We assign a fundamental rating of 4 out of 10 to CECO. CECO was compared to 132 industry peers in the Machinery industry. There are concerns on the financial health of CECO while its profitability can be described as average. CECO is valued quite expensively, but it does show have an excellent growth rating.

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1. Profitability

2. Health

3. Growth

4. Valuation

5. Dividend

1. Profitability

1.1 Basic Checks

In the past year CECO was profitable.
In the past year CECO has reported a negative cash flow from operations.
In the past 5 years CECO has always been profitable.
Each year in the past 5 years CECO had a positive operating cash flow.

1.2 Ratios

CECO's Return On Assets of 5.82% is fine compared to the rest of the industry. CECO outperforms 64.39% of its industry peers.
The Return On Equity of CECO (16.78%) is better than 78.03% of its industry peers.
Looking at the Return On Invested Capital, with a value of 5.78%, CECO is in line with its industry, outperforming 45.45% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for CECO is below the industry average of 10.24%.

		Industry Rank	Sector Rank
ROA	5.82%
ROE	16.78%
ROIC	5.78%

ROA(3y)2.43%

ROA(5y)1.92%

ROE(3y)6.31%

ROE(5y)4.73%

ROIC(3y)6.39%

ROIC(5y)5.34%

1.3 Margins

CECO has a Profit Margin of 7.22%. This is in the better half of the industry: CECO outperforms 62.88% of its industry peers.
CECO's Profit Margin has declined in the last couple of years.
CECO has a Operating Margin (6.42%) which is in line with its industry peers.
CECO's Operating Margin has improved in the last couple of years.
CECO's Gross Margin of 34.91% is fine compared to the rest of the industry. CECO outperforms 62.12% of its industry peers.
In the last couple of years the Gross Margin of CECO has remained more or less at the same level.

		Industry Rank	Sector Rank
OM	6.42%
PM (TTM)	7.22%
GM	34.91%

OM growth 3Y24.13%

OM growth 5Y5.02%

PM growth 3Y75.18%

PM growth 5Y-14.81%

GM growth 3Y4.29%

GM growth 5Y1.11%

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ROA

ROE

ROIC

Operating and Profit Margin

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2. Health

2.1 Basic Checks

CECO has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
CECO has more shares outstanding than it did 1 year ago.
Compared to 5 years ago, CECO has less shares outstanding
The debt/assets ratio for CECO is higher compared to a year ago.

2.2 Solvency

An Altman-Z score of 3.70 indicates that CECO is not in any danger for bankruptcy at the moment.
Looking at the Altman-Z score, with a value of 3.70, CECO is in the better half of the industry, outperforming 62.88% of the companies in the same industry.
A Debt/Equity ratio of 0.71 indicates that CECO is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.71, CECO is not doing good in the industry: 68.18% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Debt/Equity	0.71
Debt/FCF	N/A
Altman-Z	3.7

ROIC/WACC0.6

WACC9.62%

2.3 Liquidity

CECO has a Current Ratio of 1.33. This is a normal value and indicates that CECO is financially healthy and should not expect problems in meeting its short term obligations.
The Current ratio of CECO (1.33) is worse than 81.82% of its industry peers.
CECO has a Quick Ratio of 1.33. This is a bad value and indicates that CECO is not financially healthy enough and could expect problems in meeting its short term obligations.
With a Quick ratio value of 0.76, CECO is not doing good in the industry: 80.30% of the companies in the same industry are doing better.

		Industry Rank	Sector Rank
Current Ratio	1.33
Quick Ratio	0.76

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WACC

Debt/Equity

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3. Growth

3.1 Past

The Earnings Per Share has grown by an nice 19.18% over the past year.
The Earnings Per Share has been growing slightly by 4.06% on average over the past years.
Looking at the last year, CECO shows a very strong growth in Revenue. The Revenue has grown by 29.86%.
The Revenue has been growing by 10.29% on average over the past years. This is quite good.

EPS 1Y (TTM)19.18%

EPS 3Y35.41%

EPS 5Y4.06%

EPS Q2Q%85.71%

Revenue 1Y (TTM)29.86%

Revenue growth 3Y19.85%

Revenue growth 5Y10.29%

Sales Q2Q%45.82%

3.2 Future

CECO is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 42.16% yearly.
Based on estimates for the next years, CECO will show a very strong growth in Revenue. The Revenue will grow by 20.13% on average per year.

EPS Next Y39.51%

EPS Next 2Y43.92%

EPS Next 3Y42.16%

EPS Next 5YN/A

Revenue Next Year36.55%

Revenue Next 2Y25.1%

Revenue Next 3Y20.13%

Revenue Next 5YN/A

3.3 Evolution

The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.

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4. Valuation

4.1 Price/Earnings Ratio

The Price/Earnings ratio is 78.67, which means the current valuation is very expensive for CECO.
Based on the Price/Earnings ratio, CECO is valued a bit more expensive than the industry average as 69.70% of the companies are valued more cheaply.
Compared to an average S&P500 Price/Earnings ratio of 27.21, CECO is valued quite expensively.
The Price/Forward Earnings ratio is 45.89, which means the current valuation is very expensive for CECO.
Compared to the rest of the industry, the Price/Forward Earnings ratio of CECO indicates a slightly more expensive valuation: CECO is more expensive than 68.18% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 25.98, CECO is valued quite expensively.

		Industry Rank	Sector Rank
PE	78.67
Fwd PE	45.89

4.2 Price Multiples

Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of CECO indicates a slightly more expensive valuation: CECO is more expensive than 74.24% of the companies listed in the same industry.

		Industry Rank	Sector Rank
P/FCF	N/A
EV/EBITDA	38.44

4.3 Compensation for Growth

The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates CECO does not grow enough to justify the current Price/Earnings ratio.
CECO's earnings are expected to grow with 42.16% in the coming years. This may justify a more expensive valuation.