ENERGY RECOVERY INC (ERII) Fundamental Analysis & Valuation
NASDAQ:ERII • US29270J1007
10.61 USD
-0.12 (-1.12%)
At close: Mar 6, 2026
10.8 USD
+0.19 (+1.79%)
After Hours: 3/6/2026, 8:14:23 PM
This ERII fundamental analysis includes valuation metrics, fair value assessment, financial health analysis, profitability trends, growth metrics and dividend sustainability analysis.
Taking everything into account, ERII scores 7 out of 10 in our fundamental rating. ERII was compared to 130 industry peers in the Machinery industry. ERII has outstanding health and profitabily ratings, belonging to the best of the industry. This is a solid base for any company. ERII has a correct valuation and a medium growth rate. These ratings could make ERII a good candidate for quality investing.
1. ERII Profitability Analysis
1.1 Basic Checks
- In the past year ERII was profitable.
- ERII had a positive operating cash flow in the past year.
- Each year in the past 5 years ERII has been profitable.
- Each year in the past 5 years ERII had a positive operating cash flow.
1.2 Ratios
- Looking at the Return On Assets, with a value of 9.92%, ERII belongs to the top of the industry, outperforming 81.54% of the companies in the same industry.
- ERII has a Return On Equity of 11.14%. This is in the better half of the industry: ERII outperforms 66.15% of its industry peers.
- ERII has a Return On Invested Capital of 9.76%. This is in the better half of the industry: ERII outperforms 71.54% of its industry peers.
- The Average Return On Invested Capital over the past 3 years for ERII is in line with the industry average of 10.22%.
- The 3 year average ROIC (8.54%) for ERII is below the current ROIC(9.76%), indicating increased profibility in the last year.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.92% | ||
| ROE | 11.14% | ||
| ROIC | 9.76% |
ROA(3y)9.3%
ROA(5y)9.13%
ROE(3y)10.63%
ROE(5y)10.57%
ROIC(3y)8.54%
ROIC(5y)8.51%
1.3 Margins
- ERII has a better Profit Margin (17.01%) than 93.08% of its industry peers.
- In the last couple of years the Profit Margin of ERII has declined.
- Looking at the Operating Margin, with a value of 17.93%, ERII belongs to the top of the industry, outperforming 83.85% of the companies in the same industry.
- In the last couple of years the Operating Margin of ERII has declined.
- Looking at the Gross Margin, with a value of 65.14%, ERII belongs to the top of the industry, outperforming 99.23% of the companies in the same industry.
- In the last couple of years the Gross Margin of ERII has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 17.93% | ||
| PM (TTM) | 17.01% | ||
| GM | 65.14% |
OM growth 3Y-3.21%
OM growth 5Y-8.68%
PM growth 3Y-3.87%
PM growth 5Y-5.17%
GM growth 3Y-2.16%
GM growth 5Y-3.09%
2. ERII Health Analysis
2.1 Basic Checks
- The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so ERII is still creating some value.
- ERII has less shares outstanding than it did 1 year ago.
- Compared to 5 years ago, ERII has less shares outstanding
- There is no outstanding debt for ERII. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
2.2 Solvency
- ERII has an Altman-Z score of 15.99. This indicates that ERII is financially healthy and has little risk of bankruptcy at the moment.
- ERII has a Altman-Z score of 15.99. This is amongst the best in the industry. ERII outperforms 97.69% of its industry peers.
- There is no outstanding debt for ERII. This means it has a Debt/Equity and Debt/FCF ratio of 0 and it is amongst the best of the sector and industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 15.99 |
ROIC/WACC1.06
WACC9.2%
2.3 Liquidity
- ERII has a Current Ratio of 10.44. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
- ERII has a Current ratio of 10.44. This is amongst the best in the industry. ERII outperforms 95.38% of its industry peers.
- ERII has a Quick Ratio of 9.04. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
- ERII has a Quick ratio of 9.04. This is amongst the best in the industry. ERII outperforms 95.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10.44 | ||
| Quick Ratio | 9.04 |
3. ERII Growth Analysis
3.1 Past
- ERII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 20.00%, which is quite impressive.
- Measured over the past 5 years, ERII shows a small growth in Earnings Per Share. The EPS has been growing by 1.55% on average per year.
- ERII shows a decrease in Revenue. In the last year, the revenue decreased by -6.87%.
- Measured over the past years, ERII shows a small growth in Revenue. The Revenue has been growing by 2.55% on average per year.
EPS 1Y (TTM)20%
EPS 3Y7.89%
EPS 5Y1.55%
EPS Q2Q%17.78%
Revenue 1Y (TTM)-6.87%
Revenue growth 3Y2.43%
Revenue growth 5Y2.55%
Sales Q2Q%-0.3%
3.2 Future
- ERII is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 51.49% yearly.
- Based on estimates for the next years, ERII will show a quite strong growth in Revenue. The Revenue will grow by 15.41% on average per year.
EPS Next Y47.33%
EPS Next 2Y51.49%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue Next Year2.94%
Revenue Next 2Y12.05%
Revenue Next 3Y16.18%
Revenue Next 5Y15.41%
3.3 Evolution
- The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
- When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
4. ERII Valuation Analysis
4.1 Price/Earnings Ratio
- ERII is valuated rather expensively with a Price/Earnings ratio of 19.65.
- Compared to the rest of the industry, the Price/Earnings ratio of ERII indicates a somewhat cheap valuation: ERII is cheaper than 75.38% of the companies listed in the same industry.
- ERII's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 26.29.
- Based on the Price/Forward Earnings ratio of 13.34, the valuation of ERII can be described as correct.
- Based on the Price/Forward Earnings ratio, ERII is valued cheaper than 89.23% of the companies in the same industry.
- Compared to an average S&P500 Price/Forward Earnings ratio of 24.57, ERII is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.65 | ||
| Fwd PE | 13.34 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERII is on the same level as its industry peers.
- ERII's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 32.14 | ||
| EV/EBITDA | 16.61 |
4.3 Compensation for Growth
- The low PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates a rather cheap valuation of the company.
- ERII has a very decent profitability rating, which may justify a higher PE ratio.
- ERII's earnings are expected to grow with 51.49% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.42
PEG (5Y)12.67
EPS Next 2Y51.49%
EPS Next 3YN/A
5. ERII Dividend Analysis
5.1 Amount
- ERII does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
ERII Fundamentals: All Metrics, Ratios and Statistics
10.61
-0.12 (-1.12%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)02-25 2026-02-25/amc
Earnings (Next)05-05 2026-05-05
Inst Owners93.4%
Inst Owner Change-1.18%
Ins Owners3.15%
Ins Owner Change4.68%
Market Cap560.53M
Revenue(TTM)134.99M
Net Income(TTM)22.96M
Analysts81.82
Price Target18.6 (75.31%)
Short Float %2.98%
Short Ratio3.32
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
Yearly DividendN/A
Dividend Growth(5Y)N/A
DPN/A
Div Incr Years0
Div Non Decr Years0
Ex-DateN/A
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)-4.3%
Min EPS beat(2)-22.45%
Max EPS beat(2)13.86%
EPS beat(4)2
Avg EPS beat(4)366.02%
Min EPS beat(4)-488.23%
Max EPS beat(4)1960.88%
EPS beat(8)5
Avg EPS beat(8)204.28%
EPS beat(12)7
Avg EPS beat(12)138.75%
EPS beat(16)9
Avg EPS beat(16)113.57%
Revenue beat(2)0
Avg Revenue beat(2)-12.64%
Min Revenue beat(2)-20.54%
Max Revenue beat(2)-4.74%
Revenue beat(4)1
Avg Revenue beat(4)-20.26%
Min Revenue beat(4)-63.91%
Max Revenue beat(4)8.15%
Revenue beat(8)2
Avg Revenue beat(8)-4.17%
Revenue beat(12)4
Avg Revenue beat(12)-3.76%
Revenue beat(16)6
Avg Revenue beat(16)-3.65%
PT rev (1m)0%
PT rev (3m)0%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-0.49%
EPS NY rev (1m)0%
EPS NY rev (3m)15.67%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)0%
Revenue NY rev (1m)0.1%
Revenue NY rev (3m)-0.11%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.65 | ||
| Fwd PE | 13.34 | ||
| P/S | 4.15 | ||
| P/FCF | 32.14 | ||
| P/OCF | 29.86 | ||
| P/B | 2.72 | ||
| P/tB | 2.9 | ||
| EV/EBITDA | 16.61 |
EPS(TTM)0.54
EY5.09%
EPS(NY)0.8
Fwd EY7.5%
FCF(TTM)0.33
FCFY3.11%
OCF(TTM)0.36
OCFY3.35%
SpS2.56
BVpS3.9
TBVpS3.66
PEG (NY)0.42
PEG (5Y)12.67
Graham Number6.89
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.92% | ||
| ROE | 11.14% | ||
| ROCE | 11.3% | ||
| ROIC | 9.76% | ||
| ROICexc | 15.05% | ||
| ROICexgc | 16.58% | ||
| OM | 17.93% | ||
| PM (TTM) | 17.01% | ||
| GM | 65.14% | ||
| FCFM | 12.92% |
ROA(3y)9.3%
ROA(5y)9.13%
ROE(3y)10.63%
ROE(5y)10.57%
ROIC(3y)8.54%
ROIC(5y)8.51%
ROICexc(3y)14%
ROICexc(5y)15.05%
ROICexgc(3y)15.48%
ROICexgc(5y)16.92%
ROCE(3y)9.88%
ROCE(5y)9.86%
ROICexgc growth 3Y-9.43%
ROICexgc growth 5Y-18.99%
ROICexc growth 3Y-8.57%
ROICexc growth 5Y-17.46%
OM growth 3Y-3.21%
OM growth 5Y-8.68%
PM growth 3Y-3.87%
PM growth 5Y-5.17%
GM growth 3Y-2.16%
GM growth 5Y-3.09%
F-Score6
Asset Turnover0.58
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 35.37% | ||
| Cap/Sales | 0.99% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 67.13% | ||
| Profit Quality | 75.95% | ||
| Current Ratio | 10.44 | ||
| Quick Ratio | 9.04 | ||
| Altman-Z | 15.99 |
F-Score6
WACC9.2%
ROIC/WACC1.06
Cap/Depr(3y)43.34%
Cap/Depr(5y)66.27%
Cap/Sales(3y)1.29%
Cap/Sales(5y)2.74%
Profit Quality(3y)89.52%
Profit Quality(5y)70.3%
High Growth Momentum
Growth
EPS 1Y (TTM)20%
EPS 3Y7.89%
EPS 5Y1.55%
EPS Q2Q%17.78%
EPS Next Y47.33%
EPS Next 2Y51.49%
EPS Next 3YN/A
EPS Next 5YN/A
Revenue 1Y (TTM)-6.87%
Revenue growth 3Y2.43%
Revenue growth 5Y2.55%
Sales Q2Q%-0.3%
Revenue Next Year2.94%
Revenue Next 2Y12.05%
Revenue Next 3Y16.18%
Revenue Next 5Y15.41%
EBIT growth 1Y9.02%
EBIT growth 3Y-0.85%
EBIT growth 5Y-6.35%
EBIT Next Year40.79%
EBIT Next 3YN/A
EBIT Next 5YN/A
FCF growth 1Y-9.28%
FCF growth 3Y27.58%
FCF growth 5Y11.59%
OCF growth 1Y-8.54%
OCF growth 3Y14.11%
OCF growth 5Y2.16%
ENERGY RECOVERY INC / ERII FAQ
What is the ChartMill fundamental rating of ENERGY RECOVERY INC (ERII) stock?
ChartMill assigns a fundamental rating of 7 / 10 to ERII.
Can you provide the valuation status for ENERGY RECOVERY INC?
ChartMill assigns a valuation rating of 6 / 10 to ENERGY RECOVERY INC (ERII). This can be considered as Fairly Valued.
How profitable is ENERGY RECOVERY INC (ERII) stock?
ENERGY RECOVERY INC (ERII) has a profitability rating of 7 / 10.
Can you provide the PE and PB ratios for ERII stock?
The Price/Earnings (PE) ratio for ENERGY RECOVERY INC (ERII) is 19.65 and the Price/Book (PB) ratio is 2.72.
What is the expected EPS growth for ENERGY RECOVERY INC (ERII) stock?
The Earnings per Share (EPS) of ENERGY RECOVERY INC (ERII) is expected to grow by 47.33% in the next year.