Q4 Financial Peaks and Valleys: Comparing Zurn Elkay (NYSE:ZWS) With Other HVAC and Water System Shares

Q4 Review: HVAC and Water Systems Stocks Performance

As the earnings season winds down, let's revisit some of the standout—and less remarkable—Q4 results among HVAC and water systems companies, beginning with Zurn Elkay (NYSE:ZWS).

Companies in the HVAC and water systems sector typically provide indispensable infrastructure for buildings, such as water heaters and ventilation systems. Because these products have predictable lifespans, a portion of their revenue comes from regular replacements. Over the past ten years, growing interest in energy efficiency and clean water has spurred innovation, gradually increasing demand. However, new installations are closely tied to the cycles of residential and commercial construction, which can fluctuate significantly due to economic conditions like changes in interest rates.

Across the nine HVAC and water systems stocks we monitor, Q4 was generally subdued. Collectively, their revenues matched analyst forecasts.

Although some companies outperformed their peers, the sector as a whole has seen a decline, with average share prices falling 2.5% since the most recent earnings announcements.

Zurn Elkay (NYSE:ZWS) Highlights

Zurn Elkay (NYSE:ZWS), which claims to have conserved over 30 billion gallons of water, delivers water management solutions to a wide range of industries.

For the quarter, Zurn Elkay posted $407.2 million in revenue, marking a 9.8% increase year-over-year and surpassing analyst expectations by 1.4%. The company delivered an impressive quarter, outperforming estimates for both adjusted operating income and revenue.

Todd A. Adams, Chairman and CEO, stated, “We closed 2025 with record-breaking annual sales, adjusted EBITDA, and free cash flow. We also repurchased $160 million of our stock and raised our quarterly dividend by 22% compared to last year. Leveraging the Zurn Elkay Business System, we achieved 8% core sales growth and full-year adjusted EBITDA of $442 million, with margins improving by 120 basis points to 26.1%. Our record free cash flow of $317 million reduced net debt leverage to 0.4x as of December 31, 2025. We end the year with a strong balance sheet and outlook, positioning us to continue creating value for shareholders.”

The market appeared to have anticipated these results, as Zurn Elkay’s stock price has remained steady since the report and is currently at $47.31.

Top Performer Q4: Northwest Pipe (NASDAQ:NWPX)

Northwest Pipe (NASDAQ:NWPX), a key supplier for Texas’s Integrated Pipeline (IPL) project—which delivers approximately 350 million gallons of water daily—manufactures pipeline systems for water infrastructure.

Northwest Pipe reported $125.6 million in revenue for the quarter, a 5% year-over-year increase and 3% above analyst projections. The company had a stellar quarter, beating expectations for both EPS and EBITDA.

Despite the strong results, the stock price has remained largely unchanged since the announcement and is currently trading at $74.18.

Q4 Laggard: CSW (NYSE:CSW)

With over 200 years of combined experience, CSW (NYSE:CSW) specializes in producing chemicals, coatings, sealants, and lubricants for a variety of industries.

CSW’s quarterly revenue reached $233 million, up 20.3% from the previous year, but this figure was 6% below analyst expectations. The company missed both revenue and adjusted operating income estimates, resulting in a disappointing quarter.

CSW delivered the weakest performance relative to analyst forecasts among its peers. As a result, its stock has dropped 11.1% since the earnings release and is now priced at $266.55.

Lennox (NYSE:LII) Overview

Headquartered in Texas and with a history spanning more than 100 years, Lennox (NYSE:LII) provides climate control solutions, including heating, ventilation, air conditioning, and refrigeration products.

Lennox reported $1.20 billion in revenue for the quarter, a decline of 11.2% year-over-year and 5.7% below analyst estimates. The company missed both revenue and adjusted operating income targets, making for a challenging quarter.

Lennox recorded the slowest revenue growth in its group. Despite this, the stock has risen 3.3% since the earnings report and is currently valued at $515.48.

Trane Technologies (NYSE:TT) Snapshot

Trane Technologies (NYSE:TT), which began with low-pressure heating systems, now designs and manufactures HVAC and refrigeration solutions for both commercial and residential buildings, as well as for commercial truck manufacturers.

For Q4, Trane Technologies posted $5.14 billion in revenue, a 5.5% year-over-year increase and 0.8% above analyst expectations. However, the company fell short of EBITDA and adjusted operating income estimates, making it a slower quarter overall.

The stock has climbed 8.4% since the earnings announcement and is now trading at $427.35.

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