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Verdict
Quantitative factor alignment verified for current market regime.
Quant Score
Rank
#2691
Positioning
Market Dominance
Manufacturing
Chemicals
$4.9B
Joseph B. Armes
CSW Industrials, Inc. operates as a diversified industrial company in the United States and internationally. The Industrial Products segment offers specialty mechanical products; grilles, registers, and diffusers. The Specialty Chemicals segment offers lubricants and greases, drilling compounds, anti-seize compounds, and other products for general industrial applications.
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Dates updated upon official exchange announcement.
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X-AXIS: EV/EBITDA (LOWER = CHEAPER) | Y-AXIS: ROE (HIGHER = ELITE) | RED CIRCLE = CSW ANALYSIS TARGET
| Stock | Rating | Score▼ | Quality | Value | Momentum | P/E | EV/EBITDA | ROE | ROA | Gross Mgn | Op Mgn | Net Mgn | Rev Growth | Div Yield | D/E | Mkt Cap | AUDIT |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
$UL UNILEVER PLC | 78 | 96 | 98 | 59 | - | - | 28.5% | 8.0% | 100.0% | 100.0% | 10.4% | -4.6% | 3.3% | 0.0x | $141.8B | VS | |
$ASML ASML HOLDING NV | 77 | 89 | 86 | 83 | - | - | 46.1% | 16.6% | 51.3% | 31.9% | 26.8% | -4.0% | 1.0% | 25.0x | $272.1B | VS | |
$ESLT ELBIT SYSTEMS LTD | 76 | 81 | 87 | 85 | - | - | 10.3% | 3.1% | 24.1% | 7.2% | 4.7% | 14.3% | 0.8% | 25.0x | $11.4B | VS | |
$MT ArcelorMittal | 75 | 71 | 98 | 85 | - | - | 2.2% | 1.5% | 9.3% | 5.3% | 2.2% | -8.5% | 2.2% | 16.0x | $18.9B | VS | |
$AMAT APPLIED MATERIALS INC /DE | 75 | 85 | 87 | 84 | 20.9x | 13.6x | 35.5% | 19.8% | 48.7% | 29.2% | 24.7% | 4.4% | 0.8% | 32.0x | $181.9B | VS | |
$SIMO Silicon Motion Technology CORP | 75 | 84 | 86 | 85 | - | - | 11.8% | 8.8% | 45.9% | 11.3% | 11.1% | 25.7% | 3.7% | 0.0x | $1.8B | VS | |
$CODA Coda Octopus Group, Inc. | 74 | 83 | 90 | 79 | 16.3x | 11.9x | 7.6% | 7.0% | 66.5% | 17.1% | 15.6% | 39.0% | 0.0% | 0.0x | $115M | VS | |
$GSK GSK plc | 74 | 84 | 90 | 70 | - | - | 22.6% | 4.9% | 71.2% | 12.8% | 9.4% | 1.7% | 5.9% | 124.0x | $72.1B | VS | |
$EFXT Enerflex Ltd. | 74 | 80 | 91 | 83 | - | - | 3.0% | 1.1% | 20.9% | 7.3% | 1.3% | 3.0% | 0.9% | 67.0x | $1.2B | VS | |
$BUD Anheuser-Busch InBev SA/NV | 74 | 84 | 97 | 63 | - | - | 8.2% | 3.5% | 55.3% | 25.9% | 12.4% | 0.7% | 1.7% | 0.0x | $87.0B | VS | |
$CSW CSW INDUSTRIALS, INC. | 46 | 44 | 47 | 55 | 49.9x | 32.5x | 9.6% | 4.5% | 41.4% | 14.0% | 9.6% | -11.6% | 0.4% | 75.0x | $4.9B | ||
| SECTOR BENCH | - | - | - | - | - | 22.3x | 11.5x | -2.5% | -0.1% | 42.5% | 1.3% | -0.2% | 5.9% | 0.0% | 0.2x | - | REF |
CSW INDUSTRIALS, INC. (CSW) receives a "Reduce" rating with a composite score of 45.7/100. It ranks #2691 out of 7,333 stocks in our coverage universe and carries a 2-star rating. Ratings are driven by a 6-factor quantitative model measuring quality, value, momentum, investment, stability, and short interest.
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YOY expansion rate
Core pricing power
Operating efficiency
Bottom-line conversion
Equity capital efficiency
Asset base utilization
Financial leverage load
Direct cash return
Joseph B. Armes
Chief Executive Officer
Labor Force
2,400
44
22
66
Audit Verdict: Lower quality and stability scores may indicate governance concerns.
No recent insider transactions available for CSW
In-line with peers — no strong momentum signal
Fair valuation relative to peers
Average quality profile
Low volatility — smoother ride and historically better risk-adjusted returns
Aggressive spending — empire-building risk, dilutive growth
Mid-range overall rating
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Relative valuation derived from Manufacturing sector benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Re-calculated daily.
Projection based on user-defined inputs. Re-calculated daily against current market data.
Reverse DCF Framework — Mauboussin Methodology
Institutional-grade Reverse DCF analysis. This model identifies the growth hurdles embedded in current market prices. When implied growth is significantly lower than historical or projected rates, a margin of safety may exist. Re-audited daily.
No analyst ratings for CSW.
View All RatingsMaterial decline in asset turnover efficiency detected
| Factor | Global | Sector | Tilt |
|---|---|---|---|
| PROFITABILITY | 44 | 21 | +23ALPHA |
| MOMENTUM | 55 | 46 | +9ALPHA |
| VALUATION | 47 | 24 | +23ALPHA |
| INVESTMENT | 22 | 4 | +18ALPHA |
| STABILITY | 66 | 58 | +8ALPHA |
| SHORT INT | 27 | 12 | +15ALPHA |
Global = full universe. Sector = relative to industry peers. Positive tilt indicates idiosyncratic strength.
ROIC 2.3% vs WACC 9.1% (spread -6.8%)
GM 41% vs sector 43%, OM 14% vs sector 1%
Capital turnover 0.31x
Rev growth -12%, 11yr history
Interest coverage N/A, Net debt/EBITDA 21.4x
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation and elite competitive moats.
Profit generated per dollar of shareholder equity
Efficiency of asset utilization
Pricing power and cost efficiency
Core business profitability
Bottom-line profitability
The Quality factor evaluates the persistence and magnitude of realized cash flows. Companies with scores >70 exhibit superior pricing power and structural financial resilience through diverse economic regimes.
Our uncertainty rating tracks the predictability of future cash flows and potential for permanent capital loss. Moderate visibility with standard industry cyclicality.
CSW INDUSTRIALS, INC. receives a Reduce rating from our analysis, with a composite score of 45.7/100 and 2 out of 5 stars, ranking #2691 out of 7,333 stocks. CSW's factor profile shows weakness across multiple dimensions, suggesting the stock may underperform going forward. Existing holders may want to consider trimming positions or tightening stop-losses.
CSW's quality score of 44/100 is below average, suggesting challenges with profitability or capital efficiency. The company reports a return on equity of 9.6% (sector avg: -2.5%), gross margins of 41.4% (sector avg: 42.5%), net margins of 9.6% (sector avg: -0.2%). Investors should examine whether management is actively addressing these weaknesses or if they reflect structural industry headwinds.
With a value score of 47/100, CSW appears somewhat expensive relative to its fundamentals. Key valuation metrics include a P/E ratio of 49.88x, an EV/EBITDA of 32.55x, a P/B ratio of 4.81x. Investors paying a premium here are likely betting on above-average growth or margin expansion to justify current prices.
CSW INDUSTRIALS, INC.'s investment score of 22/100 suggests limited reinvestment activity. Key growth metrics include revenue growth of -11.6% vs. a sector average of 5.9% and a return on assets of 4.5% (sector: -0.1%). While this can be positive for mature, cash-generative businesses returning capital to shareholders, it may also signal a lack of growth opportunities or management conservatism.
CSW demonstrates moderate momentum with a score of 55/100, suggesting a neutral price trend without strong directional conviction. Revenue growth stands at -11.6% year-over-year, while a beta of 1.30 reflects its sensitivity to broader market moves. Moderate momentum may indicate the stock is consolidating or transitioning between trends, warranting close monitoring of upcoming catalysts.
CSW shows good financial stability with a score of 66/100. Key stability metrics include a beta of 1.30 and a debt-to-equity ratio of 75.00x (sector avg: 0.2x). This suggests manageable leverage and moderate price volatility, making it appropriate for investors seeking a balance between growth potential and capital preservation.
CSW INDUSTRIALS, INC.'s short interest score of 27/100 reveals significant bearish positioning, suggesting institutional investors are actively betting against the stock. Specific risk factors include above-average market sensitivity (beta: 1.30), elevated leverage (D/E: 75.00x). At $4.9B (mid-cap), CSW carries meaningful risk and is best suited for investors with high risk tolerance who have thoroughly evaluated the bear thesis.
CSW offers a modest dividend yield of 0.4%. While the income contribution is relatively small, even a small dividend signals management's commitment to shareholder returns and can serve as a signal of financial discipline.
CSW INDUSTRIALS, INC. is a mid-cap company in the Manufacturing sector, ranked #0 of 50 in its sector (100th percentile) and #2691 of 7,333 overall (63rd percentile). Key comparisons include ROE of 9.6% exceeding the -2.5% sector median and operating margins of 14.0% above the 1.3% sector average. This top-quartile standing reflects exceptional competitive strength relative to Manufacturing peers.
While CSW currently exhibits a REDUCE profile, superior opportunities exist within the MANUFACTURING sector. Our model identifies several "Strong Buy" candidates with higher quality scores and more attractive valuations among direct industry competitors.
View Top Manufacturing Alpha →Quant Factor Profile
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Improvement in Investment (22) would have the largest impact on the composite score.
EV/EBITDA 184% ABOVE SECTOR MEDIAN
ROE 489% BELOW SECTOR MEDIAN
Gross Margin IN LINE WITH SECTOR BENCHMARKS
AUDIT DATA AS OF DEC 31, 2025 (Q3 FY2025)
We rate CSW INDUSTRIALS, INC. (CSW) as a Reduce with a composite score of 45.7/100 at a current price of $303.78. The quantitative profile shows weakness across multiple dimensions, suggesting limited upside potential and elevated risk of underperformance relative to peers over the next 12 months.
The rating is primarily driven by strength in stability (66th percentile) and momentum (55th percentile), which together account for the majority of the composite score. Offsetting weakness in investment (22th percentile) and quality (44th percentile) tempers our overall conviction. We assign a No Moat rating (35/100), Medium uncertainty, and Poor capital allocation.
Key items to watch: quarterly earnings execution and sector-level competitive dynamics. Any material change in these dynamics could warrant a reassessment of our rating. The moat trend is stable, which suggests the competitive landscape is stable for now.
CSW INDUSTRIALS, INC. holds a top-quartile position (#0 of 50) within the Manufacturing sector, based on our composite quantitative scoring across quality, value, momentum, and stability factors. The composite score of 45.7/100 places it at rank #2691 in our full 7,333-stock universe. At $4.9B in market capitalization, CSW INDUSTRIALS, INC. is a mid-cap player in the Manufacturing space, which limits certain scale advantages but may allow for more agile strategic execution.
Revenue contraction of -12% combined with momentum at the 55th percentile paints a cautious picture of the near-term business outlook. The market appears to be pricing in continued challenges, and a catalyst for reversal is not clearly visible from current data.
The margin cascade tells an important story: gross margins of 41% (-1.1pp vs sector) narrow to operating margins of 14% (+12.7pp vs sector) and net margins of 9.6%, yielding a gross-to-net conversion rate of 23%. This conversion rate is typical for the sector, suggesting a standard cost structure without notable efficiency advantages or disadvantages.
At a current price of $303.78, CSW INDUSTRIALS, INC. is trading near fair value based on current fundamentals. Our value factor score of 47/100 reflects a composite assessment across multiple valuation metrics including price-to-earnings, price-to-book, EV/EBITDA, and price-to-sales ratios relative to both sector peers and the broader market. Valuation metrics are mixed, with no strong signal of mispricing in either direction.
The stock currently trades at a P/E of 49.9x (a 124% premium to the sector median of 22.3x), EV/EBITDA of 32.5x (at a premium), P/B of 4.8x, P/S of 5.0x. The above-sector P/E multiple suggests the market is pricing in superior growth or quality, which our analysis finds only partially justified by current fundamentals.
Gross margins of 41% signal strong pricing power and brand/IP advantages — businesses with margins above 40% have historically demonstrated more resilient earnings through economic cycles.
The Reduce rating (composite 45.7/100) reflects multi-factor weakness, and historically, stocks in this scoring range have underperformed the market by a meaningful margin.
A P/E of 49.9x leaves little room for execution misses — any earnings disappointment could trigger a sharp multiple compression.
Revenue decline of -12% signals business deterioration — declining revenues make it difficult to grow into the current valuation and often precede further negative revisions.
We assign a Medium uncertainty rating to CSW INDUSTRIALS, INC.. The stock presents a balanced risk profile: elevated market sensitivity (beta of 1.30) and elevated valuation multiple (P/E 49.9x) that leaves limited margin for error. While not risk-free, the core business fundamentals are adequate to withstand moderate economic stress, and the range of potential outcomes around our fair value estimate is manageable.
Specific risk factors that inform our assessment include: elevated market sensitivity (beta of 1.30); elevated valuation multiple (P/E 49.9x) that leaves limited margin for error. Each of these factors independently widens the distribution of potential outcomes, and in combination they create a risk profile that demands careful position sizing. The stability factor at the 66th percentile and quality factor at the 44th percentile provide a quantitative summary of the overall risk landscape.
Key risk mitigants include: healthy gross margins of 41% provide a buffer against cost pressures; above-average stability (66th percentile) suggests predictable business dynamics. These factors partially offset the identified risks and provide downside protection in adverse scenarios. On balance, the risk-reward profile is favorable for long-term investors.
We rate CSW INDUSTRIALS, INC.'s capital allocation as Poor. Key concerns include suboptimal returns on capital. Exemplary capital allocators generate ROE above 20% and maintain conservative leverage — CSW INDUSTRIALS, INC. significantly underperforms these benchmarks, raising questions about management's ability to create shareholder value.
Investors should scrutinize management's reinvestment decisions and balance sheet trajectory before committing capital. Poor capital allocation often compounds over time: overlevered balance sheets limit strategic flexibility, while low returns on capital destroy shareholder value. We would need to see sustained improvement in profitability metrics and balance sheet discipline before considering an upgrade.
In summary, CSW INDUSTRIALS, INC. receives a Reduce rating with a composite score of 45.7/100 (rank #2691 of 7,333). Our quantitative framework assigns a No Moat (35/100, trend: stable), Medium uncertainty, and Poor capital allocation. The average factor score across quality, value, momentum, stability, and investment is 46/100.
Our analysis does not support a constructive view on CSW INDUSTRIALS, INC. at this time. The combination of limited competitive advantages, medium uncertainty, and poor capital allocation suggests unfavorable risk-reward at current levels. We recommend investors avoid new positions and existing holders consider reducing exposure.
Analysis derived from Blank Capital Research quantitative terminal. For informational purposes only. No trade solicitation. Past performance not indicative of future results. Consult a qualified advisor.
We do not assign CSW INDUSTRIALS, INC. a meaningful economic moat, scoring 35/100 on our composite assessment. The ROIC-WACC spread of -6.8% is the primary signal of economic value creation. Current fundamentals do not demonstrate the kind of durable competitive advantages — such as superior returns on invested capital, margin superiority, or reinvestment efficiency — that would protect the company from competitive erosion over the long term. The highest-scoring pillar, margin superiority, reached only 14.6/20.
The strongest moat sources are margin superiority (14.6/20) and growth durability (10.5/20). GM 41% vs sector 43%, OM 14% vs sector 1%. Rev growth -12%, 11yr history. These pillars form the core of CSW INDUSTRIALS, INC.'s competitive identity and are the primary drivers of excess returns in our framework.
Areas of relative weakness include reinvestment efficiency (0/20) and financial resilience (3.2/20). Capital turnover 0.31x. Improvement in these areas could meaningfully widen the moat over time, while deterioration would be an early warning of competitive erosion.
Our moat trend assessment is Stable. Multi-year ROIC and operating margin trajectories show neither meaningful improvement nor deterioration, suggesting the competitive position is steady. We expect CSW INDUSTRIALS, INC.'s moat profile to remain largely unchanged absent a material shift in return on capital or industry dynamics.
Key profit drivers include gross margins of 41% providing a solid profitability foundation, operating margins of 14% reflecting effective cost management, declining revenues (-12%) that pressure the earnings outlook. The margin cascade from 41% gross to 14% operating to 9.6% net reveals the company's cost structure and reinvestment intensity. Our analysis indicates that profit quality is adequate though not exceptional, with the quality factor at the 44th percentile.
The margin profile shows gross margins of 41%, operating margins of 14%, net margins of 9.6%. Return metrics include ROE of 9.6% and ROA of 4.5%. Relative to the Manufacturing sector, gross margins are 1.1 percentage points below the sector median of 43%, and ROE of 9.6% compares to a sector median of -2.5%.
The balance sheet reflects moderate leverage with D/E of 75%, a dividend yield of 0.36%, revenue growth of -12%. The sector median D/E is 0%, putting CSW INDUSTRIALS, INC. at higher leverage than the typical peer. Overall balance sheet health is adequate for the current business environment.
Above 50MA
37.18%
Net New Highs
+51081
In recent weeks, CSW Industrials reported a mixed Q3 update with softer results in Contractor Solutions and residential HVAC/R, while Senior Vice President and General Counsel Luke Alverson sold 500 shares for about US$158,010. The combination of weaker segment trends, tariff and acquisition-related margin pressure, and internal share sales has sharpened investor focus on the quality and resilience of CSW Industrials’ growth drivers. We’ll now examine how these softer Q3 trends and the...
Why CSW Industrials Is Back On Investors’ Radar Investor sentiment toward CSW Industrials (CSW) has shifted, with buyers returning after a stretch of earnings misses, as attention turns to the company’s multi-year revenue and net income growth and longer term outlook. See our latest analysis for CSW Industrials. At a share price of US$309.48, CSW Industrials has recently seen a 6.63% 7 day share price return but a 6.53% 30 day share price decline, while its 90 day share price return of 28.25%...
CSW Industrials reported past third-quarter and nine-month 2025 results showing higher sales of US$232.99 million and US$773.59 million respectively, but materially lower net income and earnings per share compared with the prior year. Alongside these earnings, the company completed a share repurchase of 440,215 shares for US$122.39 million, retiring about 2.63% of its outstanding stock while grappling with acquisition-related costs, higher interest expense, and margin pressure in areas like...
CSW Industrials acquired Hydrotex Holdings and ProAction Fluids for over $26.5 million, expanding its Specialized Reliability Solutions segment and diversifying end markets in specialty lubricants and infrastructure drilling products.