# CECO Environmental (CECO.US)

Canonical: https://gigainvestors.com/s/CECO

Analysis as of: 2026-10-16T07:27:20.739Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: fail; earnings resilience is evidence only). Published buy qualification: no.

Share price: $60.54 per share; close as of 2026-10-15.

Estimated value: low $6.53 per share, central $7.96 per share, high $9.17 per share. Buy at or below the central value $7.96 per share. Valuation as of 2026-10-16T07:27:20.739Z; scenarios are not confidence intervals.

Expected annual return: 3.8% at the stated quote. About 3.8% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: fail

- 3 revenue declines in the last 10 years (informational)

- more than 2 net loss years

- operating margin variation exceeds 0.35

- Financial history: 10 years

- Years with declining revenue: 3

- Years with a net loss: 3

- Operating margin variation: 0.98×

Chart: Operating margin; fiscal year observations.

- FY2016: -0.06×

- FY2017: 0.02×

- FY2018: 0.03×

- FY2019: 0.05×

- FY2020: 0.04×

- FY2021: 0.03×

- FY2022: 0.05×

- FY2023: 0.06×

- FY2024: 0.06×

- FY2025: 0.07×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- ROIC, median of available years: 13.1%

- ROIC, second-lowest year: 4.7%

- Typical minus recent gross margin: 0.1 pp

- Typical gross margin (annual median): 32.7%

- Recent gross margin (lower of latest and 3-year median): 32.7%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.1%

- ROIC including acquisitions, ten-year median: 4.6%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: -19.7%

- FY2017: 4.7%

- FY2018: 11.0%

- FY2019: 19.7%

- FY2020: 9.7%

- FY2021: 7.2%

- FY2022: 15.8%

- FY2023: 19.1%

- FY2024: 15.2%

- FY2025: >100%

### economics: pass

- Owner earnings / net income, 5-yr: 1.32×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $125M

- Net income, five-year total: $95M

- Return on incremental invested capital: 87.9%

- Working capital / revenue, annual change: 1.1 pp

- Working capital / revenue, change between three-year averages: 7.8 pp

- Working capital / revenue, final three-year average: 27.1%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 6.08×

- FY2022: 1.42×

- FY2023: 1.32×

- FY2024: 0.87×

- FY2025: 1.27×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 4.7% vs 19.1%

- Per-share earnings: -0.19 to 0.37 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 2.4%

- Ordinary dilution, 5-year annual growth: 0.6%

- Market cap gain: $1.7B

- Cumulative retained earnings: $98M

- Diluted shares, 10-year annual growth: 2.4%

- Diluted shares, 5-year annual growth: 0.6%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value change: $0.56

- Per-share value, starting three-year median: -$0.19

- Per-share value, ending three-year median: $0.37

- Buybacks concentrated in cheaper years (correlation): -0.09

- Average buyback yield: 4.7%

- Buyback history: 6 years

- Debt-funded buybacks: No

- Acquisition spending: $195M

- Cumulative net income, 10 years: $72M

- ROIC, first three-year median: 4.7%

- ROIC, last three-year median: 19.1%

Chart: Earnings per share; fiscal year observations.

- FY2016: -$1.12

- FY2017: -$0.09

- FY2018: -$0.21

- FY2019: $0.50

- FY2020: $0.23

- FY2021: $0.04

- FY2022: $0.50

- FY2023: $0.37

- FY2024: $0.36

- FY2025: $1.37

### accounting: pass

- stock compensation exceeds 15% of operating cash flow

- Sloan accruals: 4.9%

- Receivables to sales index (DSRI): 0.91×

- Restructuring years, last five: 1

- Stock compensation / operating cash flow: 223.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 0.12×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 1.21×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -21.6%

- FY2017: -2.2%

- FY2018: -7.4%

- FY2019: 1.8%

- FY2020: 0.9%

- FY2021: -2.9%

- FY2022: -2.4%

- FY2023: -5.3%

- FY2024: -1.6%

- FY2025: 4.9%

## Holders

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Dan Davidowitz](https://gigainvestors.com/pcm): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 33% since Jun 2026 · "CECO Environmental shares sink after reporting lower net income" (seekingalpha.com, Oct 2025) · sales +38.8%

Story as of 2026-10-16T09:58:29.235Z; price observation 2026-10-15.

Price needs cash profits to grow 30.8% a year for ten years

- 2025-07-29: CECO Environmental hits record high on Q2 beat with biggest-ever order ([seekingalpha.com](https://seekingalpha.com/news/4473338-ceco-environmental-hits-record-high-on-q2-beat-with-biggest-ever-order?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2025-10-28: CECO Environmental shares sink after reporting lower net income ([seekingalpha.com](https://seekingalpha.com/news/4509712-ceco-environmental-shares-sink-after-reporting-lower-net-income?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-04-28: CECO targets $940M-$1B 2026 sales as it expects early June Thermon close ([seekingalpha.com](https://seekingalpha.com/news/4581229-ceco-targets-940m-1b-2026-sales-as-it-expects-early-june-thermon-close?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

### Sales · FY2024–2025

sales +38.8%; source https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm; observed 2026-03-02.

- FY2016: $417M 

- FY2017: $345M 

- FY2018: $337M 

- FY2019: $342M 

- FY2020: $316M 

- FY2021: $324M 

- FY2022: $423M 

- FY2023: $545M 

- FY2024: $558M 

- FY2025: $774M 

### Gross margin · FY2025

gross margin 32.7%; source https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm; observed 2026-03-02.

- FY2016: 32.3% 

- FY2017: 32.8% 

- FY2018: 33.1% 

- FY2019: 33.4% 

- FY2020: 33.3% 

- FY2021: 31.1% 

- FY2022: 30.3% 

- FY2023: 31.4% 

- FY2024: 35.2% 

- FY2025: 32.7% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in pollution & treatment controls; annual sales are USD 774.4 million.

- Source: https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm (filed 2026-03-02); FY2025: revenue 774381000; grossProfit 253060000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CECO.US: CECO Environmental Corp. provides critical solutions in industrial air quality, industrial water treatment, and energy transition solutions in the United States, the United Kingdom, the Netherlands, China, and internationally. It operates through Engineered Systems and Industrial Process Solutions segments. The company offers emissions management, fluid bed cyclones, thermal acoustics, and separation and filtration solutions; engineering services and environmental systems; and industrial exhaust air contamination treatment and control systems, solutions, and services, as well as intelligent control solutions. It also provides engineered and configured products and solutions, including dampers and diverters, expansion joints, selective catalytic reduction systems, severe-service and industrial cyclones, dust collectors, thermal oxidizers, filtration systems, wet and dry scrubbers, separators and coalescers, water treatment packages, metallic and non-metallic pumps, industrial silencers, and fluid handling equipment, as well as plant engineering services and engineered design build fabrication services. In addition, the company offers solutions for air pollution and contamination control, fluid handling, and process filtration in various applications, such as aluminum beverage can production, automobile production, food and beverage processing, semiconductor fabrication, electronics production, steel and aluminum mill processing, wood manufacturing, desalination, and aquaculture markets, as well as it provides engineered industrial process heating solutions for process industries. It markets its power generation, hydrocarbon processing, water/wastewater treatment, oily water separation and treatment, marine and naval vessels, and midstream oil and gas sectors. CECO Environmental Corp. was founded in 1869 and is headquartered in Addison, Texas.

### Why customers stay

Margins ranged from 31.4% to 35.2% during 2023–25; it earns 13.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: grossProfit / revenue = 31.4%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2024: grossProfit / revenue = 35.2%.

- Source: https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm (filed 2026-03-02); FY2025: grossProfit / revenue = 32.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); 10-year return on capital observations [[2016,-0.19682625392307843],[2017,0.04747972216406158],[2018,0.1104085999592419],[2019,0.197427624503413],[2020,0.09737365409185614],[2021,0.0719691098006178],[2022,0.15814310759070468],[2023,0.19086435342688823],[2024,0.15186931454259142],[2025,1.5960044632258676]]; median 0.13113895725091668. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 30% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm (filed 2026-03-02); Gross margin observations: [[2021,0.3113531190226445],[2022,0.3033999247563454],[2023,0.3138800943387569]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 4 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2017: growth capex 0; upkeep 1028000; owner earnings 12031000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2018: growth capex 0; upkeep 3090000; owner earnings 2889000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2019: growth capex 0; upkeep 5655000; owner earnings 22661000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2020: growth capex 0; upkeep 3945000; owner earnings 14187000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2021: growth capex 0; upkeep 2616000; owner earnings 8663000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2022: growth capex 0; upkeep 3376000; owner earnings 24655000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2023: growth capex 0; upkeep 8384000; owner earnings 17034000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); FY2024: growth capex 1125388.4610599503; upkeep 16242611.53894005; owner earnings 11237388.46105995. Growth capex / owner earnings = 0.10014679700356284.

- Source: https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm (filed 2026-03-02); FY2025: growth capex 0; upkeep 11343000; owner earnings 63590000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Dividend observations: [[2016,8995000],[2017,7792000],[2018,0],[2019,0],[2020,0],[2021,230000],[2022,671000],[2023,0],[2024,0],[2025,0]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 10.7% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); CECO.US SharesStats.PercentInsiders = 10.673 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 30.8% yearly over ten years; actual growth was 10%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-03-02); Ten-year compound average after fade. Initial solved rate 0.43940152036957536. Price 60.54; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 0.668526881150522 → FY2025 1.7372439197555587. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $9.90 per share

- 2016-11: $14.19 per share

- 2016-12: $13.95 per share

- 2017-01: $13.12 per share

- 2017-02: $11.30 per share

- 2017-03: $10.51 per share

- 2017-04: $11.29 per share

- 2017-05: $9.40 per share

- 2017-06: $9.18 per share

- 2017-07: $9.66 per share

- 2017-08: $7.47 per share

- 2017-09: $8.46 per share

- 2017-10: $8.77 per share

- 2017-11: $5.41 per share

- 2017-12: $5.13 per share

- 2018-01: $4.53 per share

- 2018-02: $4.11 per share

- 2018-03: $4.45 per share

- 2018-04: $4.70 per share

- 2018-05: $5.71 per share

- 2018-06: $6.14 per share

- 2018-07: $6.87 per share

- 2018-08: $8.44 per share

- 2018-09: $7.88 per share

- 2018-10: $7.44 per share

- 2018-11: $8.31 per share

- 2018-12: $6.75 per share

- 2019-01: $6.88 per share

- 2019-02: $7.62 per share

- 2019-03: $7.20 per share

- 2019-04: $7.76 per share

- 2019-05: $8.85 per share

- 2019-06: $9.59 per share

- 2019-07: $9.23 per share

- 2019-08: $6.95 per share

- 2019-09: $6.99 per share

- 2019-10: $6.86 per share

- 2019-11: $7.87 per share

- 2019-12: $7.66 per share

- 2020-01: $7.60 per share

- 2020-02: $6.75 per share

- 2020-03: $4.67 per share

- 2020-04: $5.42 per share

- 2020-05: $5.31 per share

- 2020-06: $6.59 per share

- 2020-07: $6.70 per share

- 2020-08: $8.48 per share

- 2020-09: $7.29 per share

- 2020-10: $7.08 per share

- 2020-11: $7.40 per share

- 2020-12: $6.96 per share

- 2021-01: $6.93 per share

- 2021-02: $8.20 per share

- 2021-03: $7.93 per share

- 2021-04: $7.30 per share

- 2021-05: $7.63 per share

- 2021-06: $7.16 per share

- 2021-07: $7.04 per share

- 2021-08: $7.55 per share

- 2021-09: $7.04 per share

- 2021-10: $6.88 per share

- 2021-11: $5.93 per share

- 2021-12: $6.23 per share

- 2022-01: $6.31 per share

- 2022-02: $5.38 per share

- 2022-03: $5.49 per share

- 2022-04: $4.75 per share

- 2022-05: $6.26 per share

- 2022-06: $5.98 per share

- 2022-07: $7.75 per share

- 2022-08: $9.96 per share

- 2022-09: $8.85 per share

- 2022-10: $11.82 per share

- 2022-11: $12.12 per share

- 2022-12: $11.68 per share

- 2023-01: $14.39 per share

- 2023-02: $15.63 per share

- 2023-03: $13.99 per share

- 2023-04: $11.61 per share

- 2023-05: $10.76 per share

- 2023-06: $13.36 per share

- 2023-07: $12.04 per share

- 2023-08: $13.78 per share

- 2023-09: $15.97 per share

- 2023-10: $16.18 per share

- 2023-11: $19.25 per share

- 2023-12: $20.28 per share

- 2024-01: $19.33 per share

- 2024-02: $22.65 per share

- 2024-03: $23.02 per share

- 2024-04: $21.62 per share

- 2024-05: $25.03 per share

- 2024-06: $28.85 per share

- 2024-07: $29.20 per share

- 2024-08: $28.95 per share

- 2024-09: $28.20 per share

- 2024-10: $23.80 per share

- 2024-11: $32.05 per share

- 2024-12: $30.23 per share

- 2025-01: $28.32 per share

- 2025-02: $24.88 per share

- 2025-03: $22.80 per share

- 2025-04: $23.79 per share

- 2025-05: $26.89 per share

- 2025-06: $28.31 per share

- 2025-07: $44.95 per share

- 2025-08: $45.59 per share

- 2025-09: $51.20 per share

- 2025-10: $48.89 per share

- 2025-11: $52.15 per share

- 2025-12: $59.85 per share

- 2026-01: $67.43 per share

- 2026-02: $60.45 per share

- 2026-03: $59.58 per share

- 2026-04: $74.14 per share

- 2026-05: $74.75 per share

- 2026-06: $90.74 per share

- 2026-07: $65.89 per share

- 2026-08: $71.20 per share

- 2026-09: $69.64 per share

- 2026-10: $60.54 per share

## Annual estimated value (USD per share)

- FY2016: low $9.22 per share, central $10.34 per share, high $11.83 per share

- FY2017: low $6.36 per share, central $7.15 per share, high $8.19 per share

- FY2018: low $4.77 per share, central $5.28 per share, high $5.96 per share

- FY2019: low $4.52 per share, central $5.03 per share, high $5.70 per share

- FY2020: low $4.28 per share, central $4.74 per share, high $5.37 per share

- FY2021: low $4.13 per share, central $4.61 per share, high $5.24 per share

- FY2022: low $6.98 per share, central $7.80 per share, high $8.89 per share

- FY2023: low $8.81 per share, central $9.85 per share, high $11.24 per share

- FY2024: low $5.97 per share, central $6.70 per share, high $7.66 per share

- FY2025: low $8.37 per share, central $10.31 per share, high $11.95 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/3197/000119312526085815/ceco-20251231.htm); period 2025-12-31, filed 2026-03-02.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.