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 CSW (NYSE: CSW) 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 very strong Q1. As a group, revenues beat analysts’ consensus estimates by 6.9%.

Luckily, hvac and water systems stocks have performed well with share prices up 11.3% on average since the latest earnings results.

CSW (NYSE: CSW)

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

CSW reported revenues of $309 million, up 34% year on year. This print exceeded analysts’ expectations by 1.7%. Overall, it was a stunning quarter for the company with a beat of analysts’ EPS and EBITDA estimates.

Joseph B. Armes, CSW Industrials’ Chairman, President, and Chief Executive Officer, commented, "I am pleased to report all-time record revenue and adjusted EBITDA for the fiscal fourth quarter and full fiscal year 2026, while also delivering record adjusted EPS. Reaching one billion dollars in annual revenue in just ten years is a milestone worth celebrating. These record setting results are attributable to CSW's successful growth strategy, which was accelerated by the recent acquisition and integration of businesses in two of our three reporting segments. Our Contractor Solutions segment strengthened its HVAC/R and electrical product offerings while our SRS segment further diversified its end market exposures. In addition, during the fiscal fourth quarter, our Contractor Solutions segment completed the strategic acquisition of Duckt-Strip, creating an immediate opportunity to accelerate sales growth on a differentiated electrical cable in the fast-growing HVAC mini-split market."

Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 3.3% since reporting and currently trades at $268.76.

Read why we think that CSW is one of the best hvac and water systems stocks, our full report is free.

Best Q1: AAON (NASDAQ: AAON)

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 $496.9 million, up 54.3% year on year, outperforming analysts’ expectations by 29.5%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.

AAON achieved the biggest analyst estimate beat and fastest revenue growth among its peers. The market seems happy with the results as the stock is up 31.7% since reporting. It currently trades at $129.46.

Is now the time to buy AAON? Access our full analysis of the earnings results here, it’s free.

Weakest Q1: A. O. Smith (NYSE: AOS)

Credited with the invention of the glass-lined water heater, A.O. Smith (NYSE: AOS) manufactures water heating and treatment products for various industries.

A. O. Smith reported revenues of $945.6 million, down 1.9% year on year, falling short of analysts’ expectations by 3.5%. It was a disappointing quarter as it posted full-year EPS guidance missing analysts’ expectations and a significant miss of analysts’ adjusted operating income estimates.

A. O. Smith 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 9.8% since the results and currently trades at $57.44.

Read our full analysis of A. O. Smith’s results here.

Lennox (NYSE: LII)

Based in Texas and founded over a century ago, Lennox (NYSE: LII) is a climate control solutions company offering heating, ventilation, air conditioning, and refrigeration (HVACR) goods.

Lennox reported revenues of $1.14 billion, up 5.8% year on year. This print topped analysts’ expectations by 6.7%. Overall, it was an exceptional quarter as it also recorded an impressive beat of analysts’ organic revenue and adjusted operating income estimates.

The stock is up 5.7% since reporting and currently trades at $523.55.

Read our full, actionable report on Lennox here, it’s free.

Advanced Drainage (NYSE: WMS)

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 $676.8 million, up 9.9% year on year. This number surpassed analysts’ expectations by 3.8%. It was a strong quarter as it also put up an impressive beat of analysts’ EBITDA estimates.

Advanced Drainage pulled off the highest full-year guidance raise among its peers. The stock is up 2.1% since reporting and currently trades at $139.66.

Read our full, actionable report on Advanced Drainage here, it’s free.

Market Update

Late in 2025 into early 2026, there was hand-wringing around artificial intelligence. For software companies, the fear was that AI would erode pricing power and compress margins as new tools made it easier to replicate what once required expensive enterprise platforms. Crypto investors had their own version of the same anxiety: if AI agents could trade, allocate capital, and manage wallets autonomously, what exactly was the long-term value of today’s crypto infrastructure?

These concerns triggered a noticeable rotation away from these sectors and into safer havens. But markets rarely dwell on one narrative for long. Spring 2026 came, and the focus shifted abruptly from technological disruption to geopolitical risk. The US’ conflict with Iran became the dominant driver of market psychology, and when geopolitics takes center stage, the script changes quickly. Investors stop debating growth rates and start worrying about oil supply, inflation, and global stability.

Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.