Limbach Holding's (LMB, Financial) stock fell by $3.92, or 3%, to $119.92 during afternoon trading. This decline followed a report by Spruce Point that expressed concerns regarding the company's financial practices. The analysis by Spruce Point highlighted potential issues with Limbach's accounting, suggesting that its adjusted EBITDA and free cash flow figures might be inflated by 13% and 200%, respectively, over the last year. The report raises doubts about the sustainability of Limbach's growth strategy and forecasts a possible 20% to 50% drop in long-term value and market performance.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Limbach Holdings Inc (LMB, Financial) is $141.50 with a high estimate of $163.00 and a low estimate of $120.00. The average target implies an upside of 16.87% from the current price of $121.07. More detailed estimate data can be found on the Limbach Holdings Inc (LMB) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Limbach Holdings Inc's (LMB, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Limbach Holdings Inc (LMB, Financial) in one year is $44.30, suggesting a downside of 63.41% from the current price of $121.07. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Limbach Holdings Inc (LMB) Summary page.
LMB Key Business Developments
Release Date: May 06, 2025
- Total Revenue: $133.1 million, up 11.9% from $119 million in Q1 2024.
- ODR Revenue: Increased 21.7%, accounting for 67.9% of total revenue.
- GCR Revenue: Declined 4.5% as part of strategic shift towards ODR.
- Gross Profit: $36.7 million, up 18.1% from $31.1 million.
- Gross Margin: 27.6%, up from 26.1% in Q1 2024.
- ODR Gross Profit: $26.2 million, with a margin of 28.9%.
- GCR Gross Margin: Increased to 24.7% from 20% in Q1 2024.
- SG&A Expense: $26.5 million, up from $22.9 million, representing 19.9% of revenue.
- Adjusted EBITDA: $14.9 million, up 26.5% from $11.8 million.
- Adjusted EBITDA Margin: 11.2%, up from 9.9% in Q1 2024.
- Net Income: $10.2 million, up 34.6% from $7.6 million.
- Earnings Per Diluted Share: $0.85, up from $0.64.
- Adjusted Net Income: $13.5 million, up 38.9% from $9.7 million.
- Adjusted Earnings Per Diluted Share: $1.12, up from $0.82.
- Operating Cash Flow: $2.2 million inflow, compared to a $3.9 million outflow in Q1 2024.
- Free Cash Flow: $15 million, up from $11.8 million.
- Cash and Cash Equivalents: $38.1 million.
- Total Debt: $27.5 million.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Limbach Holdings Inc (LMB, Financial) reported a total revenue growth of 11.9% in Q1 2025 compared to Q1 2024.
- The Owner Direct Relationships (ODR) segment revenue increased by 21.7%, now accounting for 67.9% of total revenue.
- Gross profit expanded by 18.1%, reflecting a strong focus on high-margin ODR segments.
- Adjusted EBITDA increased by 26.5%, indicating improved operational efficiency.
- The company has added approximately 40 new professionals to its sales organization to support continued ODR growth.
Negative Points
- General Contractor Relationships (GCR) revenue declined by 4.5% as the company intentionally shifts focus towards ODR.
- SG&A expenses increased by approximately $3.6 million, representing 19.9% of total revenue, up from 19.2% in the previous year.
- The ODR gross margin slightly decreased from 29.8% in Q1 2024 to 28.9% in Q1 2025.
- The company faces ongoing tariff uncertainties, although the impact has been neutral so far.
- There is a risk of equipment price volatility due to macroeconomic factors, which could affect future project costs.
