Limbach Holdings, Inc. (LMB): A Bull Case Theory

We came across a bullish thesis on Limbach Holdings, Inc.  on Brian’s Substack by Brian Flasker. In this article, we will summarize the bulls’ thesis on LMB. Limbach Holdings, Inc. 's share was trading at $137.88 as of July 30^th. LMB’s trailing and forward P/E were 49.60 and 38.76 respectively according to Yahoo Finance.

Limbach Holdings (LMB), a specialized mechanical systems firm focused on HVAC and design-build services, recently became the target of a short report by Spruce Point Capital, which questioned the company’s growth sustainability, accounting practices, and M&A strategy. However, a closer look reveals the report mischaracterizes several key aspects of the business. LMB’s growth has been organic and disciplined, with management shifting its focus to higher-margin Owner Direct Relationships (ODR), which now make up over 50% of gross profit.

This segment, emphasizing recurring maintenance and service work, brings improved cash flow visibility and reduces cyclicality tied to large construction projects. Spruce Point's claims about aggressive accounting ignore that LMB has improved working capital management and continues to generate solid free cash flow. Concerns over acquisitions also appear overstated; the company’s bolt-on deals have been small, strategically aligned, and immediately accretive, aimed at deepening regional ODR penetration.

The short report also fails to account for LMB’s strong backlog, favorable end-market exposure, and growing services mix, which collectively support durable mid-teens EBITDA margins. While the stock dipped following the report and a Q4 miss driven by weather and one-off charges, guidance remains intact, and execution has rebounded.

With a modest valuation, clean balance sheet, and accelerating shift toward recurring revenue, LMB offers a compelling long-term story. The short thesis appears to misunderstand the company’s structural evolution, creating a potential buying opportunity as fundamentals remain strong and misperceptions get corrected over time.

Previously we covered a bullish thesis on Carlisle Companies (CSL) by Max Dividends in May 2025, which highlighted its leadership in construction materials, earnings growth potential, and operational excellence under Vision 2030. The company’s stock price has appreciated approximately 8.19% since our coverage. Brian Flasker shares a similar perspective on Limbach (LMB) but emphasizes its pivot to recurring revenue and misunderstood fundamentals.

Limbach Holdings, Inc.  is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 18 hedge fund portfolios held LMB at the end of the first quarter which was 25 in the previous quarter. While we acknowledge the potential of LMB as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.