ENERGY RECOVERY INC (ERII)
US29270J1007 - Common Stock
We assign a fundamental rating of 6 out of 10 to ERII. ERII was compared to 132 industry peers in the Machinery industry. ERII is in great health and has no worries on liquidiy or solvency at all, but the profibility rating is only average. ERII is valued quite expensively, but it does show have an excellent growth rating. These ratings could make ERII a good candidate for growth 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
ERII's Return On Assets of 8.50% is fine compared to the rest of the industry. ERII outperforms 69.77% of its industry peers.
The Return On Equity of ERII (9.78%) is comparable to the rest of the industry.
ERII has a Return On Invested Capital (6.50%) which is comparable to the rest of the industry.
ERII had an Average Return On Invested Capital over the past 3 years of 7.34%. This is below the industry average of 10.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.5% | ||
| ROE | 9.78% | ||
| ROIC | 6.5% |
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's Profit Margin of 16.75% is amongst the best of the industry. ERII outperforms 89.15% of its industry peers.
In the last couple of years the Profit Margin of ERII has declined.
With a decent Operating Margin value of 14.84%, ERII is doing good in the industry, outperforming 76.74% 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 (67.85%) is better than 98.45% of its industry peers.
ERII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.84% | ||
| PM (TTM) | 16.75% | ||
| GM | 67.85% |
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.
The number of shares outstanding for ERII has been increased compared to 1 year ago.
ERII has more shares outstanding than it did 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
An Altman-Z score of 15.46 indicates that ERII is not in any danger for bankruptcy at the moment.
ERII has a Altman-Z score of 15.46. This is amongst the best in the industry. ERII outperforms 96.12% 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 | 15.46 |
ROIC/WACC0.7
WACC9.27%
2.3 Liquidity
ERII has a Current Ratio of 8.64. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
Looking at the Current ratio, with a value of 8.64, ERII belongs to the top of the industry, outperforming 94.57% of the companies in the same industry.
A Quick Ratio of 7.42 indicates that ERII has no problem at all paying its short term obligations.
ERII's Quick ratio of 7.42 is amongst the best of the industry. ERII outperforms 95.35% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 8.64 | ||
| Quick Ratio | 7.42 |
3. Growth
3.1 Past
The earnings per share for ERII have decreased strongly by -13.95% in the last year.
ERII shows quite a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 14.26% yearly.
The Revenue has been growing slightly by 2.20% in the past year.
ERII shows quite a strong growth in Revenue. Measured over the last years, the Revenue has been growing by 11.49% yearly.
EPS 1Y (TTM)-13.95%
EPS 3Y-9.55%
EPS 5Y14.26%
EPS growth Q2Q41.67%
Revenue 1Y (TTM)2.2%
Revenue growth 3Y2.55%
Revenue growth 5Y11.49%
Revenue growth Q2Q35.23%
3.2 Future
The Earnings Per Share is expected to grow by 30.71% on average over the next years. This is a very strong growth
Based on estimates for the next years, ERII will show a very strong growth in Revenue. The Revenue will grow by 21.08% on average per year.
EPS Next Y4.07%
EPS Next 2Y33.6%
EPS Next 3Y30.71%
EPS Next 5YN/A
Revenue Next Year8.83%
Revenue Next 2Y16.36%
Revenue Next 3Y21.08%
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.
The Revenue growth rate is accelerating: in the next years the growth will be better than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 35.24, which means the current valuation is very expensive for ERII.
Based on the Price/Earnings ratio, ERII is valued a bit more expensive than 67.44% of the companies in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.06, ERII is valued a bit more expensive.
The Price/Forward Earnings ratio is 33.87, which means the current valuation is very expensive for ERII.
Based on the Price/Forward Earnings ratio, ERII is valued a bit more expensive than 64.34% of the companies in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.72, ERII is valued quite expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 35.24 | ||
| Fwd PE | 33.87 |
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 71.32% of the companies in the same industry.
ERII's Price/Free Cash Flow ratio is in line with the industry average.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 31.69 | ||
| EV/EBITDA | 25.71 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates ERII does not grow enough to justify the current Price/Earnings ratio.
The decent profitability rating of ERII may justify a higher PE ratio.
A more expensive valuation may be justified as ERII's earnings are expected to grow with 30.71% in the coming years.
PEG (NY)8.66
PEG (5Y)2.47
EPS Next 2Y33.6%
EPS Next 3Y30.71%
5. Dividend
5.1 Amount
ERII does not give a dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
ENERGY RECOVERY INC
NASDAQ:ERII (5/2/2024, 7:00:01 PM)
After market: 13.04 0 (0%)13.04
-1.61 (-10.99%)
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 Cap744.32M
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)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
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Revenue beat(2)
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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 | 35.24 | ||
| Fwd PE | 33.87 | ||
| 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)8.66
PEG (5Y)2.47
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 8.5% | ||
| ROE | 9.78% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 14.84% | ||
| PM (TTM) | 16.75% | ||
| GM | 67.85% | ||
| 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 | 8.64 | ||
| Quick Ratio | 7.42 | ||
| 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)
Growth
EPS 1Y (TTM)-13.95%
EPS 3Y-9.55%
EPS 5Y
EPS growth Q2Q
EPS Next Y4.07%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.2%
Revenue growth 3Y2.55%
Revenue growth 5Y
Revenue growth 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