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Comfort Systems USA, Inc. (FIX) Intrinsic Value

DCF-based fair value calculation with Bear, Base, and Bull scenarios

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Comfort Systems USA, Inc. (FIX)

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Intrinsic Value (DCF)

Current$1,091.04
→
Intrinsic$735.75
-33%
$503.09$735.75$1,177.18
Current price reflects execution expectations above 25% growth — not unreasonable for quality businesses.
Range: Bear $503 → Bull $1177. Current price implies expectations above the base case, closer to bull expectations.
Discount ↓Growth →21%23%25%27%
8%$904$976$1053$1134
10%$634$683$736$791
12%$485$522$561$602
14%$391$419$450$482

Bull Case

  • Bull case ($1177) offers 8% upside at 30% growth, 9% discount

Bear Case

  • Bear case ($503) implies 54% downside at 20% growth, 12% discount
  • Trading 33% above base case — execution must exceed assumptions to justify
  • Using 25% growth — aggressive, watch for mean reversion
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5-Year Free Cash Flow Projection

Year 1$922.48M
Year 2$1.15B
Year 3$1.44B
Year 4$1.80B
Year 5$2.25B
Terminal$33.14B

📐 Model Inputs

Growth Rate25.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$737.99MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
ℹ️

DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.

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Frequently Asked Questions

Is FIX stock undervalued or overvalued?
🔴 OVERVALUED

FIX trades at $1091.04 vs. our DCF-derived intrinsic value of $610.65, implying -41% downside. Using a 10.0% WACC and 25.0% FCF growth assumption, the current price requires growth rates above our estimates to be justified. Even our bull case ($916.65) suggests limited upside.

What is FIX's intrinsic value?

Using a 5-year DCF model: Base FCF of $738M, projected at 25.0% 5Y CAGR (best of revenue, EPS, or FCF growth), discounted at 10.0% WACC, with 3.0% terminal growth. Terminal value calculated via Gordon Growth Model: TV = FCF₅ × (1+g) / (WACC−g). After deducting $-241M net debt and dividing by 0.04B shares: Bear $402.84 | Base $610.65 | Bull $916.65. Current price $1091.04 implies -41% to base case.

How is FIX's fair value calculated?

DCF Methodology:

① Project FCF years 1-5 using 25.0% growth derived from 5-year historical CAGR (best of revenue, EPS, or FCF growth, with 8% floor and 25% cap).

② Calculate terminal value at year 5 using perpetuity growth model with g=3.0%.

③ Discount all cash flows to PV using WACC=10.0%.

④ Sum PV of explicit period + PV of terminal value = Enterprise Value ($21.60B).

⑤ Subtract net debt, divide by shares outstanding.

Sensitivity analysis available above—adjust WACC ±2% or growth ±3% to stress-test the valuation. Implied EV/FCF multiple: 29.3x.