Unpacking Q4 Earnings: CSW (NASDAQ:CSWI) In The Context Of Other HVAC and Water Systems Stocks

Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at CSW (NASDAQ:CSWI) and the best and worst performers in the hvac and water systems industry.

Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates.

The 9 hvac and water systems stocks we track reported a mixed Q4. As a group, revenues were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 9.3% since the latest earnings results.

CSW (NASDAQ:CSWI)

With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ:CSWI) offers special chemicals, coatings, sealants, and lubricants for various industries.

CSW reported revenues of $193.6 million, up 10.7% year on year. This print exceeded analysts’ expectations by 0.9%. Overall, it was a strong quarter for the company with a solid beat of analysts’ EPS estimates and EBITDA in line with analysts’ estimates.

Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, "I am very pleased to announce record revenue for the fiscal third quarter driven by the strategic acquisitions of Dust Free, PSP Products, and PF WaterWorks during the last twelve months as well as organic volume growth. Impressively, the team also achieved record net income, adjusted earnings per diluted share, and adjusted EBITDA for the fiscal third quarter."CSW Total Revenue

The stock is down 14.9% since reporting and currently trades at $293.51.

Read why we think that CSW is one of the best hvac and water systems stocks, our full report is free.

Best Q4: Lennox (NYSE:LII)

Based in Texas and founded over a century ago, Lennox (NYSE:LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.

Lennox reported revenues of $1.35 billion, up 16.5% year on year, outperforming analysts’ expectations by 8.9%. The business had an exceptional quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EPS estimates.

Story Continues

Lennox Total Revenue

Lennox scored the biggest analyst estimates beat among its peers. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 8.2% since reporting. It currently trades at $608.25.

Is now the time to buy Lennox? Access our full analysis of the earnings results here, it’s free.

Weakest Q4: AAON (NASDAQ:AAON)

Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings.

AAON reported revenues of $297.7 million, down 2.9% year on year, falling short of analysts’ expectations by 7.1%. It was a disappointing quarter as it posted a significant miss of analysts’ EBITDA and EPS estimates.

AAON delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 21.7% since the results and currently trades at $79.91.

Read our full analysis of AAON’s results here.

Northwest Pipe (NASDAQ:NWPX)

Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure.

Northwest Pipe reported revenues of $119.6 million, up 8.6% year on year. This result lagged analysts' expectations by 0.6%. Aside from that, it was a mixed quarter as it also logged an impressive beat of analysts’ EBITDA estimates but a significant miss of analysts’ EPS estimates.

The stock is down 17.8% since reporting and currently trades at $39.49.

Read our full, actionable report on Northwest Pipe here, it’s free.

Advanced Drainage (NYSE:WMS)

Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America.

Advanced Drainage reported revenues of $690.5 million, up 4.3% year on year. This number surpassed analysts’ expectations by 2.2%. More broadly, it was a mixed quarter as it also recorded an impressive beat of analysts’ Pipe revenue estimates but a significant miss of analysts’ EPS estimates.

Advanced Drainage pulled off the highest full-year guidance raise among its peers. The stock is down 1.4% since reporting and currently trades at $114.67.

Read our full, actionable report on Advanced Drainage here, it’s free.

Want to invest in winners with rock-solid fundamentals? Check out our Top 5 Quality Compounder Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.

Join Paid Stock Investor Research

Help us make StockStory more helpful to investors like yourself. Join our paid user research session and receive a $50 Amazon gift card for your opinions. Sign up here.

View Comments