Data center supplier Ceco gains 19% on earnings beat; analysts still see 112% upside

Shares of Ceco Environmental, a supplier of air and water treatment systems and thermal management solutions, surged 19% on Monday. The company’s latest quarterly results beat Wall Street estimates. Analysts still see room for the stock to double.

Ceco shares rose 19% on the Texas Stock Exchange on Monday to close at $52 apiece. The rally followed Ceco’s report that third-quarter top line rose 105% year over year to $404.4 million and adjusted diluted EPS was 2.3 times the year-earlier figure, at $0.60 per share. Both figures came in slightly above Wall Street estimates, Barron’s reported.

Ceco’s orders were up 234% year over year at $777.6 million in the third quarter, while its order book ended the quarter at $2.2 billion, up 205% versus at the end of the 2025 third quarter. Data center projects accounted for around 20% of the quarter-end order book, with industrial and energy projects making up most of the rest, CEO Todd Gleason said on a call with analysts.

The management raised its 2026 orders guidance by 25% to more than $2.5 billion and kept its revenue guidance unchanged at $1.300-1.375 billion. Wall Street currently expects $1.34 billion, according to Barron’s. For 2027, the management guides for revenue of $2.1-2.3 billion and adjusted EBITDA of $475-525 million.

Gleason attributed the outlook in part to Thermon’s performance. Ceco completed the acquisition in June with the intention of expanding its portfolio of industrial temperature control and heat management products. Thermon contributed $148.5 million to Ceco’s headline revenue in the third quarter.

Gleason said the management took into account inflation, policy changes, geopolitical developments, and sentiment around investment in AI and data centers. He also said regional conflicts had delayed some large industrial water projects in the Middle East, so the management excluded those projects from its guidance.

Ceco shares are down 13% year to date. The bulk of the decline came after semiconductor stocks peaked around the end of June. Like chipmakers, Ceco is exposed to trends in AI, Barron’s notes.

Wall Street is upbeat on the stock. All eight analysts tracked by MarketWatch rate it a “buy.” The average target price of $110.30 per share implies 112% upside from Monday’s close.