What a time it’s been for CSW. In the past six months alone, the company’s stock price has increased by a massive 46%, reaching $388.68 per share. This was partly due to its solid quarterly results, and the performance may have investors wondering how to approach the situation.

Following the strength, is CSWI a buy right now? Or is the market overestimating its value? Find out in our full research report, it’s free.

Why Is CSW a Good Business?

With over two centuries of combined operations manufacturing and supplying, CSW (NASDAQ: CSWI) offers special chemicals, coatings, sealants, and lubricants for various industries.

1. Skyrocketing Revenue Shows Strong Momentum

Examining a company’s long-term performance can provide clues about 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 17.7% compounded annual growth rate. Its growth beat the average industrials company and shows its offerings resonate with customers.

2. Outstanding Long-Term EPS Growth

Analyzing the long-term change in earnings per share (EPS) shows whether a company's incremental sales were profitable – for example, revenue could be inflated through excessive spending on advertising and promotions.

CSW’s EPS grew at an astounding 21.2% compounded annual growth rate over the last five years, higher than its 17.7% annualized revenue growth. This tells us the company became more profitable on a per-share basis as it expanded.

3. Excellent Free Cash Flow Margin Boosts Reinvestment Potential

If you’ve followed StockStory for a while, you know we emphasize free cash flow. Why, you ask? We believe that in the end, cash is king, and you can’t use accounting profits to pay the bills.

CSW has shown terrific cash profitability, putting it in an advantageous position to invest in new products, return capital to investors, and consolidate the market during industry downturns. The company’s free cash flow margin was among the best in the industrials sector, averaging 15.9% over the last five years.

Final Judgment

These are just a few reasons why we're bullish on CSW, and with the recent surge, the stock trades at 44.9× forward price-to-earnings (or $388.68 per share). Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

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