(ERII) Energy Recovery - Overview
Sector: Industrials | Industry: Pollution & Treatment Controls | Exchange: NASDAQ (USA) | Market Cap: 456m USD | Total Return: -30.6% in 12m
Avg Turnover: 8.96M
EPS Trend: 77.4%
Qual. Beats: -2
Rev. Trend: 74.8%
Qual. Beats: 0
Warnings
Earnings expected to drop: P/E 23.9 → Forward 126.6
Below Avwap Earnings
Tailwinds
No distinct edge detected
Energy Recovery, Inc. (ERII) specializes in the design and manufacture of energy recovery devices and efficiency technologies for industrial fluid systems. Its primary business involves the production of pressure exchangers and hydraulic turbochargers used to reduce energy consumption in seawater and brackish water desalination. The company has recently expanded its proprietary pressure exchanger technology into the refrigeration sector, specifically targeting CO2-based systems in supermarkets and cold storage facilities.
The company operates within the industrial machinery sector, where high barriers to entry exist due to the specialized engineering required for high-pressure fluid dynamics. ERII’s business model relies on a combination of direct equipment sales to original equipment manufacturers (OEMs) and recurring revenue from aftermarket parts and field services. Desalination remains a critical global infrastructure segment as water scarcity drives demand for energy-efficient purification methods.
For a deeper look into the companys valuation metrics and historical performance, you may want to consult ValueRay. Energy Recovery, Inc. is headquartered in San Leandro, California, and maintains a global distribution network across the Middle East, Asia, and Europe.
- Global desalination market growth drives demand for core Pressure Exchanger products
- Adoption of CO2 refrigeration systems expands revenue via the Emerging Technologies segment
- Municipal infrastructure spending cycles impact large-scale seawater desalination project timelines
- Raw material cost fluctuations for high-grade ceramics influence manufacturing gross margins
- Regulatory shifts toward natural refrigerants accelerate commercial transition to PX G1300 technology
| Net Income: 20.6m TTM > 0 and > 6% of Revenue |
| FCF/TA: 0.13 > 0.02 and ΔFCF/TA 2.34 > 1.0 |
| NWC/Revenue: 105.4% < 20% (prev 96.62%; Δ 8.79% < -1%) |
| CFO/TA 0.14 > 3% & CFO 29.1m > Net Income 20.6m |
| Net Debt (-77.3m) to EBITDA (38.8m): -1.99 < 3 |
| Current Ratio: 9.28 > 1.5 & < 3 |
| Outstanding Shares: last quarter (52.7m) vs 12m ago -4.08% < -2% |
| Gross Margin: 64.29% > 18% (prev 0.67%; Δ 6.36k% > 0.5%) |
| Asset Turnover: 62.78% > 50% (prev 62.52%; Δ 0.25% > 0%) |
| Interest Coverage Ratio: 12.43 > 6 (EBITDA TTM 38.8m / Interest Expense TTM 2.19m) |
| A: 0.69 (Total Current Assets 161.1m - Total Current Liabilities 17.4m) / Total Assets 209.0m |
| B: 0.56 (Retained Earnings 116.4m / Total Assets 209.0m) |
| C: 0.13 (EBIT TTM 27.2m / Avg Total Assets 217.2m) |
| D: 4.70 (Book Value of Equity 116.2m / Total Liabilities 24.7m) |
| Altman-Z'' = 12.11 = AAA |
| DSRI: 1.30 (Receivables 40.6m/32.4m, Revenue 136.3m/140.9m) |
| GMI: 1.04 (GM 64.29% / 66.88%) |
| AQI: 0.64 (AQ_t 0.13 / AQ_t-1 0.21) |
| SGI: 0.97 (Revenue 136.3m / 140.9m) |
| TATA: -0.04 (NI 20.6m - CFO 29.1m) / TA 209.0m) |
| Beneish M = -3.02 (Cap -4..+1) = AA |
As of May 27, 2026, the stock is trading at USD 8.77 with a total of 701,003 shares traded.
Over the past week, the price has changed by -3.20%,
over one month by -20.63%,
over three months by -15.92% and
over the past year by -30.56%.
Energy Recovery has received a consensus analysts rating of 4.33. Therefore, it is recommended to buy ERII.
- StrongBuy: 2
- Buy: 0
- Hold: 1
- Sell: 0
- StrongSell: 0
| Analysts Target Price | 12 | 36.8% |
P/E Trailing = 23.9189
P/E Forward = 126.5823
P/S = 3.3388
P/B = 2.4754
P/EG = 3.325
Revenue TTM = 136.3m USD
EBIT TTM = 27.2m USD
EBITDA TTM = 38.8m USD
Long Term Debt = 6.25m USD (estimated: total debt 8.85m - short term 2.59m)
Short Term Debt = 2.59m USD (from shortTermDebt, last quarter)
Debt = 8.85m USD (from shortLongTermDebtTotal, last quarter) (leases 8.85m already included)
Net Debt = -77.3m USD (calculated: Debt 8.85m - CCE 86.2m)
Enterprise Value = 378.9m USD (456.2m + Debt 8.85m - CCE 86.2m)
Interest Coverage Ratio = 12.43 (Ebit TTM 27.2m / Interest Expense TTM 2.19m)
EV/FCF = 13.94x (Enterprise Value 378.9m / FCF TTM 27.2m)
FCF Yield = 7.17% (FCF TTM 27.2m / Enterprise Value 378.9m)
FCF Margin = 19.93% (FCF TTM 27.2m / Revenue TTM 136.3m)
Net Margin = 15.10% (Net Income TTM 20.6m / Revenue TTM 136.3m)
Gross Margin = 64.29% ((Revenue TTM 136.3m - Cost of Revenue TTM 48.7m) / Revenue TTM)
Gross Margin QoQ = 44.65% (prev 67.29%)
Tobins Q-Ratio = 1.81 (Enterprise Value 378.9m / Total Assets 209.0m)
Interest Expense / Debt = 24.77% (Interest Expense 2.19m / Debt 8.85m)
Taxrate = 16.79% (4.63m / 27.6m)
NOPAT = 22.7m (EBIT 27.2m * (1 - 16.79%))
Current Ratio = 9.28 (Total Current Assets 161.1m / Total Current Liabilities 17.4m)
Debt / Equity = 0.05 (Debt 8.85m / totalStockholderEquity, last quarter 184.3m)
Debt / EBITDA = -1.99 (Net Debt -77.3m / EBITDA 38.8m)
Debt / FCF = -2.84 (Net Debt -77.3m / FCF TTM 27.2m)
Total Stockholder Equity = 189.1m (last 4 quarters mean from totalStockholderEquity)
RoA = 9.48% (Net Income 20.6m / Total Assets 209.0m)
RoE = 10.89% (Net Income TTM 20.6m / Total Stockholder Equity 189.1m)
RoCE = 13.94% (EBIT 27.2m / Capital Employed (Equity 189.1m + L.T.Debt 6.25m))
RoIC = 20.97% (NOPAT 22.7m / Invested Capital 108.1m)
WACC = 8.05% (E(456.2m)/V(465.0m) * Re(7.81%) + D(8.85m)/V(465.0m) * Rd(24.77%) * (1-Tc(0.17)))
Discount Rate = 7.81% (= CAPM, Blume Beta Adj.)
Shares (quarterly) Correlation: -77.78 | Cagr: -3.96%
[DCF] Terminal Value 77.67% ; FCFF base≈25.9m ; Y1≈29.2m ; Y5≈41.2m
[DCF] Fair Price = 13.58 (EV 622.7m - Net Debt -77.3m = Equity 700.0m / Shares 51.5m; r=8.35% [WACC [floored]]; 5y FCF grow 13.05% → 2.50% )
EPS Correlation: 77.45 | EPS CAGR: 37.26% | SUE: -0.96 | # QB: -2
Revenue Correlation: 74.85 | Revenue CAGR: 7.80% | SUE: 0.24 | # QB: 0
EPS current Quarter (2026-06-30): EPS=-0.04 | Chg30d=-140.37% | Revisions=-14% | Analysts=2
EPS next Quarter (2026-09-30): EPS=0.01 | Chg30d=-89.53% | Revisions=-43% | Analysts=2
EPS current Year (2026-12-31): EPS=0.06 | Chg30d=-90.77% | Revisions=-43% | GrowthEPS=-89.7% | GrowthRev=-31.1%
EPS next Year (2027-12-31): EPS=0.62 | Chg30d=-32.74% | Revisions=-43% | GrowthEPS=+938.9% | GrowthRev=+32.4%
[Analyst] Revisions Ratio: -43%