The end of an earnings season can be a great time to discover new stocks and assess how companies are handling the current business environment. Let’s take a look at how Advanced Drainage (NYSE: WMS) and the rest of the hvac and water systems stocks fared in Q4.

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 slower Q4. As a group, revenues were in line with analysts’ consensus estimates.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6.9% since the latest earnings results.

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 $693.4 million, flat year on year. This print exceeded analysts’ expectations by 1.1%. Overall, it was a very strong quarter for the company with a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ EBITDA estimates.

Scott Barbour, President and Chief Executive Officer of ADS commented, "We delivered our third consecutive strong quarter in a demand environment that is both challenging and mixed by geography. The Infiltrator business and Allied products portfolio grew significantly above-market as we continue to introduce new products, distribution and customer programs. Notably, profitability increased across all facets of the business, including pipe, Allied products and the Infiltrator business. We continue to strategically shift our portfolio mix towards higher margin products, which strengthens the resiliency of our business. This mix shift, in conjunction with favorable price/cost dynamics, resulted in an Adjusted EBITDA margin of 30.2% for the quarter. "

Advanced Drainage delivered the weakest full-year guidance update of the whole group. Unsurprisingly, the stock is down 12.8% since reporting and currently trades at $139.77.

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

Best Q4: Northwest Pipe (NASDAQ: NWPX)

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 $125.6 million, up 5% year on year, outperforming analysts’ expectations by 2.8%. The business had a stunning quarter with a beat of analysts’ EPS estimates and an impressive beat of analysts’ revenue estimates.

However, the results were likely priced into the stock as it’s traded sideways since reporting. Shares currently sit at $73.43.

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

Weakest Q4: 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 $233 million, up 20.3% year on year, falling short of analysts’ expectations by 6%. It was a disappointing quarter as it posted a significant miss of analysts’ revenue estimates and a significant miss of analysts’ adjusted operating income estimates.

CSW delivered the weakest performance against analyst estimates in the group. As expected, the stock is down 13.2% since the results and currently trades at $260.36.

Read our full analysis of CSW’s results here.

Zurn Elkay (NYSE: ZWS)

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 $407.2 million, up 9.8% year on year. This result beat analysts’ expectations by 1.4%. It was a very strong quarter as it also produced a solid beat of analysts’ adjusted operating income estimates and an impressive beat of analysts’ revenue estimates.

The stock is down 3.9% since reporting and currently trades at $45.22.

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

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 $424.2 million, up 42.5% year on year. This print surpassed analysts’ expectations by 13.4%. Zooming out, it was a slower quarter as it logged a significant miss of analysts’ EBITDA estimates and a significant miss of analysts’ EPS estimates.

AAON delivered the biggest analyst estimates beat and fastest revenue growth among its peers. The stock is down 21.4% since reporting and currently trades at $79.53.

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

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