CECO Environmental Corp. (CECO): fair value, margin of safety and Wheel Score

Is CECO undervalued?

CECO Environmental Corp. (CECO) closed at 60.54 on 16 Oct 2026, 131% above the GLS average fair value of 26.26. 2 of the 2 models that produced a number value the shares below the current price. A gap this wide usually means the market is paying for growth or a story the trailing numbers do not show yet; the models work from filed results, not forecasts, so they are conservative by design.

Only 2 of the nine models produced a value (DCF, 10 Cap); the others need a dividend, positive free cash flow or positive book value the company does not have yet, so the average rests on a narrow base.

The nightly engine files CECO under Speculative / Distressed - negative earnings or a Piotroski score of 3 or less - which caps its Wheel Score at 45 and keeps it out of the Sunday Scan.

Nine valuation models for CECO

Each model turns the latest filed numbers into a value per share; the GLS fair value is the simple average of the ones that produce a positive number. The last two rows are shown for reference and never enter the average. The Quote page lets you switch any model off and add your own margin of safety.

Quality and financial health

Financial health is weak: CECO passes 3 of the nine Piotroski tests. Our screens drop the stock at the health rule; a low score is often the reason a stock looks cheap on the valuation models. The GLS Moat score is 6.0 out of 10: a ten-year record that is consistent in some of the metrics the score tracks (revenue, earnings, margins, cash flow, returns on capital) and patchy in others.

Returns on capital are high - ROIC 14.6%, ROE 15.8%, ROA 5.6% - with debt at 0.08 times equity and negative free cash flow.

CECO Environmental Corp. pays no dividend, so the DDM model does not apply and a covered-call holder earns only the premium and any price gain. Revenue comes mainly from Engineered Systems 61%, Industrial Process Solutions 22%, Thermal Solutions 17% (quarter Q2 FY2026).

Institutional ownership scores 5/10, insider activity 2/10 and Congressional trading 10/10 on the GLS smart-money scales.

Wheel Score 45: Weak

CECO scores 45 out of 100 on the Wheel Score, in the Weak band (under 50), capped at 45 because the engine files it as Speculative / Distressed. Value 0/25, Health 7/20, Moat 9/15, Premium 15/20, Stability 16/20. The score is not a judgement on the company; it says the price, quality and premium do not line up for selling puts on it today.

Implied volatility is 82% on the near-the-money contracts 20-60 days out - above the 60% ceiling of the sweet spot. Premiums are large, but the Wheel Score tapers the Premium points (15 of 20) because volatility this high usually comes with a reason. Chain open interest is 22,066 contracts across all expiries - enough for the wheel at normal size.

Volume runs at 1.3M shares a day on a market cap of $3.5B, with a beta of 1.50 - a high beta, so the stock tends to move more than the market and a strike can be gapped through; the Stability part of the Wheel Score gives that 16 of 20.

The Wheel Score ranks ~7,400 US stocks for selling cash-secured puts and covered calls; it is updated nightly and is not a recommendation. The walkthrough lesson shows how the score fits into a trade, start to finish.

Upcoming events

CECO Environmental Corp. reports earnings on 27 Oct 2026 (before the open) - inside the 14-day window the Sunday Scan avoids, because a put sold now would carry the report's gap risk.

Earnings, dividend, IPO, split and economic calendars for the whole market, filterable to your watchlists.

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