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CSW Industrials (CSWI)
NASDAQ:CSWI
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CSW Industrials
(NASDAQ:CSWI)
Rating:74Outperform
Price Target:―
Positive Factors
Acquisition and Growth Potential
Management noted a 'good path to accretion in the near term' for the recent Aspen acquisition, which is seen as a constructive signal for future profitability.
Industry Positioning
CSWI remains a quality operator with a track record of scaling niche platforms and allocating capital with discipline.
Negative Factors
Cost Pressures
Increased uncertainty around tariff-related cost pressures and near-term margin dilution from the Aspen acquisition tempered the overall beat.
Valuation Concerns
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 (CSWI) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$5.06B
Dividend Yield0.32%
Average Volume (3M)88.41K
Price to Earnings (P/E)35.9
Beta (1Y)1.41
Revenue Growth10.41%
EPS Growth34.56%
CountryUS
Employees2,600
SectorIndustrials
Sector Strength92
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)2.24
Shares Outstanding16,783,080
10 Day Avg. Volume88,581
30 Day Avg. Volume88,409
Financial Highlights & Ratios
PEG Ratio2.87
Price to Book (P/B)5.01
Price to Sales (P/S)0.00
P/FCF Ratio35.58
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$321.00Price Target Upside6.68% Upside
Rating ConsensusHold
Number of Analyst Covering3
CSW Industrials Business Overview & Revenue Model
Company DescriptionCSW 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 MoneyCSW 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.85
Very Positive
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.78
Positive
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.82
Very Positive
| 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
Negative
300.91
Price Trends
302.58
Negative
317.56
Negative
341.61
Negative
Market Momentum
2.69
Positive
42.19
Neutral
10.56
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CSWI, the sentiment is Negative. The current price of 300.91 is below the 20-day moving average (MA) of 318.49, below the 50-day MA of 302.58, and below the 200-day MA of 341.61, indicating a bearish trend. The MACD of 2.69 indicates Positive momentum. The RSI at 42.19 is Neutral, neither overbought nor oversold. The STOCH value of 10.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CSWI.
CSW Industrials Risk Analysis
CSW Industrials disclosed 30 risk factors in its most recent earnings report. CSW Industrials reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
CSW Industrials Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
80 Outperform | $7.00B | 34.63 | 15.24% | ― | 10.78% | 30.05% | |
78 Outperform | $6.46B | 23.15 | 14.00% | 1.70% | 4.23% | 20.40% | |
74 Outperform | $5.06B | 35.92 | 16.19% | 0.32% | 10.41% | 34.56% | |
74 Outperform | $5.40B | 25.35 | 6.93% | ― | -4.01% | -8.86% | |
69 Neutral | $3.85B | 26.85 | 17.68% | 1.07% | 10.96% | 43.44% | |
64 Neutral | $4.39B | 11.81 | 5.20% | 249.38% | 3.96% | -12.36% | |
64 Neutral | $3.64B | 32.79 | 13.38% | 0.42% | 6.83% | -1.84% |
* Industrials Sector Average
Performance Comparison
CSWI
CSW Industrials
300.91
40.00
15.33%
FLS
Flowserve
49.61
0.89
1.83%
KAI
Kadant
305.08
32.99
12.12%
MWA
Mueller Water Products
24.57
5.99
32.24%
SPXC
SPX
149.77
5.43
3.76%
GTES
Gates Industrial
20.94
3.26
18.44%
CSW Industrials Earnings Call Summary
Earnings Call Date:May 22, 2025
(Q4-2025)
| % Change Since: -4.31%|
Next Earnings Date:Jul 30, 2025
Earnings Call Sentiment Positive
CSW Industrials reported another strong quarter and fiscal year with record-breaking financial performance across multiple metrics and strategic achievements like the acquisition of Aspen Manufacturing and the transition to the NYSE. However, challenges remain in specific segments with revenue declines and margin pressures. The overall sentiment is positive due to the significant achievements and growth prospects.Q4-2025 Updates
Positive Updates
Record-Breaking Financial Performance
CSW Industrials reported record results for revenue, adjusted EBITDA, adjusted earnings per diluted share, and adjusted net income for both the fourth quarter and full fiscal year 2025. Fourth quarter revenue reached $231 million with an adjusted EBITDA of $60 million, while full-year revenue was $878 million with an adjusted EBITDA of $228 million, marking an 11% revenue growth.
Successful Acquisition of Aspen Manufacturing
The acquisition of Aspen Manufacturing for $313.5 million was completed, marking the second-largest acquisition in the company's history. Aspen is expected to expand CSW's HVAC/R product offering and contribute high single to low double-digit revenue growth in fiscal 2026.
Strong Balance Sheet and Cash Flow
CSW ended the fiscal fourth quarter with $226 million in cash and reported record cash flow from operations of $168 million for the year, showing a 2% growth compared to the prior fiscal year.
Transition to New York Stock Exchange
CSW Industrials announced its move to the New York Stock Exchange on June 9th, 2025, which is expected to provide additional liquidity and benefit shareholders.
Employee-Centric Achievements
CSW Industrials was certified as a great place to work for the third consecutive year, and the board approved a profit-sharing ESOP contribution and additional profit-sharing 401(k) contribution.
Negative Updates
Challenges in Specialized Reliability Solutions Segment
Revenue in the Specialized Reliability Solutions segment decreased by 9% due to softer market demand, particularly early in the fourth quarter, with declines in the energy, rail transportation, and mining end markets.
Engineered Building Solutions Segment Revenue Decline
Revenue in the Engineered Building Solutions segment decreased by 4% due to the timing of projects converting to revenue from backlog, which was impacted by a large project completed in the prior year period that did not recur.
Margin Pressures and Increased Expenses
The consolidated adjusted EBITDA margin declined by 60 basis points to 25.9%, impacted by additional expenses related to recent acquisitions and increased freight expenses.
Company Guidance
During the fiscal fourth quarter of 2025, CSW Industrials achieved record results across multiple metrics, reflecting a robust performance. The company reported quarterly revenue of $231 million, adjusted EBITDA of $60 million, adjusted earnings per diluted share of $2.24, and adjusted net income of $38 million. For the full fiscal year 2025, CSW Industrials delivered revenue of $878 million, adjusted EBITDA of $228 million with a margin expansion of 70 basis points to 25.9%, adjusted earnings per diluted share of $8.41, adjusted net income of $137 million, and cash flow from operations of $168 million. The company also announced a significant acquisition of Aspen Manufacturing for $313.5 million, which is expected to contribute to revenue growth in the high single to low-double-digits for fiscal 2026. CSW Industrials plans to continue focusing on sustainable growth, strategic acquisitions, and operational excellence to drive future success, with a commitment to enhancing shareholder value as they transition to the New York Stock Exchange.CSW Industrials Corporate Events
Delistings and Listing ChangesM&A Transactions
CSW Industrials Completes Merger with Aspen Manufacturing
Positive
May 1, 2025
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.
M&A TransactionsBusiness Operations and Strategy
CSW Industrials Expands with Aspen Manufacturing Acquisition
Positive
Mar 18, 2025
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.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.