2 Reasons to Like LMB (and 1 Not So Much)

October 14, 2025 at 00:04 AM EDT

LMB Cover Image

While the S&P 500 is up 22.9% since April 2025, Limbach (currently trading at $92.13 per share) has lagged behind, posting a return of 14.9%. This may have investors wondering how to approach the situation.

Does this present a buying opportunity for LMB? Or does the price properly account for its business quality and fundamentals?

Why Does Limbach Spark Debate?

Established in 1901, Limbach (NASDAQ: LMB) provides integrated building systems solutions, including mechanical, electrical, and plumbing services.

Two Positive Attributes:

1. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

Limbach’s EPS grew at an astounding 54.4% compounded annual growth rate over the last five years, higher than its flat revenue. This tells us management responded to softer demand by adapting its cost structure.

Limbach Trailing 12-Month EPS (Non-GAAP)

2. Increasing Free Cash Flow Margin Juices Financials

Free cash flow isn't a prominently featured metric in company financials and earnings releases, but we think it's telling because it accounts for all operating and capital expenses, making it tough to manipulate. Cash is king.

As you can see below, Limbach’s margin expanded by 5.9 percentage points over the last five years. We have no doubt shareholders would like to continue seeing its cash conversion rise as it gives the company more optionality. Limbach’s free cash flow margin for the trailing 12 months was 4.3%.

Limbach Trailing 12-Month Free Cash Flow Margin

One Reason to be Careful:

Long-Term Revenue Growth Flatter Than a Pancake

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Unfortunately, Limbach struggled to consistently increase demand as its $552.9 million of sales for the trailing 12 months was close to its revenue five years ago. This wasn’t a great result, but there are still things to like about Limbach.

Final Judgment

Limbach’s positive characteristics outweigh the negatives. With its shares underperforming the market lately, the stock trades at 21.4× forward P/E (or $92.13 per share). Is now a good time to buy? See for yourself in our full research report, it’s free for active Edge members.

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