FirstService Posts Higher Revenues, Profits in Q4

FirstService (TSE: FSV) (NASDAQ: FSV), North America’s largest property management company, announced Tuesday strong fourth quarter and full-year results, as overall revenue growth drove performance.

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Revenues & Earnings

Revenues came in at $856.9 million for the quarter ended December 31, an increase of 11% from $775.1 million last year.

Adjusted EBITDA was $83.5 million, up 5%, and adjusted EPS was $1.21, up 19% from the prior-year quarter. GAAP operating income was $44.9 million in Q4 2021, compared to $49.4 million a year earlier. GAAP diluted EPS was $0.70 per share in the quarter, compared to $0.50 for the same quarter a year ago.

The board of directors approved an 11% increase in the quarterly dividend, from $0.1825 to $0.2025 per common share. This is the company’s seventh consecutive year of double-digit dividend growth.

CEO Commentary

FirstService CEO Scott Patterson said, “We are pleased to have delivered another year of very strong organic and overall revenue growth with all of our businesses demonstrating their ability to win market share, despite a challenging labour environment. Our focus during the coming year is to further strengthen our teams and increase capacity to meet robust demand for our services. The continued strength in our end market fundamentals, together with the recent addition of strategic tuck-under acquisitions, provide us with confidence in our top-line growth outlook for 2022.”

Wall Street’s Take

Last month, Raymond James analyst Frederic Bastien upgraded FSV to Buy from Hold with a price target of C$200, up from C$195. This implies 4.4% upside potential.

Bastien forecasts double-digit organic growth and a steady EBITDA margin of 12% for FirstService Brands in 2022, after removing the impact of 2021’s large weather events. The analyst assumes that a healthy U.S. home improvement market will continue to generate record bookings for California Closets, CertaPro Painters and Floor Coverings International.

As Frederic Bastien is the only analyst to have offered a stock rating for FSV in the last three months, the average FirstService price target is C$200.

TipRanks’ Smart Score

FSV scores a 5 out of 10 on the TipRanks Smart Score rating system, indicating that the stock should perform in line with the overall market.

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