CECO Environmental: Trades At A Premium Multiple, But I Think It Is Justified

CECO Environmental: Trades At A Premium Multiple, But I Think It Is Justified

CECO Environmental Corp. (CECO) is rated a buy, driven by robust order visibility, a record backlog, and structural demand from power and industrial infrastructure. Q1 2026 backlog reached ~$1.03 billion (up 72% y/y), with bookings of $449 million and a book-to-bill ratio of ~2.2x, signaling strong forward growth. The Thermon acquisition enhances CECO’s margin mix and cross-selling potential, positioning CECO closer to customers’ uptime and reliability needs. Valuation is demanding at 23x forward EBITDA, but projected EBITDA growth to $330–$380 million could drive significant upside without multiple expansion.

My recommendation for CECO Environmental Corp. (CECO) is a buy rating. CECO is turning into a much larger industrial growth platform, and the order book gives investors enough visibility to confidently forecast solid EBITDA