ENERGY RECOVERY INC (ERII) Stock Fundamental Analysis
NASDAQ:ERII - Nasdaq - US29270J1007 - Common Stock - Currency: USD
Overall ERII gets a fundamental rating of 6 out of 10. We evaluated ERII 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 not overvalued while it is showing excellent growth. This is an interesting combination. This makes ERII very considerable 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.
ERII had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
ERII has a Return On Assets of 9.51%. This is in the better half of the industry: ERII outperforms 78.13% of its industry peers.
ERII's Return On Equity of 10.82% is in line compared to the rest of the industry. ERII outperforms 56.25% of its industry peers.
ERII has a Return On Invested Capital (8.06%) which is comparable to the rest of the industry.
Measured over the past 3 years, the Average Return On Invested Capital for ERII is below the industry average of 10.72%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.51% | ||
| ROE | 10.82% | ||
| ROIC | 8.06% |
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
With an excellent Profit Margin value of 15.21%, ERII belongs to the best of the industry, outperforming 87.50% of the companies in the same industry.
ERII's Profit Margin has improved in the last couple of years.
Looking at the Operating Margin, with a value of 14.98%, ERII is in the better half of the industry, outperforming 70.31% of the companies in the same industry.
ERII's Operating Margin has improved in the last couple of years.
Looking at the Gross Margin, with a value of 66.88%, ERII belongs to the top of the industry, outperforming 98.44% of the companies in the same industry.
In the last couple of years the Gross Margin of ERII has declined.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.98% | ||
| PM (TTM) | 15.21% | ||
| GM | 66.88% |
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.
Compared to 1 year ago, ERII has less shares outstanding
ERII has less 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 16.85 indicates that ERII is not in any danger for bankruptcy at the moment.
ERII has a Altman-Z score of 16.85. This is amongst the best in the industry. ERII outperforms 97.66% 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 | 16.85 |
ROIC/WACC0.8
WACC10.07%
2.3 Liquidity
A Current Ratio of 8.39 indicates that ERII has no problem at all paying its short term obligations.
ERII's Current ratio of 8.39 is amongst the best of the industry. ERII outperforms 95.31% of its industry peers.
ERII has a Quick Ratio of 6.63. This indicates that ERII is financially healthy and has no problem in meeting its short term obligations.
ERII has a Quick ratio of 6.63. This is amongst the best in the industry. ERII outperforms 95.31% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 8.39 | ||
| Quick Ratio | 6.63 |
3. Growth
3.1 Past
ERII shows a strong growth in Earnings Per Share. In the last year, the EPS has been growing by 67.65%, which is quite impressive.
The Earnings Per Share has been growing by 27.65% on average over the past years. This is a very strong growth
The Revenue has grown by 10.93% in the past year. This is quite good.
The Revenue has been growing by 10.77% on average over the past years. This is quite good.
EPS 1Y (TTM)67.65%
EPS 3Y34.63%
EPS 5Y27.65%
EPS Q2Q%-28.57%
Revenue 1Y (TTM)10.93%
Revenue growth 3Y11.74%
Revenue growth 5Y10.77%
Sales Q2Q%-33.29%
3.2 Future
The Earnings Per Share is expected to grow by 13.74% on average over the next years. This is quite good.
Based on estimates for the next years, ERII will show a quite strong growth in Revenue. The Revenue will grow by 12.54% on average per year.
EPS Next Y-2.46%
EPS Next 2Y9.72%
EPS Next 3Y13.74%
EPS Next 5YN/A
Revenue Next Year2.75%
Revenue Next 2Y7.74%
Revenue Next 3Y12.54%
Revenue Next 5YN/A
3.3 Evolution
The estimated forward EPS growth is still strong, although it is decreasing when compared to the stronger growth in the past 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 stable.
4. Valuation
4.1 Price/Earnings Ratio
ERII is valuated rather expensively with a Price/Earnings ratio of 21.09.
Based on the Price/Earnings ratio, ERII is valued a bit cheaper than the industry average as 60.94% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 26.34. ERII is around the same levels.
ERII is valuated correctly with a Price/Forward Earnings ratio of 16.37.
Compared to the rest of the industry, the Price/Forward Earnings ratio of ERII indicates a somewhat cheap valuation: ERII is cheaper than 62.50% of the companies listed in the same industry.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.19, ERII is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.09 | ||
| Fwd PE | 16.37 |
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 67.97% of the companies 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 | 27.25 | ||
| EV/EBITDA | 21.76 |
4.3 Compensation for Growth
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 13.74% in the coming years.
PEG (NY)N/A
PEG (5Y)0.76
EPS Next 2Y9.72%
EPS Next 3Y13.74%
5. Dividend
5.1 Amount
No dividends for ERII!.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | N/A |
12.02
-0.16 (-1.31%)
Chartmill FA Rating
GICS SectorIndustrials
GICS IndustryGroupCapital Goods
GICS IndustryMachinery
Earnings (Last)
Earnings (Next)
Inst Owners87.48%
Inst Owner Change1.25%
Ins Owners2.81%
Ins Owner Change0.81%
Market Cap655.09M
Analysts82.22
Price Target14.79 (23.04%)
Short Float %1.84%
Short Ratio1.89
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)1
Avg EPS beat(2)-235.55%
Min EPS beat(2)-488.23%
Max EPS beat(2)17.13%
EPS beat(4)3
Avg EPS beat(4)-86.08%
Min EPS beat(4)-488.23%
Max EPS beat(4)63.4%
EPS beat(8)4
Avg EPS beat(8)-41.79%
EPS beat(12)6
Avg EPS beat(12)-23.55%
EPS beat(16)9
Avg EPS beat(16)22.13%
Revenue beat(2)0
Avg Revenue beat(2)-33.08%
Min Revenue beat(2)-63.91%
Max Revenue beat(2)-2.24%
Revenue beat(4)0
Avg Revenue beat(4)-18.17%
Min Revenue beat(4)-63.91%
Max Revenue beat(4)-2.24%
Revenue beat(8)1
Avg Revenue beat(8)-12.21%
Revenue beat(12)3
Avg Revenue beat(12)-9.99%
Revenue beat(16)5
Avg Revenue beat(16)-7.11%
PT rev (1m)-26.27%
PT rev (3m)-25%
EPS NQ rev (1m)-66.7%
EPS NQ rev (3m)-93.76%
EPS NY rev (1m)0%
EPS NY rev (3m)2.34%
Revenue NQ rev (1m)1.26%
Revenue NQ rev (3m)-19.58%
Revenue NY rev (1m)-1.97%
Revenue NY rev (3m)-6.34%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 21.09 | ||
| Fwd PE | 16.37 | ||
| P/S | 4.65 | ||
| P/FCF | 27.25 | ||
| P/OCF | 26.52 | ||
| P/B | 3.31 | ||
| P/tB | 3.53 | ||
| EV/EBITDA | 21.76 |
EPS(TTM)0.57
EY4.74%
EPS(NY)0.73
Fwd EY6.11%
FCF(TTM)0.44
FCFY3.67%
OCF(TTM)0.45
OCFY3.77%
SpS2.59
BVpS3.64
TBVpS3.4
PEG (NY)N/A
PEG (5Y)0.76
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 9.51% | ||
| ROE | 10.82% | ||
| ROCE | 10.2% | ||
| ROIC | 8.06% | ||
| ROICexc | 13.51% | ||
| ROICexgc | 15.08% | ||
| OM | 14.98% | ||
| PM (TTM) | 15.21% | ||
| GM | 66.88% | ||
| FCFM | 17.06% |
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-Score7
Asset Turnover0.63
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0 | ||
| Debt/FCF | 0 | ||
| Debt/EBITDA | 0 | ||
| Cap/Depr | 16.71% | ||
| Cap/Sales | 0.47% | ||
| Interest Coverage | 250 | ||
| Cash Conversion | 98.46% | ||
| Profit Quality | 112.17% | ||
| Current Ratio | 8.39 | ||
| Quick Ratio | 6.63 | ||
| Altman-Z | 16.85 |
F-Score7
WACC10.07%
ROIC/WACC0.8
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)67.65%
EPS 3Y34.63%
EPS 5Y27.65%
EPS Q2Q%-28.57%
EPS Next Y-2.46%
EPS Next 2Y9.72%
EPS Next 3Y13.74%
EPS Next 5YN/A
Revenue 1Y (TTM)10.93%
Revenue growth 3Y11.74%
Revenue growth 5Y10.77%
Sales Q2Q%-33.29%
Revenue Next Year2.75%
Revenue Next 2Y7.74%
Revenue Next 3Y12.54%
Revenue Next 5YN/A
EBIT growth 1Y30.1%
EBIT growth 3Y17.08%
EBIT growth 5Y16.38%
EBIT Next Year140.1%
EBIT Next 3Y54.42%
EBIT Next 5YN/A
FCF growth 1Y17.62%
FCF growth 3Y41.07%
FCF growth 5YN/A
OCF growth 1Y7.92%
OCF growth 3Y14.91%
OCF growth 5Y31.24%