ENERGY RECOVERY INC (ERII)
US29270J1007 - Common Stock
We assign a fundamental rating of 6 out of 10 to ERII. ERII was compared to 131 industry peers in the Machinery industry. ERII has an excellent financial health rating, but there are some minor concerns on its profitability. ERII is valued quite expensively, but it does show have an excellent growth rating. With these ratings, ERII could be worth investigating further for growth investing!.
1. Profitability
1.1 Basic Checks
ERII had positive earnings in the past year.
In the past year ERII had a positive cash flow from operations.
ERII had positive earnings in each of the past 5 years.
Each year in the past 5 years ERII had a positive operating cash flow.
1.2 Ratios
ERII has a better Return On Assets (7.38%) than 70.87% of its industry peers.
ERII has a Return On Equity (8.29%) which is in line with its industry peers.
ERII has a Return On Invested Capital (4.77%) which is in line with its industry peers.
ERII had an Average Return On Invested Capital over the past 3 years of 7.34%. This is below the industry average of 11.01%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.38% | ||
| ROE | 8.29% | ||
| ROIC | 4.77% |
ROA(3y)8.75%
ROA(5y)8.99%
ROE(3y)10.25%
ROE(5y)10.83%
ROIC(3y)7.34%
ROIC(5y)8.24%
1.3 Margins
ERII has a Profit Margin of 14.35%. This is amongst the best in the industry. ERII outperforms 87.40% 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 10.90%, ERII is in line with its industry, outperforming 57.48% of the companies in the same industry.
In the last couple of years the Operating Margin of ERII has grown nicely.
The Gross Margin of ERII (66.13%) is better than 99.21% of its industry peers.
ERII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 10.9% | ||
| PM (TTM) | 14.35% | ||
| GM | 66.13% |
OM growth 3Y-19.29%
OM growth 5Y2.03%
PM growth 3Y-8.93%
PM growth 5Y-10.8%
GM growth 3Y-3.8%
GM growth 5Y-2.24%
2. Health
2.1 Basic Checks
With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ERII is destroying value.
ERII has more shares outstanding than it did 1 year ago.
ERII has more shares outstanding than it did 5 years ago.
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
An Altman-Z score of 20.75 indicates that ERII is not in any danger for bankruptcy at the moment.
The Altman-Z score of ERII (20.75) is better than 96.06% of its industry peers.
ERII has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Altman-Z | 20.75 |
ROIC/WACC0.52
WACC9.24%
2.3 Liquidity
ERII has a Current Ratio of 10.06. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
ERII's Current ratio of 10.06 is amongst the best of the industry. ERII outperforms 96.85% of its industry peers.
ERII has a Quick Ratio of 8.29. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
ERII has a Quick ratio of 8.29. This is amongst the best in the industry. ERII outperforms 96.06% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 10.06 | ||
| Quick Ratio | 8.29 |
3. Growth
3.1 Past
ERII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 25.93%, which is quite impressive.
The Earnings Per Share has been growing by 14.26% on average over the past years. This is quite good.
Looking at the last year, ERII shows a quite strong growth in Revenue. The Revenue has grown by 19.05% in the last year.
The Revenue has been growing by 11.49% on average over the past years. This is quite good.
EPS 1Y (TTM)25.93%
EPS 3Y-9.55%
EPS 5Y14.26%
EPS Q2Q%-11.76%
Revenue 1Y (TTM)19.05%
Revenue growth 3Y2.55%
Revenue growth 5Y11.49%
Sales Q2Q%4.18%
3.2 Future
ERII is expected to show a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 29.62% yearly.
The Revenue is expected to grow by 18.40% on average over the next years. This is quite good.
EPS Next Y-1.45%
EPS Next 2Y23.69%
EPS Next 3Y29.62%
EPS Next 5YN/A
Revenue Next Year8.97%
Revenue Next 2Y13.43%
Revenue Next 3Y18.4%
Revenue Next 5YN/A
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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. Valuation
4.1 Price/Earnings Ratio
ERII is valuated quite expensively with a Price/Earnings ratio of 46.47.
ERII's Price/Earnings ratio is a bit more expensive when compared to the industry. ERII is more expensive than 70.08% of the companies in the same industry.
ERII is valuated expensively when we compare the Price/Earnings ratio to 29.20, which is the current average of the S&P500 Index.
Based on the Price/Forward Earnings ratio of 27.91, the valuation of ERII can be described as expensive.
The rest of the industry has a similar Price/Forward Earnings ratio as ERII.
Compared to an average S&P500 Price/Forward Earnings ratio of 24.00, ERII is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.47 | ||
| Fwd PE | 27.91 |
4.2 Price Multiples
ERII's Enterprise Value to EBITDA ratio is a bit more expensive when compared to the industry. ERII is more expensive than 70.87% of the companies in the same industry.
ERII's Price/Free Cash Flow is on the same level as the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 40.17 | ||
| EV/EBITDA | 38.87 |
4.3 Compensation for Growth
ERII has a very decent profitability rating, which may justify a higher PE ratio.
A more expensive valuation may be justified as ERII's earnings are expected to grow with 29.62% in the coming years.
PEG (NY)N/A
PEG (5Y)3.26
EPS Next 2Y23.69%
EPS Next 3Y29.62%
5. Dividend
5.1 Amount
No dividends for ERII!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ENERGY RECOVERY INC
NASDAQ:ERII (11/22/2024, 8:00:02 PM)
After market: 15.8 0 (0%)15.8
+0.17 (+1.09%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap914.66M
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
Avg EPS beat(4)
Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 46.47 | ||
| Fwd PE | 27.91 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)N/A
PEG (5Y)3.26
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 7.38% | ||
| ROE | 8.29% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 10.9% | ||
| PM (TTM) | 14.35% | ||
| GM | 66.13% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.51
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 10.06 | ||
| Quick Ratio | 8.29 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
High Growth Momentum
Growth
EPS 1Y (TTM)25.93%
EPS 3Y-9.55%
EPS 5Y
EPS Q2Q%
EPS Next Y-1.45%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)19.05%
Revenue growth 3Y2.55%
Revenue growth 5Y
Sales Q2Q%
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y