Can Modular Expansion Continue to Drive Comfort Systems' Growth?

Comfort Systems USA, Inc. FIX continues to strengthen its position in the construction and building services market with a growing focus on modular operations. Modular construction has become a central part of the company’s strategy, offering faster project execution, improved quality control and better cost management. The model is increasingly being adopted by clients across industrial, institutional and technology sectors, where efficiency and precision are key project requirements.

In the first nine months of 2025, modular operations contributed 17% of total revenues, supported by rising demand from technology and industrial clients. The company remains on track to expand its modular capacity to nearly 3 million square feet by early 2026. Supported by robust demand, Comfort Systems also plans to evaluate further investments in modular facilities. Bookings during the period were particularly strong in the technology segment, including data center projects, which continue to contribute to the expanding modular workload.

As of Sept. 30, 2025, the company reported a record backlog of $9.38 billion, including a same-store backlog of $9.2 billion, reflecting year-over-year increases of 65.1% and 62%, respectively. The ongoing support from elevated public infrastructure spending, driven by multiple federal and state initiatives, has further lifted demand across end markets and provided a favorable business environment for the company’s modular expansion.

As modular adoption accelerates, especially for large-scale industrial and data center developments, the company’s early investments in capacity and automation are expected to enhance productivity and maintain margin stability. With rising demand for modular solutions and continued expansion of advanced infrastructure projects, Comfort Systems appears well-positioned to sustain long-term growth through its modular platform.

Comfort Systems Facing Competition

Comfort Systems holds a clear tactical edge in the fast-growing data-center market because its backlog is deeply skewed to technology or industrial work. But it faces substantial competition from other key players, including Sterling Infrastructure, Inc. STRL and Quanta Services, Inc. PWR. 

Sterling continues to strengthen its position in large-scale, mission-critical site development. In the third quarter of 2025, Sterling reported an exceptional 125% year-over-year increase in data center revenues, reflecting the growing need for technically complex and high-capacity facilities. The E-Infrastructure Solutions segment remains the key growth driver, supported by broad-based demand and strong execution. With robust project flow and a healthy pipeline, the company is well-positioned to capitalize on the ongoing expansion in data-related infrastructure.

Quanta is also seeing strong demand tied to rising data center construction, driven by its capabilities in electric power, communications and grid connectivity. The company continues to secure large contracts that enhance network reliability and energy delivery for high-load facilities. With a record backlog and steady bookings across transmission and communications projects, Quanta is positioned to benefit further from sustained investment in digital and power infrastructure.

FIX Stock’s Price Performance & Valuation Trend

Shares of Comfort Systems have gained 36% in the past three months against the Zacks Building Products - Air Conditioner and Heating industry’s decline of 2.9%.

FIX stock is currently trading at a premium compared with the industry peers, with a forward 12-month price-to-earnings (P/E) ratio of 31.78, as evidenced by the chart below.

Earnings Estimate Trend Favors FIX

FIX’s earnings estimates for 2025 and 2026 have trended upward over the past 30 days to $26.31 and $30.61 per share, respectively. The estimated figures for 2025 and 2026 imply year-over-year growth of 80.2% and 16.4%, respectively.

Comfort Systems currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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