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 Trane Technologies (NYSE: TT) 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 Q2. As a group, revenues beat analysts’ consensus estimates by 4.7%.
Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 5.8% since the latest earnings results.
Trane Technologies (NYSE: TT)
With low-pressure heating systems as its first product, Trane (NYSE: TT) designs, manufactures, and sells HVAC and refrigeration systems, the former to commercial and residential building customers and the latter to commercial truck manufacturers.
Trane Technologies reported revenues of $6.35 billion, up 10.6% year on year. This print exceeded analysts’ expectations by 2.3%. Overall, it was a strong quarter for the company with full-year EPS guidance exceeding analysts’ expectations and a narrow beat of analysts’ EPS estimates.
Interestingly, the stock is up 1.3% since reporting and currently trades at $452.44.
Best Q2: 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 $627 million, up 101% year on year, outperforming analysts’ expectations by 24.6%. The business had an incredible quarter with a beat of analysts’ EPS and EBITDA estimates.
AAON pulled off the biggest analyst estimate beat and fastest revenue growth in the group. Although it had a fine quarter compared to its peers, the market seems unhappy with the results as the stock is down 20% since reporting. It currently trades at $75.85.
Is now the time to buy AAON? Access our full analysis of the earnings results here, it’s free.
Weakest Q2: 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 $1.55 billion, up 3% year on year, falling short of analysts’ expectations by 1%. It was a mixed quarter as it posted a solid beat of analysts’ organic revenue estimates but full-year EPS guidance missing analysts’ expectations significantly.
Lennox delivered the weakest performance against analyst estimates of the whole group. As expected, the stock is down 24.9% since the results and currently trades at $408.69.
Read our full analysis of Lennox’s results here.
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 $350.7 million, up 33% year on year. This number topped analysts’ expectations by 2.4%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA and EPS estimates.
The stock is up 21.1% since reporting and currently trades at $330.
Read our full, actionable report on CSW 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 $1.00 billion, up 20.6% year on year. This print beat analysts’ expectations by 2%. It was a very strong quarter as it also recorded an impressive beat of analysts’ EBITDA estimates and a beat of analysts’ EPS estimates.
Advanced Drainage had the weakest full-year guidance update among its peers. The stock is down 5.9% since reporting and currently trades at $140.80.
Read our full, actionable report on Advanced Drainage here, it’s free.
Market Update
Over the past year, investors have been forced to repeatedly answer the same question: what is the market’s biggest risk? The answer has changed several times, and each shift has reshaped market leadership.
Late in 2025 and early 2026, artificial intelligence became the market’s primary uncertainty. Investors questioned whether AI would erode software pricing power and weaken competitive moats as AI made it easier to replicate once-differentiated products.
By the spring, technology took a back seat to geopolitics. The U.S. conflict with Iran briefly became the market’s dominant narrative, raising concerns about oil prices, inflation, and global growth. But as energy markets remained orderly and fears of a prolonged supply disruption faded, investors quickly turned their focus back to fundamentals.
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.
