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.
Best Q1: CECO Environmental (NASDAQ: CECO)
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.”
CECO Environmental achieved the biggest analyst estimates beat and fastest revenue growth of the whole group. The stock is up 55.7% since reporting and currently trades at $29.90.
UniFirst (NYSE: UNF)
With a fleet of trucks making weekly deliveries to over 300,000 customer locations, UniFirst (NYSE: UNF) provides, rents, cleans, and maintains workplace uniforms and protective clothing for businesses across various industries.
UniFirst reported revenues of $602.2 million, up 1.9% year on year, in line with analysts’ expectations. The business had a strong quarter with an impressive beat of analysts’ full-year EPS guidance estimates.
The market seems happy with the results as the stock is up 8.1% since reporting. It currently trades at $188.95.
Is now the time to buy UniFirst? Access our full analysis of the earnings results here, it’s free.
Weakest Q1: Vestis (NYSE: VSTS)
Operating a network of more than 350 facilities with 3,300 delivery routes serving customers weekly, Vestis (NYSE: VSTS) provides uniform rentals, workplace supplies, and facility services to over 300,000 business locations across the United States and Canada.
Vestis reported revenues of $665.2 million, down 5.7% year on year, falling short of analysts’ expectations by 4%. It was a softer quarter as it posted a significant miss of analysts’ EPS estimates.
Vestis delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 29.7% since the results and currently trades at $6.12.
Read our full analysis of Vestis’s results here.
Pitney Bowes (NYSE: PBI)
With a century-long history dating back to 1920 and processing over 15 billion pieces of mail annually, Pitney Bowes (NYSE: PBI) provides shipping, mailing technology, logistics, and financial services to businesses of all sizes.
Pitney Bowes reported revenues of $493.4 million, down 40.6% year on year. This print came in 0.9% below analysts' expectations. Aside from that, it was a satisfactory quarter as it also recorded a solid beat of analysts’ EPS estimates.
Pitney Bowes had the slowest revenue growth and weakest full-year guidance update among its peers. The stock is up 16.1% since reporting and currently trades at $10.40.
Read our full, actionable report on Pitney Bowes here, it’s free.
Tetra Tech (NASDAQ: TTEK)
With a 50-year legacy of "Leading with Science" and operations on all seven continents, Tetra Tech (NASDAQ: TTEK) provides high-end consulting and engineering services focused on water management, environmental solutions, and sustainable infrastructure for government and commercial clients worldwide.
Tetra Tech reported revenues of $1.10 billion, up 4.9% year on year. This number beat analysts’ expectations by 6.6%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EPS guidance for next quarter estimates and full-year revenue guidance exceeding analysts’ expectations.
Tetra Tech delivered the highest full-year guidance raise among its peers. The stock is up 17.8% since reporting and currently trades at $36.39.
Read our full, actionable report on Tetra Tech here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Growth Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
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