14.5 USD
+0.17 (+1.19%)
ERII gets a fundamental rating of 7 out of 10. The analysis compared the fundamentals against 132 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 is showing excellent growth while it is valued at reasonable prices. Keep and eye on this one! With these ratings, ERII could be worth investigating further for growth and quality investing!.
1. Profitability
1.1 Basic Checks
- In the past year ERII was profitable.
- In the past year ERII had a positive cash flow from operations.
- Each year in the past 5 years ERII has been profitable.
- In the past 5 years ERII always reported a positive cash flow from operatings.
1.2 Ratios
- Looking at the Return On Assets, with a value of 9.31%, ERII is in the better half of 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's Return On Invested Capital of 8.89% is fine compared to the rest of the industry. ERII outperforms 64.39% of its industry peers.
- ERII had an Average Return On Invested Capital over the past 3 years of 8.12%. This is below the industry average of 10.24%.
- The 3 year average ROIC (8.12%) for ERII is below the current ROIC(8.89%), indicating increased profibility in the last year.
| 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
- The Profit Margin of ERII (14.44%) is better than 85.61% of its industry peers.
- ERII's Profit Margin has improved in the last couple of years.
- Looking at the Operating Margin, with a value of 15.68%, ERII is in the better half of the industry, outperforming 72.73% of the companies in the same industry.
- ERII's Operating Margin has improved in the last couple of years.
- ERII has a better Gross Margin (66.64%) than 99.24% of its industry peers.
- In the last couple of years the Gross Margin of ERII has declined.
| 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
- ERII has a Return on Invested Capital (ROIC), which is below the Cost of Capital (WACC), which means it is destroying value.
- ERII has less shares outstanding than it did 1 year ago.
- ERII has less 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
- ERII has an Altman-Z score of 18.23. 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 18.23, ERII belongs to the top of the industry, outperforming 97.73% of the companies in the same industry.
- 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 | 18.23 |
ROIC/WACC0.92
WACC9.64%
2.3 Liquidity
- A Current Ratio of 7.33 indicates that ERII has no problem at all paying its short term obligations.
- With an excellent Current ratio value of 7.33, ERII belongs to the best of the industry, outperforming 94.70% of the companies in the same industry.
- 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.
- Looking at the Quick ratio, with a value of 5.75, ERII belongs to the top of the industry, outperforming 94.70% of the companies in the same industry.
| 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.
- ERII shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 20.11% yearly.
- The Revenue has been growing slightly by 0.10% in the past year.
- ERII shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 10.77% yearly.
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
- The Price/Earnings ratio is 31.52, which means the current valuation is very expensive for ERII.
- ERII's Price/Earnings is on the same level as the industry average.
- The average S&P500 Price/Earnings ratio is at 27.25. ERII is around the same levels.
- Based on the Price/Forward Earnings ratio of 16.34, the valuation of ERII can be described as correct.
- 79.55% of the companies in the same industry are more expensive than ERII, based on the Price/Forward Earnings ratio.
- When comparing the Price/Forward Earnings ratio of ERII to the average of the S&P500 Index (25.98), we can say ERII is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 31.52 | ||
| Fwd PE | 16.34 |
4.2 Price Multiples
- Compared to the rest of the industry, the Enterprise Value to EBITDA ratio of ERII indicates a slightly more expensive valuation: ERII is more expensive than 68.94% of the companies listed in the same industry.
- The rest of the industry has a similar Price/Free Cash Flow ratio as ERII.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 38.64 | ||
| EV/EBITDA | 26.12 |
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.
- A more expensive valuation may be justified as ERII's earnings are expected to grow with 40.17% in the coming years.
PEG (NY)0.51
PEG (5Y)1.57
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 31.52 and the Price/Book (PB) ratio is 4.25.
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.