analysis
Access official SEC EDGAR filings for Ceco Environmental Corp. (CIK: 0000003197)
📋 Recent SEC Filings
❓ Frequently Asked Questions about CECO
What is the AI rating for CECO?
Ceco Environmental Corp. (CECO) has a Combined AI Grade of C from Claude (C) and ChatGPT (B) with 79% combined confidence, based on fundamental analysis of SEC EDGAR filings.
What are CECO's key strengths?
Claude: Strong top-line growth of 38.8% YoY demonstrating market demand. Reasonable gross margins of 31% indicating viable core product/service economics. ChatGPT: Revenue growth is strong at 38.8% year over year, showing meaningful business expansion. Profitability is solid with 34.8% gross margin, 13.7% operating margin, and 15.8% ROE.
What are the risks of investing in CECO?
Claude: Company is cash flow negative (-$15.7M free cash flow, -7.6% FCF margin) while scaling revenue, indicating operational inefficiency or margin compression. Interest coverage ratio of 0.4x signals inability to cover debt service from operations, creating significant refinancing and default risk. ChatGPT: Operating cash flow of $5.86M is very low relative to $50.05M net income, indicating weak cash conversion. Free cash flow is negative after capital spending, which raises questions about the quality and sustainability of earnings growth.
What is CECO's revenue and growth?
Ceco Environmental Corp. reported revenue of $205.9M.
Does CECO pay dividends?
Ceco Environmental Corp. pays dividends, with $0.0M distributed to shareholders in the trailing twelve months.
Where can I find CECO SEC filings?
Official SEC filings for Ceco Environmental Corp. (CIK: 0000003197) including 10-K, 10-Q, and 8-K reports are available on SEC EDGAR.
What is CECO's EPS?
Ceco Environmental Corp. has a diluted EPS of $-0.01.
How is the AI analysis conducted?
Two independent AI systems — Claude (Anthropic) and ChatGPT (OpenAI) — analyze SEC EDGAR filings including 10-K annual reports and 10-Q quarterly reports. Each AI evaluates financial health, profitability ratios, balance sheet strength, and growth metrics. The combined grade reflects both perspectives for balanced insights.
What is CECO's fundamental grade?
Based on our AI fundamental analysis in June 2026, Ceco Environmental Corp. has a C grade with 79% confidence. Review the strengths and risks sections above for full context. This is not investment advice.
Is CECO stock overvalued or undervalued?
Valuation metrics for CECO: ROE of -0.1% (sector avg: 15%), net margin of -0.2% (sector avg: 10%). Compare these metrics with sector averages to assess valuation.
What is CECO's AI grade for 2026?
Our dual AI analysis gives Ceco Environmental Corp. a combined C grade for 2026. Revenue is data pending, with profitability at or below sector average. Always conduct your own research.
What is CECO's free cash flow?
Ceco Environmental Corp.'s operating cash flow is $-13.1M, with capital expenditures of $2.6M. FCF margin is -7.6%.
How does CECO compare to other Industrial stocks?
Vs Industrial sector averages: Net margin -0.2% (avg: 10%), ROE -0.1% (avg: 15%), current ratio 1.33 (avg: 1.8).