It has the same 5-year annualized return as NVIDIA (NASDAQ:) and has beaten all of the other Magnificent 7 stocks.
No stock had a better day on Friday than Comfort Systems USA Inc (NYSE:), a company that provides mechanical, electrical and HVAC services for commercial and industrial clients.
Comfort Systems posted blowout second quarter earnings results, got some massive upgrades from Wall Street analysts, and saw its stock price surge 22% on the day.
In the second quarter, revenue skyrocketed by 20% year-over-year to $2.17 billion, which surpassed Wall Street estimates of $1.97 billion.
Net income spiked 72% to $230.8 million while earnings surged 76% to $6.53 per share. That destroyed the Street’s consensus estimate of $4.78 per share. The operating margin surged to 13.8%, up from 10.2% in the same quarter a year ago.
“For the first half of 2025, our per share earnings have grown by over 75% as compared to the record results in the same period of 2024. This quarter, we are also happy to report strong operating cash flow of over $250 million,” Brian Lane, Comfort Systems USA’s president and CEO, said.
Specifically, the operating cash flow was $252.5 million up from $189.9 million in the second quarter of 2024. This helped Comfort Systems boost its dividend to 50 cents per share, up from 45 cents per share.
Wall Street Is Extremely Bullish
Wall Street analysts were impressed by the report – and not just the growth and strong financials, but also the outlook.
Comfort Systems had a backlog of $8.12 billion as of June 30, up significantly from $6.89 billion as of March 31 and $5.77 billion as of one year ago.
“Our backlog continues to reflect the extraordinary demand that we are experiencing in our most important markets, increasing sequentially by over $1 billion,” Lane said. For the first time, our backlog has exceeded $8 billion, and it is $2.4 billion higher than it was at this time last year. Our strong earnings, backlog surge, and strong pipelines clearly demonstrate continued strength in our execution, customer relationships, and prospects. Overall, we remain optimistic that we will achieve continued success into 2026.”
Wall Street analysts are also optimistic, as Comfort Systems got some massive price target upgrades. UBS boosted its price target by a ridiculous $165 to $710 per share after the earnings were released, citing the impressive backlog.
EMCOR gave the stock a similar upgrade, raising it by $145 to $715 per share.
Comfort Systems stock gained most of that on Friday, as the stock surged some 22%, or roughly $124 per share, to $686 per share. When the market closed on Thursday, the stock was at just $562 per share.
Comfort Systems is rated a buy among most analysts, but with a median price target of just $554 per share, it is bound to get even more upgrades after its Q2 earnings.
Better Long-Term Returns Than the Magnificent 7
With Friday’s rally, Comfort Systems stock is now up 60% year-to-date and 130% over the past 12 months.
Over the longer term, it has posted annual returns that tech giants and Magnificent 7 stocks would love to have. Its average annualized return over the past five years is 76%. That’s the same as AI juggernaut NVIDIA over that stretch. And over the past 10 years it has averaged a 39% return each year, which beats every Magnificent 7 stock except NVIDIA over that period.
And unlike NVIDIA and a lot of the big tech stocks, it is not severely overpriced with a P/E ratio of 28. It also comes without the volatility, as Comfort Systems stock has not had a negative year since 2014. Even in 2022 when tech stocks tanked, Comfort System stock gained 17%.
All in all, if Comfort Systems is not a stock you are familiar with, you should get to know it.