Is FIX Stock's 81.5% Rally Just the Beginning? What Margin Sustainability Tells Us

Comfort Systems USA (FIX) just posted an impressive 81.5% gain over the past six months, but here’s what really matters for long-term investors: can the company maintain its structurally higher gross margin?

The numbers suggest yes—at least for the near term. Through the first nine months of 2025, FIX’s gross margin hit 23.6%, up 340 basis points year-over-year. In Q3 alone, it jumped 370 bps. While breaking through 24% permanently might be tough, the real story is that these gains appear structural rather than cyclical, not just a temporary market bounce.

Why the Margin Story Matters More Than the Stock Price

Wall Street has already priced in FIX’s rally—the stock trades at a forward P/E of 30.93, sitting at a premium versus industry peers. But the margin sustainability is the hidden engine driving future returns.

Here’s the breakdown:

Technology exposure is the margin multiplier. FIX’s Technology sector revenue climbed to 42% of total sales in 2025, up from 32% in 2024. These aren’t commodity HVAC jobs—they’re massive hyperscale data center and AI infrastructure projects. Larger, more complex, less price-sensitive. The company can bid selectively and actually say no to low-margin work. That disciplined approach to project selection has been a game-changer.

The backlog tells the real story. FIX’s order book hit $9.38 billion in Q3, a 65% year-over-year increase from $5.68 billion and 15.5% sequentially. Most of this growth is skewed toward higher-margin verticals. Translation: visibility is strong, and the next 12-24 months of revenue should maintain that margin profile.

Execution beats labor constraints. Despite industry-wide labor shortages in construction, FIX’s decentralized model and experienced local operators delivered tighter cost controls and better labor deployment than competitors. That operational efficiency compounds the margin benefit.

How FIX Stacks Up Against CARR and AECOM

The competitive landscape is cluttered, but FIX’s positioning is distinct:

Carrier Global (CARR) is playing a portfolio game—reshaping through M&A and divestitures, building out climate and intelligent-energy capabilities. That’s a broader bet on electrification and efficiency across multiple fronts.

AECOM (ACM) comes from the engineering-first playbook. Global platform, massive project pipeline, heavy-civil expertise. They win the biggest, most technically complex infrastructure and energy projects because they offer end-to-end delivery and engineering depth that smaller players can’t match.

FIX’s edge? Pragmatic and focused. By pairing M&A with deep HVAC/electrical execution, Comfort Systems wins bundled, time-sensitive builds faster than engineering houses like AECOM or diversified players like Carrier Global. It’s not the broadest platform, but it’s the sharpest one in this vertical.

The Earnings Forecast: 80% Growth in 2025, Moderating to 16% in 2026

FIX’s 2025 earnings estimates stand at $26.31 per share, implying 80.2% year-over-year growth. For 2026, estimates sit at $30.61 per share—a more modest 16.4% growth rate. These figures have held steady over the past 60 days, suggesting analyst confidence, not hype-driven revisions.

The deceleration from 80% to 16% is expected after a massive 2025, but 16% growth in 2026 still beats the broader construction and HVAC industry averages.

So, Can Gross Margin Stay Above 24%?

Hitting 24%+ permanently? That’s a harder ask. But structurally higher margins—versus the pre-2024 baseline—appear defensible. The Technology sector exposure, disciplined bidding culture, and $9.38 billion backlog weighted toward premium projects all point to gross margins settling in the 23-24% range as the new normal, not a cyclical peak.

FIX currently carries a Zacks Rank #3 (Hold), which reflects the premium valuation. For investors already in, the margin story supports holding. For new money, the 30.93 forward P/E is steep, but if execution holds and Technology exposure keeps growing, it might be worth the price of admission.