CSW Industrials Inc. Common Stock (CSW)

FairStock Score: 36/100 — MIXED

Key Financials

Strengths

• Generates $81 million in annual free cash flow (1.6% yield on market cap)
• Solid return on equity of 11.9% above cost of capital
• Revenue growth of 20.3% demonstrates strong top-line momentum

Concerns

• Trades significantly above Graham Number ($105) with negative 184% margin of safety—limited downside protection

AI Analysis

CSW Industrials Inc. Common Stock is a small-cap industrials company valued at $5.0 billion. The business generates $1.0 billion in annual revenue with a 1.0% net margin and $81 million in free cash flow. From a quality standpoint, CSW shows healthy Altman Z-Score of 3.3 and adequate 12% ROE. On valuation, the stock is trading at a premium 39.1x earnings, with trades far above its Graham Number ($105) with no margin of safety. Growth dynamics show revenue growing at 20.3% and profit growth of -61.9%. Our composite FairStock Score of 36/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

CSW's 20% revenue growth trajectory could accelerate as it captures additional market share in the industrials sector. With $81 million in annual free cash flow (1.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 39x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer