ENERGY RECOVERY INC (ERII) Stock Fundamental Analysis
NASDAQ:ERII - Nasdaq - US29270J1007 - Common Stock - Currency: USD
ERII gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 128 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 expensive, but it does show an excellent growth. These ratings would make ERII suitable for growth investing!
1. Profitability
1.1 Basic Checks
ERII had positive earnings in the past year.
ERII had a positive operating cash flow in the past year.
ERII had positive earnings in each of the past 5 years.
In the past 5 years ERII always reported a positive cash flow from operatings.
1.2 Ratios
ERII has a better Return On Assets (9.49%) than 77.34% of its industry peers.
The Return On Equity of ERII (10.98%) is comparable to the rest of the industry.
With a Return On Invested Capital value of 7.99%, ERII perfoms like the industry average, outperforming 57.03% of the companies in the same industry.
ERII had an Average Return On Invested Capital over the past 3 years of 8.12%. This is below the industry average of 10.65%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 10.98% | ||
| ROIC | 7.99% |
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
ERII's Profit Margin of 15.90% is amongst the best of the industry. ERII outperforms 91.41% of its industry peers.
ERII's Profit Margin has improved in the last couple of years.
ERII's Operating Margin of 15.32% is fine compared to the rest of the industry. ERII outperforms 75.00% of its industry peers.
In the last couple of years the Operating Margin of ERII has grown nicely.
ERII has a Gross Margin of 66.87%. This is amongst the best in the industry. ERII outperforms 99.22% of its industry peers.
ERII's Gross Margin has declined in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 15.32% | ||
| PM (TTM) | 15.9% | ||
| GM | 66.87% |
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.
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.
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 17.87. This indicates that ERII is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of ERII (17.87) is better than 96.88% 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 | 17.87 |
ROIC/WACC0.79
WACC10.12%
2.3 Liquidity
ERII has a Current Ratio of 7.41. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
ERII's Current ratio of 7.41 is amongst the best of the industry. ERII outperforms 95.31% of its industry peers.
A Quick Ratio of 6.35 indicates that ERII has no problem at all paying its short term obligations.
With an excellent Quick ratio value of 6.35, ERII belongs to the best of the industry, outperforming 95.31% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 7.41 | ||
| Quick Ratio | 6.35 |
3. Growth
3.1 Past
The Earnings Per Share has grown by an impressive 54.05% over the past year.
ERII shows a strong growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 25.93% yearly.
ERII shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 12.93%.
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)54.05%
EPS 3Y31.62%
EPS 5Y25.93%
EPS Q2Q%20.59%
Revenue 1Y (TTM)12.93%
Revenue growth 3Y11.74%
Revenue growth 5Y10.77%
Sales Q2Q%17.29%
3.2 Future
ERII is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 16.34% yearly.
ERII is expected to show quite a strong growth in Revenue. In the coming years, the Revenue will grow by 12.79% yearly.
EPS Next Y8.56%
EPS Next 2Y16.62%
EPS Next 3Y16.34%
EPS Next 5YN/A
Revenue Next Year9.7%
Revenue Next 2Y10.42%
Revenue Next 3Y12.79%
Revenue Next 5YN/A
3.3 Evolution
Although the future EPS growth is still strong, it is not able to hold up the even more excellent growth rate of the past years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
ERII is valuated quite expensively with a Price/Earnings ratio of 26.11.
Compared to the rest of the industry, the Price/Earnings ratio of ERII indicates a slightly more expensive valuation: ERII is more expensive than 63.28% of the companies listed in the same industry.
ERII's Price/Earnings ratio indicates a similar valuation than the S&P500 average which is at 28.10.
A Price/Forward Earnings ratio of 24.05 indicates a rather expensive valuation of ERII.
ERII's Price/Forward Earnings ratio is in line with the industry average.
Compared to an average S&P500 Price/Forward Earnings ratio of 20.74, ERII is valued at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.11 | ||
| Fwd PE | 24.05 |
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 70.31% of the companies in the same industry.
Based on the Price/Free Cash Flow ratio, ERII is valued a bit more expensive than 63.28% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 42.39 | ||
| EV/EBITDA | 27.69 |
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.
ERII has a very decent profitability rating, which may justify a higher PE ratio.
ERII's earnings are expected to grow with 16.34% in the coming years. This may justify a more expensive valuation.
PEG (NY)3.05
PEG (5Y)1.01
EPS Next 2Y16.62%
EPS Next 3Y16.34%
5. Dividend
5.1 Amount
No dividends for ERII!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
14.88
-0.7 (-4.49%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners85.53%
Inst Owner Change0.46%
Ins Owners2.62%
Ins Owner Change-1.1%
Market Cap814.83M
Analysts80
Price Target20.06 (34.81%)
Short Float %2.08%
Short Ratio2.53
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
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)2
Avg EPS beat(2)35.06%
Min EPS beat(2)6.71%
Max EPS beat(2)63.4%
EPS beat(4)3
Avg EPS beat(4)32.96%
Min EPS beat(4)-1.67%
Max EPS beat(4)63.4%
EPS beat(8)5
Avg EPS beat(8)20.33%
EPS beat(12)7
Avg EPS beat(12)26.23%
EPS beat(16)10
Avg EPS beat(16)57.36%
Revenue beat(2)0
Avg Revenue beat(2)-2.76%
Min Revenue beat(2)-3.27%
Max Revenue beat(2)-2.24%
Revenue beat(4)0
Avg Revenue beat(4)-5.24%
Min Revenue beat(4)-12.17%
Max Revenue beat(4)-2.24%
Revenue beat(8)2
Avg Revenue beat(8)-4.09%
Revenue beat(12)4
Avg Revenue beat(12)-3.83%
Revenue beat(16)5
Avg Revenue beat(16)-3.65%
PT rev (1m)0%
PT rev (3m)-4.84%
EPS NQ rev (1m)0%
EPS NQ rev (3m)-137.5%
EPS NY rev (1m)0%
EPS NY rev (3m)6.43%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)-27.46%
Revenue NY rev (1m)0%
Revenue NY rev (3m)-3.69%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 26.11 | ||
| Fwd PE | 24.05 | ||
| P/S | 5.62 | ||
| P/FCF | 42.39 | ||
| P/OCF | 39.71 | ||
| P/B | 3.88 | ||
| P/tB | 4.13 | ||
| EV/EBITDA | 27.69 |
EPS(TTM)0.57
EY3.83%
EPS(NY)0.62
Fwd EY4.16%
FCF(TTM)0.35
FCFY2.36%
OCF(TTM)0.37
OCFY2.52%
SpS2.65
BVpS3.84
TBVpS3.6
PEG (NY)3.05
PEG (5Y)1.01
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.49% | ||
| ROE | 10.98% | ||
| ROCE | 10.12% | ||
| ROIC | 7.99% | ||
| ROICexc | 12.41% | ||
| ROICexgc | 13.64% | ||
| OM | 15.32% | ||
| PM (TTM) | 15.9% | ||
| GM | 66.87% | ||
| FCFM | 13.26% |
ROA(3y)9.69%
ROA(5y)9.73%
ROE(3y)11.24%
ROE(5y)11.42%
ROIC(3y)8.12%
ROIC(5y)8.81%
ROICexc(3y)14.22%
ROICexc(5y)18.19%
ROICexgc(3y)15.9%
ROICexgc(5y)21.13%
ROCE(3y)10.28%
ROCE(5y)11.16%
ROICexcg growth 3Y-2%
ROICexcg growth 5Y0.91%
ROICexc growth 3Y0.06%
ROICexc growth 5Y2.77%
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%
F-Score6
Asset Turnover0.6
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 32.08% | ||
| Cap/Sales | 0.9% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 78.19% | ||
| Profit Quality | 83.4% | ||
| Current Ratio | 7.41 | ||
| Quick Ratio | 6.35 | ||
| Altman-Z | 17.87 |
F-Score6
WACC10.12%
ROIC/WACC0.79
Cap/Depr(3y)61.16%
Cap/Depr(5y)84.81%
Cap/Sales(3y)2.09%
Cap/Sales(5y)3.68%
Profit Quality(3y)75.85%
Profit Quality(5y)62.74%
High Growth Momentum
Growth
EPS 1Y (TTM)54.05%
EPS 3Y31.62%
EPS 5Y25.93%
EPS Q2Q%20.59%
EPS Next Y8.56%
EPS Next 2Y16.62%
EPS Next 3Y16.34%
EPS Next 5YN/A
Revenue 1Y (TTM)12.93%
Revenue growth 3Y11.74%
Revenue growth 5Y10.77%
Sales Q2Q%17.29%
Revenue Next Year9.7%
Revenue Next 2Y10.42%
Revenue Next 3Y12.79%
Revenue Next 5YN/A
EBIT growth 1Y16.54%
EBIT growth 3Y17.08%
EBIT growth 5Y16.38%
EBIT Next Year172.52%
EBIT Next 3Y54.42%
EBIT Next 5YN/A
FCF growth 1Y-18.15%
FCF growth 3Y41.07%
FCF growth 5YN/A
OCF growth 1Y-21.23%
OCF growth 3Y14.91%
OCF growth 5Y31.24%