CSW Industrials, Inc.: Undervalued, But Limited Upside

Summary

• CSWI's sales have grown almost 25% in the last 3 months compared to the period prior, outpacing expenses, leading to a growth in operating margin.
• Despite this, the share price is not only down on the year but also below peers.
• Using multiple valuation methodologies, we can see that CSWI is discounted and has a potential upside of around 10% or more.
• While there is likely an upside, unfortunately, it is not high enough to give a buy rating, so we recommend holding.

Lim Weixiang - Zeitgeist Photos

Thesis

CSW Industrials, Inc. (NASDAQ:CSWI) has had strong growth in sales, rising by almost 25% in the last quarter compared to the year prior, and due to cost efficiencies and an outpacing of sales growth, operating Margin

Analyst’s Disclosure:I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.