Why Comfort Systems USA Stock Slid 17% Last Month

Core Viewpoint - Comfort Systems USA experienced a significant stock decline of 16.8% in February, primarily influenced by trade tariffs and concerns over profit margins despite reporting strong financial results for Q4 2024 [1][2][3]. Financial Performance - In 2024, Comfort Systems reported a 35% year-over-year increase in revenue, reaching $7 billion, and a 62$522 million [4]. - The company's backlog reached an all-time high of $6 billion, reflecting a 16$100 billion investment from Taiwan Semiconductor, are expected to drive further growth in 2025 [9]. Margin Concerns - Despite revenue growth, there are concerns that profit margins may contract due to rising costs from import tariffs, which could negatively impact profitability [2][5][6]. - Current gross and operating margins are significantly higher than the company's 10-year averages, raising questions about sustainability [5]. Strategic Focus - Management is being selective in job acquisition, prioritizing projects with the best profit margins, which positions the company favorably amidst high manufacturing demand [10].