Limbach的论点已破；尽管营收增长，但利润率与利润下滑，2026年是重置之年，因此该股应卖出。

I don't know about you, but I found this earning season to be quite dramatic and there was a lot that transpired. So, in today's video, I want to do an earnings recap and cover a lot of the stocks that I didn't get the chance to already cover here on my channel. This is going to be kind of a rapid fire style video where I try to cover as many stocks as I possibly can. Now, if you have been watching my channel for some time, then you're probably going to recognize a lot of these tickers because many of them I have discussed previously and this is kind of going to be an update on some of the stocks that I watch and think look interesting. However, there is a brand new stock that we are going to talk about near the end of this video and I actually ended up purchasing a small position and I'm going to explain why I bought it and the TLDDR is that I think its numbers and its price are just too compelling for me to pass up. So I did buy a small kind of more speculative position in this one. So that is what we are going to be talking about in today's video. And with that being said, let's just hop right into it. And the first stock that I want to discuss is Limbach with the ticker symbol LMB. Now this is a stock that I have discussed on my channel previously. And I actually took on a position in this one and shared my investment thesis with my YouTube channel. And unfortunately after the Q2 report, my investment thesis on this one broke. So, I did fully exit my position and I left with about a 20% loss. However, I was selling options against my position. So, my net loss, I believe, was around $5,000 if I'm remembering correctly, which is basically a scratch for my portfolio size. I also did keep this one very small in my portfolio because I did consider it a little bit more speculative for the time being. So the TLDDR from my investment thesis was that Limbach saw a very bad first quarter report. That is what initially caused the stock to fall from about 114 bucks all the way down to 70. And that is when I started to become interested in the stock and I took on a position. Now the reason I took on the small position is because in the Q1 report management said that the business was going through a little bit of an air pocket of demand where it was a oneoff week quarter. However, things were already improving and by the second quarter, revenue and profits should be growing and picking up again. They also had a very strong outlook for the full year of 2026. So, basically, they were saying, "Yeah, some of our customers in 2025 slowed down their healthcare spending and then we have about a 6 months lag between when we actually get that revenue." So, there was an air pocket. It has been realized and now going forward, our business is actually healthy and should be fine. And while the business was supposed to be seeing this one-off weak quarter of an air pocket in demand, I thought that it was an interesting stock to again take on a small position in. Now, the other part of the investment thesis was that Limbach is basically a construction and maintenance contracting business. They construct and help maintain buildings and a bunch of different industries across the United States. And they started getting into the data center industry. So I viewed their data center business as an accelerant on top of an already healthy and growing company. So just to quickly summarize my investment thesis in Lumbok once again Q1 was supposed to be a weak quarter where they had an air pocket of demand but things should rebound in the second quarter and then the data center revenue should be an accelerant on top of their already healthy business. That's really what it came down to. So now let's take a look at how their second quarter actually played out. So this screenshot shows us the highlights from the quarter and right at the top we can see that Limbach did increase their revenue guidance to 760 to 790 million. However, they revised their adjusted IBATA guidance down to 78 to 84 million. So Limbach is seeing more topline growth but its profits and margins are continuing to decline. Further down we can see that revenue increased by 22%. ODR revenue which is their higher margin revenue increased by 18%. Bookings also grew to 182 million with a booktoill ratio of 1.1x, which is good to see. However, Ibeta is down year-over-year even though the revenue grew 22%. And that shows you how much the margins of this business are actually declining. This is the same story for gross profits. Gross profits were down 2.5 million even on 22% more revenue. However, the business did have a strong quarter for operating cash flow and it produced $18.7 million of operating cash flow. So, the story of this quarter is that the top line is continuing to grow very strong, but margins and profits are way down on a year-over-year basis, and this is why the stock fell even more. Continuing on through the earnings report, once again, we can see that the revenue increased by 21.9%. And here they wrote that of the total increase in revenue, acquisition related revenue represented 21.7% of the growth. So almost all of Limbach's revenue growth for the second quarter was acquired growth, which is an initial suggestion that the second quarter was actually still weak for their core business. And it suggests that Q1 was not necessarily a oneoff quarter because in the second quarter, if they didn't acquire any businesses, then their revenue growth would be basically flat. Moving down, we can see that gross profits declined by 6.4% 4% and the total gross margin came in at 21.5% versus 28% last year. Now, some of this was expected because they did acquire a larger company last year that does have lower margins. And the margins of that acquired business should expand over time. So, I was expecting the margins to be down on a year-over-year basis, but not by this much. Moving on to the next screenshot. This one is their updated guidance for 2026. And here we can see that they're now expecting revenue of 760 to 790 million which is an increase of 30 million across the board. However, IBEDA is expected to come in around 80 million versus about 92 million previously. So they are expecting their profits to come in much lower even on higher revenue. And what's interesting about this is they increased their total organic revenue growth guidance to 9 to 14% versus 4 to 8%. However, the ODR organic revenue growth, which again is the higher margin revenue, is expected to only grow 6 to 10% versus 9 to 12%. And this is also why the margins of the business are declining and the profits of the business are also expected to be lower is because their higher margin revenue, which is really the key part of the business, is growing slower than expected. Then we can see they lowered their gross margin projections by 3 percentage points for the full year. However, they are still expecting free cash flow of 75% of IBITA, which works out to about $60 million of free cash flow for this year. So, the business is still profitable and growing the top line, but they are having a very real margin compression that is causing their profits to actually start declining. Now, moving on to some of the screenshots from the conference call. I'm not going to read all of this, but the TLDDR is that the CEO is now calling 2026 a full reset year. instead of just a one-off quarter of weakness. This again suggests that the investment thesis that Q1 was a one-off quarter is broken because again he is saying that 2026 now is going to be a full reset year. So the business is expected to see a pretty weak full year. Moving on to the next screenshot and by the way if you want to pause and read the underlying segments then please feel free to but in the transcript the CEO also said that the margin expansion is now a 2027 story. So, this confirms that Q1 was not a one-off weaker quarter, but that they are now expecting 2026 to all around be a weaker year. And this is not what I signed up for. I signed up for a healthy business that saw a one-off weaker quarter. And I did not sign up for a full-on turnaround story for 2026. Then, the final screenshot that I want to share here shows us that the CEO spent a lot of time on their conference call explaining how data centers are now the primary focus of the company. Now last quarter it was framed as the core business was healthy and data centers were additive and a new growth driver on top again of a healthy business. This quarter the framing changed dramatically and it's now that data centers are the focus of the company and a necessary expansion for their success. In my opinion this is because the core business is actually weakening more than they were expecting and management is using data centers as a way to escape. That's kind of how I'm viewing it. This isn't what I signed up for and this is not the investment thesis that I had. So now let's head over to Limbach very quickly here on Stock Unlock and we can see that the market cap of the business is now at $56 million. Now they are expecting about $60 million of actual free cash flow for this year which means that the business is trading for about $8.4 times this year's free cash flow now. So, I do see a side of the story where Limbach stock is actually extremely cheap now. If they can actually turn around the business and get the profits of the business growing again, but that wasn't my initial investment thesis. And when my initial investment thesis breaks, I get out of my position. And let's take a quick look at its financials to show you more about what I mean here. So, here we can see that Limbach's revenue is actually at an all-time high of $683.8 million in the trailing 12 months now. And again, the top line of the business is actually growing quite well. However, the gross profits have now been declining for the past two quarters and are down from their $169 million peak. If we also take a look at the company's IBITA, which is their preferred metric, we can see that IBITA has now been declining for two quarters straight and is down by $10 million from its peak as well. Then lastly, let's go and take a look at the company's free cash flow and they have actually produced about $50.6 million of free cash flow in the trailing 12 months. So the business is still growing the top line and its underlying free cash flow is still strong and it's producing profits. But again, I do not like to see that it's EBITDA and margins are declining across the board and that this is now more of a 2027 story and not just a one-off weaker quarter. So I do see the side where this stock is looking extremely cheap and it could be a great turnaround play now, but that's not what I signed up for and it's not what I really wanted in my portfolio. So, I did end up getting out of my position right after the second quarter results. And this is just how things go sometimes. Investment thesis don't always work out. But what I did right here is I understood that this one did involve some higher risk and some executional risk on the management as well since it really was just having faith that Q1 was a one-off and that the business would actually start rebounding in the second quarter. And that is really what I was waiting to see before I continued scaling up my position. So, for the time being, I left it very small until I saw more of that execution actually taking place. And since it didn't happen, the pain in my portfolio really wasn't all that much. And again, I'm pretty much calling this one a scratch. And I'm just going to move on. For me, it's as simple as when the thesis breaks, I get out and I don't look back. No one's going to hit 100%. And I don't really regret taking this position on. I don't think I could have done anything differently or anything better. It just happens sometimes and that's that's the game of investing in the stock market.