14.65 USD
+0.17 (+1.17%)
14.7 USD
+0.05 (+0.34%)
Overall ERII gets a fundamental rating of 7 out of 10. We evaluated ERII against 132 industry peers in the Machinery industry. Both the health and profitability get an excellent rating, making ERII a very profitable company, without any liquidiy or solvency issues. ERII is not priced too expensively while it is growing strongly. Keep and eye on this one! This makes ERII very considerable for growth and quality investing!
1. Profitability
1.1 Basic Checks
- In the past year ERII was profitable.
- ERII had a positive operating cash flow in the past year.
- In the past 5 years ERII has always been profitable.
- In the past 5 years ERII always reported a positive cash flow from operatings.
1.2 Ratios
- With a decent Return On Assets value of 9.31%, ERII is doing good in the industry, outperforming 78.03% of the companies in the same industry.
- Looking at the Return On Equity, with a value of 10.79%, ERII is in the better half of the industry, outperforming 65.91% of the companies in the same industry.
- ERII has a better Return On Invested Capital (8.89%) than 64.39% of its industry peers.
- Measured over the past 3 years, the Average Return On Invested Capital for ERII is below the industry average of 10.24%.
- The last Return On Invested Capital (8.89%) for ERII is above the 3 year average (8.12%), which is a sign of increasing profitability.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.31% | ||
| ROE | 10.79% | ||
| ROIC | 8.89% |
ROA(3y)9.69%
ROA(5y)9.73%
ROE(3y)11.24%
ROE(5y)11.42%
ROIC(3y)8.12%
ROIC(5y)8.81%
1.3 Margins
- Looking at the Profit Margin, with a value of 14.44%, ERII belongs to the top of the industry, outperforming 85.61% of the companies in the same industry.
- ERII's Profit Margin has improved in the last couple of years.
- With a decent Operating Margin value of 15.68%, ERII is doing good in the industry, outperforming 72.73% of the companies in the same industry.
- In the last couple of years the Operating Margin of ERII has grown nicely.
- ERII's Gross Margin of 66.64% is amongst the best of the industry. ERII outperforms 99.24% of its industry peers.
- ERII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.68% | ||
| PM (TTM) | 14.44% | ||
| GM | 66.64% |
OM growth 3Y4.79%
OM growth 5Y5.06%
PM growth 3Y5.01%
PM growth 5Y4.86%
GM growth 3Y-0.83%
GM growth 5Y-2.69%
2. Health
2.1 Basic Checks
- With a Return on Invested Capital (ROIC) below the Cost of Capital (WACC), ERII is destroying value.
- The number of shares outstanding for ERII has been reduced compared to 1 year ago.
- The number of shares outstanding for ERII has been reduced compared to 5 years ago.
- ERII has no outstanding debt. Therefor its Debt/Equity and Debt/FCF ratios are 0 and belong to the best of the industry.
2.2 Solvency
- ERII has an Altman-Z score of 18.59. This indicates that ERII is financially healthy and has little risk of bankruptcy at the moment.
- Looking at the Altman-Z score, with a value of 18.59, ERII belongs to the top of the industry, outperforming 97.73% of the companies in the same industry.
- 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 | 18.59 |
ROIC/WACC0.92
WACC9.63%
2.3 Liquidity
- A Current Ratio of 7.33 indicates that ERII has no problem at all paying its short term obligations.
- ERII has a Current ratio of 7.33. This is amongst the best in the industry. ERII outperforms 94.70% of its industry peers.
- ERII has a Quick Ratio of 5.75. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
- The Quick ratio of ERII (5.75) is better than 94.70% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.33 | ||
| Quick Ratio | 5.75 |
3. Growth
3.1 Past
- ERII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 35.29%, which is quite impressive.
- The Earnings Per Share has been growing by 20.11% on average over the past years. This is a very strong growth
- ERII shows a small growth in Revenue. In the last year, the Revenue has grown by 0.10%.
- Measured over the past years, ERII shows a quite strong growth in Revenue. The Revenue has been growing by 10.77% on average per year.
EPS 1Y (TTM)35.29%
EPS 3Y21.64%
EPS 5Y20.11%
EPS Q2Q%-20%
Revenue 1Y (TTM)0.1%
Revenue growth 3Y11.74%
Revenue growth 5Y10.77%
Sales Q2Q%-17.06%
3.2 Future
- Based on estimates for the next years, ERII will show a very strong growth in Earnings Per Share. The EPS will grow by 40.17% on average per year.
- ERII is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 13.66% yearly.
EPS Next Y61.69%
EPS Next 2Y40.43%
EPS Next 3Y40.17%
EPS Next 5YN/A
Revenue Next Year3.83%
Revenue Next 2Y6.37%
Revenue Next 3Y8.76%
Revenue Next 5Y13.66%
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. Valuation
4.1 Price/Earnings Ratio
- With a Price/Earnings ratio of 31.85, ERII can be considered very expensive at the moment.
- ERII's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 28.60. ERII is around the same levels.
- With a Price/Forward Earnings ratio of 16.51, ERII is valued correctly.
- Based on the Price/Forward Earnings ratio, ERII is valued a bit cheaper than the industry average as 77.27% of the companies are valued more expensively.
- When comparing the Price/Forward Earnings ratio of ERII to the average of the S&P500 Index (25.83), we can say ERII is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.85 | ||
| Fwd PE | 16.51 |
4.2 Price Multiples
- Based on the Enterprise Value to EBITDA ratio, ERII is valued a bit more expensive than 69.70% 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 | 39.04 | ||
| EV/EBITDA | 26.78 |
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 40.17% in the coming years. This may justify a more expensive valuation.
PEG (NY)0.52
PEG (5Y)1.58
EPS Next 2Y40.43%
EPS Next 3Y40.17%
5. Dividend
5.1 Amount
- No dividends for ERII!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 0% |
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 5 / 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 31.85 and the Price/Book (PB) ratio is 4.29.
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 61.69% in the next year.