Federal Signal Corporation
Federal Signal Corporation Fundamental Analysis
Federal Signal Corporation (FSS) shows moderate financial fundamentals with a PE ratio of 29.94, profit margin of 11.47%, and ROE of 18.97%. The company generates $2.1B in annual revenue with moderate year-over-year growth of 8.06%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 69.2/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze FSS's fundamental strength across five key dimensions:
Efficiency Score
ExcellentFSS demonstrates superior asset utilization.
Valuation Score
WeakFSS trades at a premium to fair value.
Growth Score
ExcellentFSS delivers strong and consistent growth momentum.
Financial Health Score
ExcellentFSS maintains a strong and stable balance sheet.
Profitability Score
ModerateFSS maintains healthy but balanced margins.
Key Financial Metrics
Is FSS Expensive or Cheap?
P/E Ratio
FSS trades at 29.94 times earnings. This indicates a fair valuation.
PEG Ratio
When adjusting for growth, FSS's PEG of 4.54 indicates potential overvaluation.
Price to Book
The market values Federal Signal Corporation at 5.34 times its book value. This suggests the stock is fully valued or overvalued on an asset basis.
EV/EBITDA
Enterprise value stands at 17.31 times EBITDA. This signals the market has high growth expectations.
How Well Does FSS Make Money?
Net Profit Margin
For every $100 in sales, Federal Signal Corporation keeps $11.47 as profit after all expenses.
Operating Margin
Core operations generate 16.01 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $18.97 in profit for every $100 of shareholder equity.
ROA
Federal Signal Corporation generates $12.16 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Federal Signal Corporation produces operating cash flow of $248.54M, showing steady but balanced cash generation.
Free Cash Flow
Federal Signal Corporation generates strong free cash flow of $220.09M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.62 in free cash annually.
FCF Yield
FSS converts 3.11% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
29.94
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
4.54
vs 25 benchmark
P/B Ratio
Price to book value ratio
5.34
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.44
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.18
vs 25 benchmark
Current Ratio
Current assets to current liabilities
2.61
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.19
vs 25 benchmark
ROA
Return on assets percentage
0.12
vs 25 benchmark
ROCE
Return on capital employed
0.20
vs 25 benchmark
How FSS Stacks Against Its Sector Peers
| Metric | FSS Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 29.94 | 26.49 | Worse (Expensive) |
| ROE | 18.97% | 1307.00% | Weak |
| Net Margin | 11.47% | -5131.00% (disorted) | Strong |
| Debt/Equity | 0.18 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 2.61 | 10.48 | Strong Liquidity |
| ROA | 12.16% | -1549792.00% (disorted) | Strong |
FSS outperforms its industry in 4 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Federal Signal Corporation's 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
50.67%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
97.06%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
121.77%
Industry Style: Cyclical, Value, Infrastructure
High Growth