Federal Signal (NYSE:FSS) Announces Quarterly Earnings Results

Federal Signal (NYSE:FSS) posted its quarterly earnings data on Wednesday. The conglomerate reported $1.16 EPS for the quarter, beating analysts’ consensus estimates of $1.08 by $0.08, Briefing.com reports. Federal Signal had a net margin of 11.31% and a return on equity of 20.14%. The company had revenue of $597.10 million for the quarter, compared to analyst estimates of $551.36 million. During the same period in the previous year, the business posted $0.87 earnings per share. Federal Signal’s quarterly revenue was up 26.5% on a year-over-year basis. Federal Signal updated its FY 2026 guidance to 4.500-4.800 EPS.

Here are the key takeaways from Federal Signal’s conference call:

• Federal Signal delivered a record 2025 with net sales of $2.18B (up 17%), organic growth of 11%, adjusted EBITDA of $438.9M (20.1% margin) and adjusted EPS of $4.23, all materially above prior year levels.
• Q4 momentum was strong — sales of $597M (up 27%), orders of $647M (up 45%, including $132M acquired backlog), adjusted EBITDA of $119.4M (20% margin) and higher GAAP and adjusted EPS versus Q4 2024.
• M&A activity accelerated with the acquisitions of New Way and Mega; New Way is expected to be roughly adjusted EPS neutral in 2026 and to deliver $15M–$20M of annual synergies by 2028 while the company transitions Canadian refuse distribution away from third‑party Labrie (winding down ~$80M of Labrie backlog over the next year).
• Near-term headwinds include higher acquisition and integration expenses (Q4 corporate op ex rose to $26.5M, driven by ~$13M of acquisition costs), increased intangible amortization and a normalization of the tax rate to ~25%, together creating an aggregate ~$0.16/share headwind in 2026.
• Financial flexibility remains solid — net debt of $501M, $925M of credit availability under a new five‑year facility, strong operating cash flow ($255M for the year) and capacity to fund growth, M&A, debt reduction, dividends and opportunistic buybacks.

Federal Signal Stock Performance

Federal Signal stock traded down $1.51 during trading hours on Friday, reaching $116.12. 158,775 shares of the company were exchanged, compared to its average volume of 388,359. Federal Signal has a 12 month low of $66.47 and a 12 month high of $132.89. The company has a current ratio of 3.02, a quick ratio of 1.25 and a debt-to-equity ratio of 0.41. The firm has a market cap of $7.06 billion, a price-to-earnings ratio of 28.95, a PEG ratio of 1.86 and a beta of 1.35. The stock has a 50-day moving average of $114.52 and a 200 day moving average of $117.35.

Analyst Ratings Changes

A number of research analysts have issued reports on the stock. CJS Securities upgraded shares of Federal Signal from a “market perform” rating to a “market outperform” rating and set a $140.00 target price on the stock in a report on Thursday. Weiss Ratings reissued a “buy (b-)” rating on shares of Federal Signal in a report on Monday, December 29th. Three research analysts have rated the stock with a Buy rating and three have given a Hold rating to the stock. According to MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus price target of $126.75.

Federal Signal News Summary

Here are the key news stories impacting Federal Signal this week:

• Positive Sentiment: Q4 earnings beat and strong revenue — Federal Signal reported Q4 EPS of $1.16 (above consensus) and revenue of $597.1M, which sparked the recent rally. Investors are reacting to the beat and the company’s FY2026 EPS guidance range of 4.50–4.80. Earnings Transcript
• Positive Sentiment: Analyst model raises from Sidoti — Sidoti raised several quarterly and full‑year EPS forecasts (FY2026 to $4.65 and FY2027 to $5.24), reflecting higher expected earnings power. This supports longer‑term upside. Sidoti coverage summary
• Positive Sentiment: CJS Securities upgrade — CJS upgraded FSS from Market Perform to Market Outperform with a $140 price target, adding near‑term analyst optimism and likely contributing to buying after the quarter. CJS Securities upgrade
• Positive Sentiment: Dividend increase — The board raised the quarterly cash dividend by ~7% to $0.15 per share, which is supportive for income investors and signals confidence in cash flow. Dividend announcement
• Positive Sentiment: Technical / momentum lift — The stock received an RS‑rating upgrade (to 74) and several investor writeups explaining the post‑earnings strength, which can attract momentum traders. RS rating lift
• Neutral Sentiment: Board appointments — Federal Signal added two directors to its board; governance changes can be neutral-to-positive but are unlikely to move near‑term fundamentals by themselves. Board appointments
• Negative Sentiment: Slight cut to Q1 estimate from Sidoti — Sidoti trimmed its Q1 2026 EPS estimate to $0.93 from $0.97, a small near‑term revision that could temper expectations. Analyst note
• Negative Sentiment: Profit‑taking and low volume after the rally — After the strong post‑earnings gains and analyst upgrades, profit‑taking on lighter-than-average volume appears to be pushing the stock lower today (trading volume below its average), which is a common short‑term reversion. Market reaction summary

Institutional Trading of Federal Signal

Several hedge funds have recently modified their holdings of the company. EverSource Wealth Advisors LLC raised its stake in Federal Signal by 140.6% during the 2nd quarter. EverSource Wealth Advisors LLC now owns 243 shares of the conglomerate’s stock worth $26,000 after buying an additional 142 shares during the period. Caitong International Asset Management Co. Ltd increased its holdings in shares of Federal Signal by 3,100.0% in the third quarter. Caitong International Asset Management Co. Ltd now owns 256 shares of the conglomerate’s stock valued at $30,000 after purchasing an additional 248 shares during the last quarter. UMB Bank n.a. increased its stake in shares of Federal Signal by 50.5% during the fourth quarter. UMB Bank n.a. now owns 331 shares of the conglomerate’s stock worth $36,000 after purchasing an additional 111 shares during the period. Meeder Asset Management Inc. bought a new stake in shares of Federal Signal during the 4th quarter valued at approximately $38,000. Finally, Danske Bank A S acquired a new stake in shares of Federal Signal during the 3rd quarter worth approximately $48,000. Institutional investors and hedge funds own 92.73% of the company’s stock.

About Federal Signal

Federal Signal Corporation (NYSE: FSS), headquartered in Oak Brook, Illinois, is a diversified industrial company that designs, manufactures and markets a broad range of products and services for municipal, commercial and industrial customers worldwide. Founded in 1901 in Chicago, the company has grown through a combination of organic investment and strategic acquisitions to become a leading provider of environmental management and safety and security solutions.

Federal Signal operates through two primary business segments.