WallStSmart

Energy Recovery Inc (ERII)vsZurn Elkay Water Solutions Corporation (ZWS)

VS

Smart Verdict

WallStSmart Research — data-driven comparison

Zurn Elkay Water Solutions Corporation generates 1174% more annual revenue ($1.74B vs $136.63M). ERII leads profitability with a 15.1% profit margin vs 12.3%. ZWS appears more attractively valued with a PEG of 1.70. ZWS earns a higher WallStSmart Score of 59/100 (C).

ERII

Buy

57

out of 100

Grade: C

Growth: 6.7Profit: 5.5Value: 4.7Quality: 9.0
Piotroski: 4/9Altman Z: 7.49

ZWS

Buy

59

out of 100

Grade: C

Growth: 7.3Profit: 6.5Value: 4.0Quality: 7.5
Piotroski: 5/9Altman Z: 1.53
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

ERIIUndervalued (+3.4%)

Margin of Safety

+3.4%

Fair Value

$15.98

Current Price

$8.01

$7.97 discount

UndervaluedFair: $15.98Overvalued
ZWSOvervalued (-8.6%)

Margin of Safety

-8.6%

Fair Value

$47.48

Current Price

$47.37

$0.11 premium

UndervaluedFair: $47.48Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

ERII5 strengths · Avg: 8.8/10
Debt/EquityHealth
0.0510/10

Conservative balance sheet, low leverage

Altman Z-ScoreHealth
7.4910/10

Safe zone — low bankruptcy risk

Price/BookValuation
2.3x8/10

Reasonable price relative to book value

Revenue GrowthGrowth
20.3%8/10

Revenue surging 20.3% year-over-year

EPS GrowthGrowth
20.1%8/10

Earnings expanding 20.1% YoY

ZWS1 strengths · Avg: 8.0/10
EPS GrowthGrowth
37.2%8/10

Earnings expanding 37.2% YoY

Areas to Watch

ERII3 concerns · Avg: 2.0/10
Market CapQuality
$412.88M3/10

Smaller company, higher risk/reward

PEG RatioValuation
3.332/10

Expensive relative to growth rate

Operating MarginProfitability
-103.3%1/10

Operating margin of -103.3%

ZWS3 concerns · Avg: 4.0/10
PEG RatioValuation
1.704/10

Expensive relative to growth rate

P/E RatioValuation
39.3x4/10

Premium valuation, high expectations priced in

Altman Z-ScoreHealth
1.534/10

Distress zone — elevated risk

Comparative Analysis Report

WallStSmart Research

Bull Case : ERII

The strongest argument for ERII centers on Debt/Equity, Altman Z-Score, Price/Book. Profitability is solid with margins at 15.1% and operating margin at -103.3%. Revenue growth of 20.3% demonstrates continued momentum.

Bull Case : ZWS

The strongest argument for ZWS centers on EPS Growth. Revenue growth of 11.4% demonstrates continued momentum.

Bear Case : ERII

The primary concerns for ERII are Market Cap, PEG Ratio, Operating Margin.

Bear Case : ZWS

The primary concerns for ZWS are PEG Ratio, P/E Ratio, Altman Z-Score.

Key Dynamics to Monitor

ERII profiles as a growth stock while ZWS is a value play — different risk/reward profiles.

ERII carries more volatility with a beta of 0.92 — expect wider price swings.

ERII is growing revenue faster at 20.3% — sustainability is the question.

ZWS generates stronger free cash flow (43M), providing more financial flexibility.

Bottom Line

ZWS scores higher overall (59/100 vs 57/100) and 11.4% revenue growth. Both earn "Buy" and "Buy" ratings respectively — the choice depends on your investment horizon and risk tolerance.

This analysis is generated from publicly available financial data. Not financial advice.

Energy Recovery Inc

INDUSTRIALS · POLLUTION & TREATMENT CONTROLS · USA

Energy Recovery, Inc. designs, manufactures and sells various solutions for the industrial fluid flow markets worldwide. The company is headquartered in San Leandro, California.

Zurn Elkay Water Solutions Corporation

INDUSTRIALS · POLLUTION & TREATMENT CONTROLS · USA

Zurn Water Solutions Corporation designs, acquires, manufactures, and markets water system solutions that provide and improve water quality, safety, flow control, and conservation in and around non-residential buildings. The company is headquartered in Milwaukee, Wisconsin.

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