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Yahoo
05-06-2025
- Business
- Yahoo
HVAC and Water Systems Stocks Q1 Results: Benchmarking Northwest Pipe (NASDAQ:NWPX)
Quarterly earnings results are a good time to check in on a company's progress, especially compared to its peers in the same sector. Today we are looking at Northwest Pipe (NASDAQ:NWPX) and the best and worst performers in the hvac and water systems industry. Many HVAC and water systems companies sell essential, non-discretionary infrastructure for buildings. Since the useful lives of these water heaters and vents are fairly standard, these companies have a portion of predictable replacement revenue. In the last decade, trends in energy efficiency and clean water are driving innovation that is leading to incremental demand. On the other hand, new installations for these companies are at the whim of residential and commercial construction volumes, which tend to be cyclical and can be impacted heavily by economic factors such as interest rates. The 9 hvac and water systems stocks we track reported a satisfactory Q1. As a group, revenues beat analysts' consensus estimates by 2.1% while next quarter's revenue guidance was 0.7% below. In light of this news, share prices of the companies have held steady as they are up 4.7% on average since the latest earnings results. Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure. Northwest Pipe reported revenues of $116.1 million, up 2.6% year on year. This print exceeded analysts' expectations by 3.7%. Despite the top-line beat, it was still a slower quarter for the company with a significant miss of analysts' EBITDA and EPS estimates. "In the first quarter of 2025, we encountered a mix of external challenges ranging from weather disruptions across multiple facilities to the uncertainty brought on by new trade policies from the incoming administration," said Scott Montross, President and Chief Executive Officer of Northwest Pipe Company. The stock is down 5.8% since reporting and currently trades at $39.82. Read our full report on Northwest Pipe here, it's free. Backed by two million square feet of lab testing space, AAON (NASDAQ:AAON) makes heating, ventilation, and air conditioning equipment for different types of buildings. AAON reported revenues of $322.1 million, up 22.9% year on year, outperforming analysts' expectations by 10.9%. The business had an incredible quarter with a solid beat of analysts' EPS estimates and an impressive beat of analysts' EBITDA estimates. AAON delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 5.4% since reporting. It currently trades at $96.04. Is now the time to buy AAON? Access our full analysis of the earnings results here, it's free. Originally started as a farm water drainage company, Advanced Drainage Systems (NYSE:WMS) provides clean water management solutions to communities across America. Advanced Drainage reported revenues of $615.8 million, down 5.8% year on year, falling short of analysts' expectations by 6.8%. It was a disappointing quarter as it posted a miss of analysts' Infiltrators revenue estimates and full-year revenue guidance missing analysts' expectations. Advanced Drainage delivered the weakest performance against analyst estimates, slowest revenue growth, and weakest full-year guidance update in the group. As expected, the stock is down 7% since the results and currently trades at $113.15. Read our full analysis of Advanced Drainage's results here. Claiming to have saved more than 30 billion gallons of water, Zurn Elkay (NYSE:ZWS) provides water management solutions to various industries. Zurn Elkay reported revenues of $388.8 million, up 4% year on year. This print topped analysts' expectations by 1.4%. Taking a step back, it was a mixed quarter as it also recorded an impressive beat of analysts' adjusted operating income estimates but a significant miss of analysts' organic revenue estimates. The stock is up 16.2% since reporting and currently trades at $36.16. Read our full, actionable report on Zurn Elkay here, it's free. With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ:CSWI) offers special chemicals, coatings, sealants, and lubricants for various industries. CSW reported revenues of $230.5 million, up 9.3% year on year. This result missed analysts' expectations by 1%. It was a slower quarter as it also produced a slight miss of analysts' EBITDA estimates. The stock is down 3.3% since reporting and currently trades at $304.19. Read our full, actionable report on CSW here, it's free. The Fed's interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump's presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025. Want to invest in winners with rock-solid fundamentals? Check out our Top 6 Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
Yahoo
01-05-2025
- Business
- Yahoo
Northwest Pipe (NASDAQ:NWPX) Posts Better-Than-Expected Sales In Q1
Water management company Northwest Pipe (NASDAQ:NWPX) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 2.6% year on year to $116.1 million. Its GAAP profit of $0.39 per share was 26.9% below analysts' consensus estimates. Is now the time to buy Northwest Pipe? Find out in our full research report. Revenue: $116.1 million vs analyst estimates of $111.9 million (2.6% year-on-year growth, 3.7% beat) EPS (GAAP): $0.39 vs analyst expectations of $0.53 (26.9% miss) Adjusted EBITDA: $10.12 million vs analyst estimates of $13.2 million (8.7% margin, 23.3% miss) Operating Margin: 4.8%, down from 7.7% in the same quarter last year Free Cash Flow was $1.18 million, up from -$30.66 million in the same quarter last year Market Capitalization: $424.8 million "In the first quarter of 2025, we encountered a mix of external challenges ranging from weather disruptions across multiple facilities to the uncertainty brought on by new trade policies from the incoming administration," said Scott Montross, President and Chief Executive Officer of Northwest Pipe Company. Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure. Reviewing a company's long-term sales performance reveals insights into its quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Northwest Pipe's sales grew at an impressive 11.6% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers. Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Northwest Pipe's recent performance shows its demand has slowed significantly as its annualized revenue growth of 5.2% over the last two years was well below its five-year trend. This quarter, Northwest Pipe reported modest year-on-year revenue growth of 2.6% but beat Wall Street's estimates by 3.7%. Looking ahead, sell-side analysts expect revenue to remain flat over the next 12 months, a deceleration versus the last two years. This projection doesn't excite us and suggests its products and services will face some demand challenges. Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we've identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link. Northwest Pipe has done a decent job managing its cost base over the last five years. The company has produced an average operating margin of 8.5%, higher than the broader industrials sector. Analyzing the trend in its profitability, Northwest Pipe's operating margin might fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company's expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability. This quarter, Northwest Pipe generated an operating profit margin of 4.8%, down 2.9 percentage points year on year. Since Northwest Pipe'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. Revenue trends explain a company's historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth – for example, a company could inflate its sales through excessive spending on advertising and promotions. Northwest Pipe's EPS grew at a weak 4% compounded annual growth rate over the last five years, lower than its 11.6% annualized revenue growth. However, its operating margin didn't change during this time, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings. Diving into the nuances of Northwest Pipe's earnings can give us a better understanding of its performance. A five-year view shows Northwest Pipe has diluted its shareholders, growing its share count by 2.9%. This has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don't tell us as much about a company's fundamentals. Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business. For Northwest Pipe, its two-year annual EPS growth of 4.8% is similar to its five-year trend, implying stable earnings. In Q1, Northwest Pipe reported EPS at $0.39, down from $0.52 in the same quarter last year. This print missed analysts' estimates. Over the next 12 months, Wall Street expects Northwest Pipe's full-year EPS of $3.27 to grow 5.2%. We were impressed by how significantly Northwest Pipe blew past analysts' revenue expectations this quarter. On the other hand, its EPS and EBITDA missed significantly. Overall, this quarter could have been better, but the stock traded up 3.1% to $43.59 immediately following the results. Is Northwest Pipe an attractive investment opportunity right now? We think that the latest quarter is just one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here, it's free.
Yahoo
07-04-2025
- Business
- Yahoo
3 Industrials Stocks Walking a Fine Line
Industrials businesses quietly power the physical things we depend on, from cars and homes to e-commerce infrastructure. Still, their generally high capital requirements expose them to the ups and downs of economic cycles, and the market seems to be baking in a prolonged downturn as the industry has shed 20.6% over the past six months. This performance was worse than the S&P 500's 12.8% fall. Investors should tread carefully as timing cyclical companies is a challenging task, and any misstep can have you catching a falling knife. Taking that into account, here are three industrials stocks we're passing on. Market Cap: $394.3 million Playing a large role in the Integrated Pipeline (IPL) project in Texas to deliver ~350 million gallons of water per day, Northwest Pipe (NASDAQ:NWPX) is a manufacturer of pipeline systems for water infrastructure. Why Should You Sell NWPX? Sales trends were unexciting over the last two years as its 3.7% annual growth was below the typical industrials company Performance over the past two years shows its incremental sales were much less profitable, as its earnings per share fell by 2.9% annually Free cash flow margin dropped by 7.8 percentage points over the last five years, implying the company became more capital intensive as competition picked up Northwest Pipe's stock price of $38.07 implies a valuation ratio of 11.6x forward price-to-earnings. Read our free research report to see why you should think twice about including NWPX in your portfolio, it's free. Market Cap: $16.51 billion Founded in 1920, Snap-on (NYSE:SNA) is a global provider of tools, equipment, and diagnostics for various industries such as vehicle repair, aerospace, and the military. Why Do We Think Twice About SNA? Core business is underperforming as its organic revenue has disappointed over the past two years, suggesting it might need acquisitions to stimulate growth Demand will likely be soft over the next 12 months as Wall Street's estimates imply tepid growth of 2.7% 4.2 percentage point decline in its free cash flow margin over the last five years reflects the company's increased investments to defend its market position Snap-on is trading at $309.37 per share, or 15.5x forward price-to-earnings. If you're considering SNA for your portfolio, see our FREE research report to learn more. Market Cap: $12.84 billion Founded in 1926, Graco (NYSE:GGG) is an industrial company specializing in the development and manufacturing of fluid-handling systems and products. Why Are We Wary of GGG? Flat sales over the last two years suggest it must find different ways to grow during this cycle Earnings growth over the last two years fell short of the peer group average as its EPS only increased by 2.3% annually Waning returns on capital imply its previous profit engines are losing steam At $74.01 per share, Graco trades at 24.6x forward price-to-earnings. To fully understand why you should be careful with GGG, check out our full research report (it's free). Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 5 Growth Stocks for this month. This is a curated list of our High Quality stocks that have generated a market-beating return of 175% over the last five years. Stocks that made our list in 2019 include now familiar names such as Nvidia (+2,183% between December 2019 and December 2024) as well as under-the-radar businesses like Axon (+711% five-year return). Find your next big winner with StockStory today for free. Sign in to access your portfolio
