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 1156% more annual revenue ($1.70B vs $134.99M). ERII leads profitability with a 17.0% profit margin vs 11.7%. ZWS appears more attractively valued with a PEG of 1.68. ERII earns a higher WallStSmart Score of 59/100 (C).

ERII

Buy

59

out of 100

Grade: C

Growth: 4.7Profit: 7.5Value: 6.0Quality: 8.5
Piotroski: 2/9Altman Z: 6.13

ZWS

Buy

56

out of 100

Grade: C

Growth: 6.0Profit: 6.5Value: 7.3Quality: 6.8
Piotroski: 5/9Altman Z: 1.53
IV

Intrinsic Value Comparison

Multi-model valuation · Graham Formula

ERIIUndervalued (+5.6%)

Margin of Safety

+5.6%

Fair Value

$16.36

Current Price

$10.17

$6.19 discount

UndervaluedFair: $16.36Overvalued
ZWSSignificantly Overvalued (-51.8%)

Margin of Safety

-51.8%

Fair Value

$33.96

Current Price

$46.21

$12.25 premium

UndervaluedFair: $33.96Overvalued

Key Strengths & Concerns

Side-by-side fundamental analysis

Key Strengths

ERII5 strengths · Avg: 9.2/10
Operating MarginProfitability
46.5%10/10

Strong operational efficiency at 46.5%

Debt/EquityHealth
0.0610/10

Conservative balance sheet, low leverage

Altman Z-ScoreHealth
6.1310/10

Safe zone — low bankruptcy risk

Price/BookValuation
2.6x8/10

Reasonable price relative to book value

EPS GrowthGrowth
20.1%8/10

Earnings expanding 20.1% YoY

ZWS0 strengths · Avg: 0/10

No standout strengths identified

Areas to Watch

ERII4 concerns · Avg: 2.5/10
Market CapQuality
$501.12M3/10

Smaller company, higher risk/reward

Piotroski F-ScoreQuality
2/93/10

Weak financial health signals

PEG RatioValuation
3.332/10

Expensive relative to growth rate

Revenue GrowthGrowth
-0.3%2/10

Revenue declined 0.3%

ZWS3 concerns · Avg: 3.3/10
PEG RatioValuation
1.684/10

Expensive relative to growth rate

Altman Z-ScoreHealth
1.534/10

Distress zone — elevated risk

P/E RatioValuation
40.6x2/10

Premium valuation, high expectations priced in

Comparative Analysis Report

WallStSmart Research

Bull Case : ERII

The strongest argument for ERII centers on Operating Margin, Debt/Equity, Altman Z-Score. Profitability is solid with margins at 17.0% and operating margin at 46.5%.

Bull Case : ZWS

ZWS has a balanced fundamental profile.

Bear Case : ERII

The primary concerns for ERII are Market Cap, Piotroski F-Score, PEG Ratio.

Bear Case : ZWS

The primary concerns for ZWS are PEG Ratio, Altman Z-Score, P/E Ratio. A P/E of 40.6x leaves little room for execution misses.

Key Dynamics to Monitor

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

ERII carries more volatility with a beta of 1.10 — expect wider price swings.

ZWS is growing revenue faster at 9.8% — sustainability is the question.

ZWS generates stronger free cash flow (83M), providing more financial flexibility.

Bottom Line

ERII scores higher overall (59/100 vs 56/100), backed by strong 17.0% margins. 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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