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

We came across a bearish thesis on Limbach Holdings, Inc. on Valueinvestorsclub.com by Glory_Warriors. In this article, we will summarize the bulls’ thesis on LMB. Limbach Holdings, Inc.'s share was trading at $69.50 as of December 1st. LMB’s trailing and forward P/E were 23.35 and 15.87 respectively according to Yahoo Finance.

Limbach is an HVAC, plumbing, and electrical contractor focused on non-residential buildings, whose stock has surged from $4 in 2019 to over $110 on the back of a favorable construction cycle and a shift toward owner-direct relationships (ODR). While this mix shift is widely viewed as transforming Limbach into a less cyclical, higher-margin business, the thesis argues the market materially overestimates both the defensiveness and the durability of ODR-driven growth.

Although ODR now represents 70% of revenue, checks and disclosures indicate that much of this segment consists of large discretionary retrofit and upgrade projects—not recurring maintenance—which exposes it to the same non-residential cycle now weakening. Census data, peer results, and Limbach’s own order trends point to a downturn: ODR orders fell from +33% in Q1 2025 to –8% in Q2, while GCR orders dropped –55%. This contraction contradicts the notion of a service-like revenue base and highlights rising competitive pressure that is already weighing on margins.

Through-cycle growth expectations also appear overstated. Roughly half of ODR’s historical 20% organic CAGR stemmed from a strong industry upcycle, and the remainder from wallet-share gains at existing customers—gains that may now be largely exhausted given Limbach’s full deployment of account executives.

Going forward, sustainable growth likely aligns with mid-single-digit non-residential trends, with limited incremental margin expansion after a multi-year lift driven by mix and unusually favorable pricing conditions. With margins near industry ceilings, valuations elevated versus history, and cyclical headwinds building, the analysis argues Limbach’s true earnings power is far lower than current expectations, supporting an estimated fair value of $58 per share.

Previously we covered a bullish thesis on EMCOR Group, Inc. (EME) by CompanyCharts in April 2025, which highlighted the company’s U.S.-centric revenue base, strong earnings growth, and attractive valuation. The company's stock price has appreciated approximately by 58.93% since our coverage. This is because the thesis played out. The thesis still stands as EMCOR’s fundamentals remain robust. Glory_Warriors shares a similar but emphasizes on industry pressures affecting Limbach.

Limbach Holdings, Inc. is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 19 hedge fund portfolios held LMB at the end of the second quarter which was 18 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.