The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let's take a look at how CECO Environmental (NASDAQ:CECO) and the rest of the industrial & environmental services stocks fared in Q1.
Growing regulatory pressure on environmental compliance and increasing corporate ESG commitments should buoy the sector for years to come. On the other hand, environmental regulations continue to evolve, and this may require costly upgrades, volatility in commodity waste and recycling markets, and labor shortages in industrial services. As for digitization, a theme that is impacting nearly every industry, the increasing use of data, analytics, and automation will give rise to improved efficiency of operations. Conversely, though, the benefits of digitization also come with challenges of integrating new technologies into legacy systems.
The 7 industrial & environmental services stocks we track reported a strong Q1. As a group, revenues beat analysts' consensus estimates by 3.1% while next quarter's revenue guidance was 1% above.
Luckily, industrial & environmental services stocks have performed well with share prices up 12.4% on average since the latest earnings results.
With roots dating back to 1869 and a focus on creating cleaner industrial operations, CECO Environmental (NASDAQ:CECO) provides technology and expertise that helps industrial companies reduce emissions, treat water, and improve energy efficiency across various sectors.
CECO Environmental reported revenues of $176.7 million, up 39.9% year on year. This print exceeded analysts' expectations by 17%. Overall, it was a stunning quarter for the company with an impressive beat of analysts' EPS estimates and full-year revenue guidance beating analysts' expectations.
Todd Gleason, CECO's Chief Executive Officer commented, "We started 2025 with outstanding first quarter record orders of $228 million, which helped drive new record levels of backlog and revenue for the company. This is a powerful statement on the strength of our well-positioned portfolio, which is closely aligned to key long-term growth themes of industrial manufacturing reshoring, electrification, power generation, natural gas infrastructure, and industrial water investments. This marks the second consecutive quarter with bookings greater than $200 million, which has enabled our backlog to exceed $600 million for the first time in Company history. With our order pursuit pipeline now over $5 billion, we remain highly confident in our continued growth outlook."