CSW Industrials (CSWI) AI Stock Analysis

• Market Cap: $5.53B
• Dividend Yield: 0.31%
• Average Volume (3M): 110.43K
• Price to Earnings (P/E): 39.3
• Beta (1Y): 1.39
• Revenue Growth: 10.41%
• EPS Growth: 34.56%
• Country: US
• Employees: 2,600
• Sector: Industrials
• Sector Strength: 83
• Industry: Industrial - Machinery
• EPS (TTM): 1.48
• Shares Outstanding: 16,783,080
• 10 Day Avg. Volume: 82,424
• 30 Day Avg. Volume: 110,429
• PEG Ratio: 2.87
• Price to Book (P/B): 5.01
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 35.58
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $309.67
• Price Target Upside: -5.96% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 3

CSW Industrials scores 74, driven by strong financial health characterized by robust revenue growth and a debt-free balance sheet. Technical analysis indicates a cautious approach due to mixed momentum signals. Valuation suggests the stock might be overvalued, reflecting high growth expectations. The recent earnings call and corporate events highlight strategic growth and market expansion, but challenges in profitability margins and cash flow remain.

Positive Factors

Industry Dynamics

CSW Industrials is well positioned to realize above average growth driven by favorable industry dynamics and company-specific efforts.

Profitability

Focus on pricing and cost controls supports profitability, with disciplined pricing cadence and exposure to lower cost international labor driving productivity and efficiency gains.

Negative Factors

Integration Challenges

The current premium could be at risk if the company faces integration challenges from its acquisitions, sector-specific downturns, or slower-than-expected growth.

Valuation

The stock is up 98% YTD and trading at 26.5x forward EBITDA forecast, indicating much of this growth is already reflected in the valuation.

CSW Industrials Business Overview & Revenue Model

Company Description

CSW Industrials, Inc. operates as a diversified industrial company in the United States and internationally. It operates through three segments: Contractor Solutions, Engineered Building Solutions, and Specialized Reliability Solutions. The Contractor Solutions segment provides cements, diffusers, grilles, registers, solvents, thread sealants, traps, and vents for use in HVAC/R, plumbing, general industrial, architecturally, and specified building products. The Engineered Building Solutions segment offers architectural railings and associated services; fire and smoke protection solutions; and pre-engineered and custom architectural building components for use in architecturally specified building products. The Specialized Reliability Solutions segment provides compounds, lubricants, lubricant management products, and sealants; and contamination control, industrial maintenance and repair, and operations solutions for use in energy, general industrial, mining, and railing markets. The company was incorporated in 2014 and is headquartered in Dallas, Texas.

How the Company Makes Money

CSW Industrials generates revenue through the sale of its diverse range of industrial products and specialty chemicals. The company earns money primarily by manufacturing and selling products that cater to specific niche markets. Key revenue streams include the Industrial Products segment, which offers products such as fire and smoke protection systems, architecturally-specified building products, and industrial systems that serve HVAC/R and plumbing markets. The Specialty Chemicals segment contributes by providing coatings, sealants, and lubricants that serve the energy, rail, and mining industries. CSWI's earnings are driven by its ability to develop innovative solutions that meet the stringent requirements of its varied customer base across different sectors. Strategic partnerships with distributors and direct sales to end-users also play a significant role in the company's revenue generation.

CSW Industrials Financial Statement Overview

Summary

CSW Industrials demonstrates a solid financial position across all verticals, with strong revenue growth, robust profitability margins, and a debt-free balance sheet. The company is well-positioned to leverage its financial strength for future growth opportunities while maintaining operational efficiency and financial stability. Continued focus on improving return on equity and managing capital expenditures will further enhance its financial health.

Income Statement

CSW Industrials shows strong financial performance in its income statement with consistent revenue growth. The revenue increased from $792.84 million to $858.61 million in TTM, reflecting a healthy revenue growth rate. The company maintains robust profitability margins, with a gross profit margin of approximately 44.8% and a net profit margin of 15.5% in TTM. EBIT and EBITDA margins also remain solid, indicating efficient operations and cost management.

Balance Sheet

The balance sheet of CSW Industrials is marked by a strong equity position and zero total debt in the latest period, which eliminates leverage risks. The equity ratio is high at 77.3%, reflecting financial stability and resilience. However, the return on equity (ROE) is relatively moderate at about 12.8% in TTM, suggesting room for improvement in generating returns on shareholders' equity.

Cash Flow

CSW Industrials exhibits a strong cash flow position with significant free cash flow generation of $146.85 million in TTM. The operating cash flow to net income ratio is robust, indicating good cash conversion efficiency. Free cash flow growth remains stable, although the company should continue to monitor capital expenditures to maintain free cash flow levels.

Breakdown
TTM	Mar 2024	Mar 2023	Mar 2022	Mar 2021	Mar 2020
Income Statement		Total Revenue
858.61M	792.84M	757.90M	626.43M	419.20M	385.87M
	Gross Profit
385.07M	350.75M	318.21M	255.96M	184.80M	177.05M
	EBIT
181.24M	159.12M	139.07M	97.38M	59.47M	66.07M
	EBITDA
222.36M	192.03M	174.73M	133.06M	76.29M	73.48M
	Net Income Common Stockholders
133.35M	101.65M	96.44M	66.39M	40.10M	45.72M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
22.16M	22.16M	18.45M	16.62M	10.09M	18.34M
	Total Assets
1.04B	1.04B	1.04B	995.36M	874.96M	369.25M
	Total Debt
215.37M	215.37M	253.00M	252.78M	242.34M	29.13M
	Net Debt
193.21M	193.21M	234.54M	236.16M	232.25M	10.79M
	Total Liabilities
408.25M	408.25M	499.31M	510.95M	462.94M	92.50M
	Stockholders Equity
615.72M	615.72M	525.67M	469.09M	412.01M	276.74M
Cash Flow		Free Cash Flow
146.84M	147.76M	107.50M	53.44M	57.42M	58.46M
	Operating Cash Flow
163.49M	164.33M	121.45M	69.09M	66.25M	69.90M
	Investing Cash Flow
-128.90M	-45.45M	-72.17M	-51.46M	-289.89M	-20.44M
	Financing Cash Flow
155.34M	-114.07M	-46.84M	-13.04M	214.05M	-57.15M

CSW Industrials Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 329.28
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSWI, the sentiment is Positive. The current price of 329.28 is above the 20-day moving average (MA) of 308.90, above the 50-day MA of 297.99, and below the 200-day MA of 340.77, indicating a neutral trend. The MACD of 6.19 indicates Negative momentum. The RSI at 63.08 is Neutral, neither overbought nor oversold. The STOCH value of 54.61 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CSWI.

CSW Industrials Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SPXC	80 Outperform	$6.95B	34.42	15.24%	―	10.78%	30.05%
MWA	76 Outperform	$3.84B	26.77	17.68%	1.07%	10.96%	43.44%
CSWI	74 Outperform	$5.53B	39.34	16.33%	0.31%	10.41%	34.56%
GTES	74 Outperform	$5.34B	25.10	6.93%	―	-4.01%	-8.86%
KAI	71 Outperform	$3.77B	33.99	13.38%	0.43%	6.83%	-1.84%
FLS	70 Outperform	$6.64B	23.83	14.00%	1.76%	4.23%	20.40%
Sector *	64 Neutral	$4.36B	12.05	5.23%	249.94%	4.13%	-10.23%

CSW Industrials Corporate Events

CSW Industrials Completes Merger with Aspen Manufacturing

On May 1, 2025, CSW Industrials‘ subsidiary, RectorSeal, completed a merger with Aspen Manufacturing, making Aspen a wholly owned subsidiary. The merger, valued at $313.5 million, aims to enhance CSW Industrials’ market position. Additionally, the company announced its decision to transfer its stock listing from Nasdaq to the New York Stock Exchange, effective June 9, 2025, to gain increased liquidity and visibility for its shareholders.

Spark’s Take on CSWI Stock

According to Spark, TipRanks’ AI Analyst, CSWI is a Outperform.

CSW Industrials has a strong financial foundation with robust revenue growth and a debt-free balance sheet, which are significant strengths. The recent earnings call provided an optimistic outlook with record revenues and strategic acquisitions, although some challenges remain in profitability margins and cash flow. Technical analysis suggests a cautious approach due to neutral momentum indicators, and the valuation signals the stock may be overvalued relative to industry averages. These factors collectively result in a balanced overall score.

To see Spark’s full report on CSWI stock, click here.

CSW Industrials Expands with Aspen Manufacturing Acquisition

On March 17, 2025, CSW Industrials, through its subsidiary RectorSeal, entered into a definitive agreement to acquire Aspen Manufacturing for $313.5 million. This acquisition is expected to expand CSWI’s HVAC/R product portfolio and enhance its market position by adding Aspen’s evaporative coils and air handler offerings. The transaction aligns with CSWI’s strategic expansion goals and is anticipated to be immediately accretive to its earnings per share and EBITDA, while maintaining a strong balance sheet.