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 1382% more annual revenue ($1.79B vs $120.57M). ZWS leads profitability with a 15.4% profit margin vs 12.7%. ZWS appears more attractively valued with a PEG of 1.56. ZWS earns a higher WallStSmart Score of 70/100 (B-).

ERII

Hold

45

out of 100

Grade: D+

Growth: 4.7Profit: 5.0Value: 4.0Quality: 9.0
Piotroski: 4/9Altman Z: 7.49

ZWS

Strong Buy

70

out of 100

Grade: B-

Growth: 7.3Profit: 8.0Value: 4.7Quality: 7.5
Piotroski: 5/9Altman Z: 1.53
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

ERIIOvervalued (-10.1%)

Margin of Safety

-10.1%

Fair Value

$14.03

Current Price

$7.55

$6.48 premium

UndervaluedFair: $14.03Overvalued
ZWSOvervalued (-5.6%)

Margin of Safety

-5.6%

Fair Value

$48.83

Current Price

$46.18

$2.65 premium

UndervaluedFair: $48.83Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

ERII4 strengths · Avg: 9.0/10
Debt/EquityHealth
0.0510/10

Conservative balance sheet, low leverage

Altman Z-ScoreHealth
7.4910/10

Safe zone — low bankruptcy risk

Price/BookValuation
2.2x8/10

Reasonable price relative to book value

EPS GrowthGrowth
20.1%8/10

Earnings expanding 20.1% YoY

ZWS2 strengths · Avg: 10.0/10
Operating MarginProfitability
31.4%10/10

Strong operational efficiency at 31.4%

EPS GrowthGrowth
132.0%10/10

Earnings expanding 132.0% YoY

Areas to Watch

ERII4 concerns · Avg: 2.8/10
P/E RatioValuation
29.7x4/10

Moderate valuation

Market CapQuality
$394.58M3/10

Smaller company, higher risk/reward

PEG RatioValuation
3.332/10

Expensive relative to growth rate

Revenue GrowthGrowth
-57.2%2/10

Revenue declined 57.2%

ZWS3 concerns · Avg: 4.0/10
PEG RatioValuation
1.564/10

Expensive relative to growth rate

P/E RatioValuation
29.6x4/10

Moderate valuation

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.

Bull Case : ZWS

The strongest argument for ZWS centers on Operating Margin, EPS Growth. Profitability is solid with margins at 15.4% and operating margin at 31.4%. Revenue growth of 10.5% demonstrates continued momentum.

Bear Case : ERII

The primary concerns for ERII are P/E Ratio, Market Cap, PEG Ratio.

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 declining stock while ZWS is a mature play — different risk/reward profiles.

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

ZWS is growing revenue faster at 10.5% — sustainability is the question.

ZWS generates stronger free cash flow (156M), providing more financial flexibility.

Bottom Line

ZWS scores higher overall (70/100 vs 45/100), backed by strong 15.4% margins and 10.5% revenue growth. Both earn "Strong Buy" and "Hold" 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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