Breaking Down FirstService Corporation (FSV) Financial Health: Key Insights for Investors

Are you looking to understand the financial stability and growth potential of FirstService Corporation? What are the key indicators that reveal its performance over the past year? Did you know that in 2024, FirstService Corporation's consolidated revenues reached $5.22 billion, marking a 20% increase compared to the previous year, with Adjusted EBITDA rising by 24% to $513.7 million and Adjusted EPS increasing by 7% to $5.00? Dive in to uncover a detailed analysis of FirstService's financial health, examining revenue growth, profitability, and strategic moves that drive its success.

FirstService Corporation (FSV) Revenue Analysis

FirstService Corporation (FSV) generates revenue through two main pillars: FirstService Residential and FirstService Brands. FirstService Residential focuses on property management services for residential communities, while FirstService Brands encompasses a variety of essential property services via franchising and company-owned locations.

Understanding the nuances of these revenue streams offers key insights into FSV's financial health. For a deeper dive into the investors behind FSV, check out: Exploring FirstService Corporation (FSV) Investor Profile: Who’s Buying and Why?

Here's a breakdown of what drives FSV's top line:

• FirstService Residential: This segment is a significant revenue driver, providing management services to a large portfolio of residential communities. These services include property administration, maintenance, and other related offerings.
• FirstService Brands: This segment includes a diverse range of essential property services, such as home improvement, restoration, and property maintenance. Revenue is generated through both franchise operations and company-owned locations.

To contextualize FirstService Corporation's revenue streams, it's helpful to examine historical trends and segment contributions. While specific 2024 figures are not available, analyzing past performance can provide valuable insights.

Here is an example of how revenue streams have been broken down in the past:

For instance, reviewing First Quarter results from 2024, total revenues increased by 8.6% to $896.9 million compared to $825.9 million in the first quarter of 2023. FirstService Residential revenues increased 9.4% to $468.2 million in the first quarter of 2024, versus $428.1 million in the first quarter of 2023. FirstService Brands revenues increased 7.8% to $428.7 million in the first quarter of 2024, compared to $397.8 million in the first quarter of 2023.

Analyzing revenue stream changes involves looking at factors like:

• Acquisitions and Divestitures: Any significant acquisitions or divestitures can impact revenue figures for specific segments.
• Market Conditions: Shifts in the real estate market or demand for property services can influence revenue growth.
• Franchise Performance: The success of franchise operations within FirstService Brands plays a key role in that segment's revenue.

FirstService Corporation (FSV) Profitability Metrics

Understanding FirstService Corporation's (FSV) profitability involves examining several key metrics that provide insights into its financial health and operational efficiency. These metrics include gross profit margin, operating profit margin, and net profit margin. A comprehensive analysis of these elements helps investors assess the company's ability to generate profits and manage costs effectively.

Let's explore Exploring FirstService Corporation (FSV) Investor Profile: Who’s Buying and Why?

Gross Profit Margin:

Gross profit margin is a measure of a company's efficiency in producing and selling its goods or services. It is calculated as gross profit divided by revenue. For FirstService, the gross margin trends show:

• The gross margin for the quarter ending September 30, 2024, was 32.58%.
• The average gross margin for 2023 was 31.88%, a 0.5% increase from 2022.
• The average gross margin for 2022 was 31.72%, a 1.61% increase from 2021.

A higher gross profit margin indicates that a company is efficient in managing its production costs and can generate more profit from each dollar of revenue.

Operating Profit Margin:

Operating profit margin, also known as operating income margin, measures a company's profitability from its core business operations. It is calculated as operating income divided by revenue. For FirstService, the operating margin trends are as follows:

• The operating margin for the quarter ending December 31, 2024, was 6.48%.
• The operating income margin for the year ending December 31, 2024, was 6.47%, a 14.51% change year-over-year.
• The average operating margin for 2023 was 5.96%, a 4.38% increase from 2022.

An increasing operating profit margin suggests improved operational efficiency and better cost control.

Net Profit Margin:

Net profit margin is the percentage of revenue remaining after all expenses, including taxes and interest, have been deducted. It is calculated as net income divided by revenue. While specific net profit margin figures for FirstService in 2024 weren't available, the general trends and data points can be considered in relation to overall profitability. The financial services industry typically sees average profit margins around 10%, but this can vary widely based on the specific type of financial service provided.

Trends in Profitability Over Time:

Analyzing the trends in profitability over time provides valuable insights into a company's performance. For FirstService, the data indicates:

• Consolidated revenues for 2024 were $5.22 billion, a 20% increase relative to the prior year.
• Adjusted EBITDA for 2024 was $513.7 million, up 24%.
• Operating Earnings for 2024 were $337.5 million, versus $244.9 million in the prior year period.
• Adjusted EPS was $5.00, an increase of 7% versus the prior year.

These figures demonstrate strong revenue and earnings growth, reflecting effective management and strategic initiatives.

Comparison with Industry Averages:

Comparing FirstService's profitability ratios with industry averages helps to benchmark its performance. As of January 2025, sector-specific data indicates the following:

• The average profit margin for financial services businesses is around 10%.
• Automotive OEMs' average profit margin fell to 6.2% in the third quarter of 2024.
• Automotive suppliers recovered slightly to a 7.0% average profit margin in the third quarter of 2024.

While direct comparisons might vary depending on the specific industry segment, these benchmarks provide a general context for evaluating FirstService's profitability.

Analysis of Operational Efficiency:

Operational efficiency is critical for maintaining and improving profitability. Key factors include cost management and gross margin trends. For FirstService:

• The company's consolidated margin increased by 20 basis points for the year 2024.
• FirstService Brands saw a 45% increase in revenues, driven by strong performance in the restoration segment.
• FirstService Residential revenues were up 7%, with organic growth driven by new property management contract wins.

These results indicate effective cost management and successful revenue-generating activities across different business segments.

The following table summarizes key financial data for FirstService Corporation for the year 2024:

In conclusion, FirstService Corporation demonstrated strong financial performance in 2024, marked by significant revenue and earnings growth. Effective cost management, strategic acquisitions, and robust performance across its business segments contributed to improved profitability. Investors should monitor these trends and compare them against industry benchmarks to make informed decisions.

FirstService Corporation (FSV) Debt vs. Equity Structure

Understanding FirstService Corporation's (FSV) approach to financing its operations and growth involves analyzing its debt and equity structure. This includes examining the levels of debt the company carries, how it compares to its equity, and recent activities related to its debt management.

As of the fiscal year 2024, FirstService Corporation's financial statements provide insights into its debt profile:

• Long-term debt: FirstService Corporation has a substantial amount of long-term debt, which is used to fund significant acquisitions and support long-term growth initiatives.
• Short-term debt: The company also utilizes short-term debt, which is used to manage immediate financial obligations and operational needs.

The debt-to-equity ratio is a critical metric for evaluating a company's financial leverage. It indicates the proportion of equity and debt a company is using to finance its assets. For FirstService Corporation, this ratio can provide insights into its financial risk and stability. A lower ratio typically indicates a more conservative financing approach.

Here's a hypothetical overview, assuming data from the end of fiscal year 2024:

In recent years, FirstService Corporation has been actively managing its debt through various strategies:

• Debt Issuances: The company has issued debt to fund acquisitions, refinance existing debt, and support general corporate purposes.
• Credit Ratings: Credit ratings from agencies like Standard & Poor's and Moody's provide an assessment of FirstService Corporation's creditworthiness, influencing its borrowing costs and financial flexibility.
• Refinancing Activities: FirstService Corporation has engaged in refinancing activities to take advantage of favorable interest rates and extend the maturity of its debt obligations.

FirstService Corporation strategically balances debt financing and equity funding to optimize its capital structure. Debt financing can provide a cost-effective way to fund growth, while equity funding can reduce financial risk. The company's approach depends on market conditions, growth opportunities, and its overall financial strategy.

For more detailed insights, you can explore: Breaking Down FirstService Corporation (FSV) Financial Health: Key Insights for Investors

FirstService Corporation (FSV) Liquidity and Solvency

Liquidity is crucial for understanding FirstService Corporation's (FSV) short-term financial health. By examining key ratios and cash flow trends, investors can gain insights into the company's ability to meet its immediate obligations.

Here's an analysis of FSV's liquidity:

• Current Ratio: This ratio measures a company's ability to pay short-term obligations with its current assets.
• Quick Ratio: Similar to the current ratio, but excludes inventory to provide a more conservative view of liquidity.

Analyzing these ratios over time can reveal trends in FSV's liquidity position. A declining ratio may indicate potential challenges in meeting short-term liabilities, while an increasing ratio suggests improved liquidity.

Working capital, the difference between current assets and current liabilities, is another vital indicator. Monitoring trends in working capital can highlight whether FSV is efficiently managing its short-term resources.

A review of FirstService Corporation's cash flow statements provides further insights into its liquidity:

• Operating Cash Flow: Cash generated from the company's core business activities.
• Investing Cash Flow: Cash flow related to the purchase and sale of long-term assets.
• Financing Cash Flow: Cash flow related to debt, equity, and dividends.

By examining these cash flow trends, investors can assess FSV's ability to generate cash, fund investments, and manage its capital structure.

For instance, consistently positive operating cash flow indicates a strong ability to generate cash from its core operations, which enhances its liquidity position. Conversely, negative trends in operating cash flow might raise concerns about its ability to meet short-term obligations.

Solvency, on the other hand, is about the long-term financial stability. Debt-to-equity ratios and interest coverage ratios are key indicators. Let's explore FirstService Corporation's (FSV) solvency in more detail.

Here's an analysis of FSV's solvency:

• Debt-to-Equity Ratio: This ratio compares a company's total debt to its shareholder equity and measures the degree to which a company is financing its operations with debt versus equity.
• Interest Coverage Ratio: This ratio measures a company's ability to pay interest on its outstanding debt.

Investors should be aware of any potential liquidity concerns, such as declining cash reserves or increasing short-term debt. Conversely, strengths such as a strong cash position and consistent operating cash flow can provide a buffer against unforeseen challenges.

Explore more about FirstService Corporation's financial health: Breaking Down FirstService Corporation (FSV) Financial Health: Key Insights for Investors

FirstService Corporation (FSV) Valuation Analysis

To assess whether FirstService Corporation (FSV) is overvalued or undervalued, several key financial metrics and market indicators should be considered. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus on stock valuation.

Analyzing these metrics provides a multifaceted view of FirstService Corporation's financial health and market perception.

Here's a breakdown of key valuation aspects:

• Price-to-Earnings (P/E) Ratio: The P/E ratio indicates how much investors are willing to pay for each dollar of earnings. A higher P/E ratio might suggest overvaluation, while a lower one could indicate undervaluation, relative to industry peers or historical averages.
• Price-to-Book (P/B) Ratio: The P/B ratio compares a company's market capitalization to its book value of equity. It can help identify whether the stock price reflects the company's net asset value accurately.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: EV/EBITDA is used to assess a company's total value (including debt) relative to its earnings before interest, taxes, depreciation, and amortization. It’s useful for comparing companies with different capital structures.

Reviewing FirstService Corporation's stock performance over the past year or longer provides context on market sentiment and growth trajectory. Recent data indicates:

As of April 21, 2025, FirstService Corporation's (FSV) stock is trading at $214.91, showing a change of -0.36%.

When evaluating FirstService Corporation (FSV), it's essential to consider analyst ratings and price targets. These insights reflect the collective wisdom of financial experts who have thoroughly analyzed the company's prospects.

Averages for FirstService Corporation (FSV) are:

• Rating: Overweight
• Target Price: $234.00

Here is a summary of analyst ratings for FirstService Corporation (FSV):

• Number of Ratings: 9
• 5-Star Ratings: 1
• 4-Star Ratings: 3
• 3-Star Ratings: 5

If applicable, dividend yield and payout ratios offer insights into the company's commitment to returning value to shareholders and the sustainability of those payouts.

Understanding FirstService Corporation's mission, vision, and core values can provide additional context for its long-term strategy and valuation: Mission Statement, Vision, & Core Values of FirstService Corporation (FSV).

FirstService Corporation (FSV) Risk Factors

Understanding the risks that FirstService Corporation (FSV) faces is crucial for investors assessing the company's financial health. These risks span both internal and external factors that could impact its performance. Here's a breakdown of some key areas:

Industry Competition: The industries in which FirstService Corporation operates, such as property management and residential services, are highly competitive. This competition can put pressure on pricing and margins. Competitors may offer similar services at lower costs, potentially impacting FirstService's revenue and market share. Maintaining a competitive edge requires continuous innovation and efficient operations.

Regulatory Changes: Changes in regulations related to property management, real estate, and financial services can significantly affect FirstService Corporation. For example, new regulations could increase compliance costs or restrict certain business practices. Monitoring and adapting to these changes is essential for maintaining operational stability and financial health.

Market Conditions: Economic downturns, fluctuations in the real estate market, and changes in consumer spending can all impact FirstService Corporation's financial performance. A decrease in demand for property management services or a slowdown in the housing market could reduce revenue. Staying responsive to market trends and diversifying services can help mitigate these risks.

Operational Risks: Operational risks include challenges related to service delivery, technology, and human resources. Service disruptions, cybersecurity threats, and difficulties in attracting and retaining skilled employees can all negatively impact the company's performance. Effective risk management and investment in robust systems and training are vital for minimizing these risks.

Financial Risks: Financial risks involve factors such as debt levels, interest rate fluctuations, and access to capital. High debt levels can increase financial vulnerability, while rising interest rates can increase borrowing costs. Maintaining a healthy balance sheet and securing access to diverse funding sources are important for managing these risks.

Strategic Risks: Strategic risks relate to decisions about the company's direction, investments, and acquisitions. Poor strategic choices can lead to financial losses and missed opportunities. Thorough planning, market analysis, and risk assessment are necessary for making sound strategic decisions.

While specific mitigation strategies are detailed in FirstService Corporation's filings, common approaches include:

• Diversifying service offerings to reduce reliance on any single market segment.
• Investing in technology to improve efficiency and service quality.
• Implementing robust risk management programs to identify and address potential threats.
• Maintaining strong relationships with clients and partners to ensure customer retention.
• Adhering to strict compliance standards to mitigate regulatory risks.

Investors should carefully consider these risks and mitigation strategies when evaluating FirstService Corporation's financial health and investment potential. For further insights, you can explore: Breaking Down FirstService Corporation (FSV) Financial Health: Key Insights for Investors

FirstService Corporation (FSV) Growth Opportunities

FirstService Corporation (FSV) exhibits several promising avenues for future growth, driven by strategic initiatives and favorable market conditions. An analysis of key growth drivers, future revenue projections, and strategic partnerships provides insights into the company's potential trajectory.

Key growth drivers for FirstService Corporation include:

• Product Innovations: Continuous improvement and innovation in service offerings, such as property management and residential services, cater to evolving customer needs and maintain a competitive edge.
• Market Expansions: Extending the company's footprint into new geographic regions and market segments, both organically and through acquisitions, increases its customer base and revenue streams.
• Acquisitions: Strategic acquisitions of complementary businesses enhance service capabilities, expand market share, and create synergies that drive operational efficiencies and revenue growth.

Future revenue growth projections and earnings estimates for FirstService Corporation suggest a positive outlook. For example, the firm's financial performance in 2024 indicates a robust capacity for sustained growth. Strategic initiatives and partnerships further underpin these projections.

Strategic initiatives and partnerships that may drive future growth include:

• Technology Adoption: Investing in technology to streamline operations, enhance customer service, and improve data analytics capabilities.
• Sustainability Initiatives: Incorporating sustainable practices into service offerings to meet growing demand for environmentally responsible solutions.
• Strategic Alliances: Forming alliances with complementary service providers to offer comprehensive solutions and expand market reach.

FirstService Corporation's competitive advantages position the company favorably for growth. These advantages include:

• Brand Reputation: A strong brand reputation built on quality service and customer satisfaction fosters trust and loyalty.
• Diversified Service Portfolio: A diversified portfolio of essential property services provides stability and resilience across economic cycles.
• Experienced Management Team: An experienced management team with a proven track record of driving growth and creating shareholder value.

The following table summarizes key financial data and growth forecasts for FirstService Corporation:

These figures, grounded in the firm's 2024 fiscal year data, illustrate a consistent upward trajectory.

For more insights into the company's guiding principles, explore: Mission Statement, Vision, & Core Values of FirstService Corporation (FSV).