10 Best Economic Recovery Stocks to Buy

7. Comfort Systems USA, Inc. (NYSE:FIX)

Estimated average analysts’ upside: 57.91%

Revenue CAGR last 5 years: 22.45%

Number of Hedge Fund Holders: 50

​Comfort Systems USA, Inc. (NYSE:FIX) is a leading provider of mechanical, electrical, and plumbing (MEP) services, including heating, ventilation, air conditioning (HVAC), piping, and fire protection systems. The company generates the majority of its revenue through the Mechanical Services segment, which serves commercial, industrial, and institutional clients across the US and offers services such as installation, maintenance, repair, and replacement of MEP systems. The services offered by FIX require a significant cash outlay from customers, which means that demand tends to decline during economic slowdowns but subsequently experiences accelerations when the economy recovers.

Comfort Systems USA, Inc. (NYSE:FIX) reported exceptional Q4 and full year 2024 results, with quarterly EPS up 60% from the previous year and annual earnings up 62% YoY. The company achieved record revenue with same-store revenue growth of 22% in Q4, while backlog reached an all-time high of $6 billion. Operating cash flow was remarkably strong at $849 million for 2024, demonstrating robust execution and customer relationships. The company’s gross profit margin improved significantly to 23.2% in Q4 2024 compared to 20.6% in Q4 2023, while the full-year gross profit margin increased to 21% from 19% in 2023, which points toward increasing pricing power and competitive advantage.

Comfort Systems USA, Inc. (NYSE:FIX)’s revenue mix is heavily weighted toward the industrial sector, accounting for over 60% of volume in 2024, with technology, including data centers and chip fab, representing 33% of revenue, a substantial increase from 21% in the prior year. Project pipelines remain at unprecedented levels, with particularly strong demand in the technology sector. Still, the demand is somewhat constrained by high interest rates and construction activity slowing down in the second half of 2024. If FIX demonstrated such strong growth during a constrained market environment, its growth will likely further explode if conditions improve. For this reason, we include FIX in seventh place on our list of best economic recovery stocks to buy.