Industrial products company CSW (NASDAQ: CSW) fell short of the markets revenue expectations in Q4 CY2025, but sales rose 20.3% year on year to $233 million. Its non-GAAP profit of $1.42 per share was 24.3% below analysts’ consensus estimates.
Is now the time to buy CSW? Find out by accessing our full research report, it’s free.
CSW (CSW) Q4 CY2025 Highlights:
- Revenue: $233 million vs analyst estimates of $251.2 million (20.3% year-on-year growth, 7.3% miss)
- Adjusted EPS: $1.42 vs analyst expectations of $1.87 (24.3% miss)
- Adjusted EBITDA: $44.81 million vs analyst estimates of $53.77 million (19.2% margin, 16.7% miss)
- Operating Margin: 7.4%, down from 15.9% in the same quarter last year
- Free Cash Flow Margin: 9.8%, up from 4.4% in the same quarter last year
- Market Capitalization: $4.95 billion
Company Overview
With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSW) offers special chemicals, coatings, sealants, and lubricants for various industries.
Revenue Growth
Reviewing a company’s long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but the best consistently grow over the long haul. Over the last five years, CSW grew its sales at an incredible 21.2% compounded annual growth rate. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.
Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. CSW’s annualized revenue growth of 13.6% over the last two years is below its five-year trend, but we still think the results suggest healthy demand. 
This quarter, CSW generated an excellent 20.3% year-on-year revenue growth rate, but its $233 million of revenue fell short of Wall Street’s high expectations.
Looking ahead, sell-side analysts expect revenue to grow 29.1% over the next 12 months, an improvement versus the last two years. This projection is eye-popping and indicates its newer products and services will catalyze better top-line performance.
Microsoft, Alphabet, Coca-Cola, Monster Beverage—all began as under-the-radar growth stories riding a massive trend. We’ve identified the next one: a profitable AI semiconductor play Wall Street is still overlooking. Go here for access to our full report.
Operating Margin
CSW has been a well-oiled machine over the last five years. It demonstrated elite profitability for an industrials business, boasting an average operating margin of 18.7%. This result isn’t surprising as its high gross margin gives it a favorable starting point.
Analyzing the trend in its profitability, CSW’s operating margin rose by 1.1 percentage points over the last five years, as its sales growth gave it operating leverage.
This quarter, CSW generated an operating margin profit margin of 7.4%, down 8.4 percentage points year on year. Since CSW’s operating margin decreased more than its gross margin, we can assume it was less efficient because expenses such as marketing, R&D, and administrative overhead increased.
Earnings Per Share
We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.
CSW’s EPS grew at an astounding 25.6% compounded annual growth rate over the last five years, higher than its 21.2% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.
Diving into the nuances of CSW’s earnings can give us a better understanding of its performance. As we mentioned earlier, CSW’s operating margin declined this quarter but expanded by 1.1 percentage points over the last five years. This was the most relevant factor (aside from the revenue impact) behind its higher earnings; interest expenses and taxes can also affect EPS but don’t tell us as much about a company’s fundamentals.
Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.
For CSW, its two-year annual EPS growth of 20.5% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.
In Q4, CSW reported adjusted EPS of $1.42, down from $1.60 in the same quarter last year. This print missed analysts’ estimates, but we care more about long-term adjusted EPS growth than short-term movements. Over the next 12 months, Wall Street expects CSW’s full-year EPS of $9.05 to grow 28.6%.
Key Takeaways from CSW’s Q4 Results
We struggled to find many positives in these results. Its revenue missed and its EBITDA fell short of Wall Street’s estimates. Overall, this was a softer quarter. The stock traded down 3.3% to $290 immediately after reporting.
The latest quarter from CSW’s wasn’t that good. One earnings report doesn’t define a company’s quality, though, so let’s explore whether the stock is a buy at the current price. When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here (it’s free).
