Energy Recovery

ERII

Industrial - Pollution & Treatment Controls · Industrials

Price

$8.62

-0.08 (-0.92%)

Market Cap

$444.3M

Exchange

NASDAQ

Winston Score

Winston is serious

Mixed quality — meaningful strengths and weaknesses.

Share count falling — buybacks

−7.8% over 4y

The company has reduced its share count over this period, returning value to shareholders through buybacks.

Diluted shares outstanding: 58.7M (2021) → 54.2M (2025)

Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and sells various solutions for the seawater reverse osmosis desalination and industrial wastewater treatment industries worldwide. The company operates through Water and Emerging Technologies segments. It offers a suite of products, including energy recovery devices, and high-pressure feed and recirculation pumps; hydraulic turbochargers and boosters; and spare parts, as well as repair, field, and commissioning servic

Winston Score History

Score breakdown

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Quality

Gross Margin

44.7%

Healthy — 44.7% gross margin

Operating Margin

-103.3%

Losing money on operations — -103.3%

ROCE

-5.4%

Weak — -5.4% return on capital

Negative ROIC means the business is losing money on every dollar invested in it.

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Growth

Sales YoY

-3.3%

Shrinking sales (-3.3% YoY)

EPS YoY

+6.0%

Modest earnings growth (6.0% YoY)

Single-digit earnings growth — steady but not exciting.

EPS Consistency

4/8 quarters

Earnings inconsistent quarter-to-quarter

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Cash Flow

Cash Conversion

141%

Turns 141% of profit into real cash

FCF Margin

19.9%

Converts sales into free cash efficiently (19.9%)

FCF margin between 10% and 20%. Every $100 in sales becomes $10 to $20 in real cash.

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Stability

Debt / Equity

0.01

Conservative — low debt load (0.01)

Interest Cover

100.00x

—

Comfortably covers interest (100.0x)

Interest coverage above 8. Profits cover interest many times over.

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Valuation

P/E Ratio (TTM)

22.1x

Growth-priced — P/E 22.1

P/E above the market average. People are paying up for expected growth.

P/E vs Forward

-4.4

SLOWING

Earnings expected to fall — forward P/E higher than today

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Dividends

Not applicable for this business.

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