FSV - FirstService nabs Buy rating as RBC sees further growth

2023-04-19 12:42:13 ET

FirstService Corp. ( NASDAQ: FSV ) stock advanced 1.5% in Wednesday afternoon trading after RBC Capital Markets started coverage of the stock with an Outperform rating on expectations for further growth and potential margin expansion.

"With leading positions across highly-fragmented markets in North America, we see an attractive, long-term setup for continued growth," analyst Tom Callaghan wrote in a note, while noting the company's revenue compounded annual growth rate stood at 19% over more than 25 years.

The sell-side analyst expects FirstService ( FSV ), a provider of residential property management, to book adjusted EBITDA of $399M in 2023, representing 13% growth from a year before.

"We also flag the potential for margin expansion, particularly within the Brands divisions, over the medium to longer-term which should serve as further upside," the note said.

Thanks to the company's recurring property services revenue and diversified businesses, Callaghan said, FirstService ( FSV ) is well positioned to weather a recessionary environment in light of ongoing industry headwinds.

The Buy rating aligns with the average Wall Street analyst rating (1 Strong Buy, 2 Buy, 3 Hold).

Earlier this month, (April 4) FirstService Residential acquired Toronto-based Crossbridge Condominium Services .

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