Energy Recovery, Inc. (ERII) AI Stock Analysis

Energy Recovery, Inc. designs, manufactures, and distributes specialized solutions for seawater reverse osmosis desalination and industrial wastewater treatment. Through its Water and Emerging Technologies segments, the company supplies energy recovery devices, high-pressure feed and recirculation pumps, hydraulic turbochargers, boosters, and replacement parts under brands such as ERI, Ultra PX, Pressure Exchanger, and VorTeq. It also provides maintenance, field support, and commissioning services. Outside of water infrastructure, Energy Recovery produces technologies engineered to cut energy usage in natural gas processing and carbon dioxide refrigeration systems, selling to engineering and procurement contractors, original equipment manufacturers, and aftermarket operators.

From FY2020 to FY2025, Energy Recovery grew revenue at a 5-year CAGR of 7.9%. Top-line sales increased from $103.9M in FY2021 to a high of $144.9M in FY2024 before contracting 7.1% to $134.7M in FY2025. Gross margin decreased from 68.6% in FY2021 to 65.2% in FY2025, while net margin rose from 13.7% to 17.0%, generating $23.0M in FY2025 net income. Over the trailing twelve months, revenue totaled $120.6M with an operating margin of -41.9% and diluted EPS of $0.26. For the quarter ended June 30, 2026, revenue fell 57.2% year-over-year, while quarterly earnings grew 20.1%.

As of June 30, 2026, Energy Recovery held $93.1M in cash and short-term investments against $8.2M in total debt, leaving net cash of $84.8M. Liquidity is supported by a current ratio of 8.05 and a debt-to-equity ratio of 0.05 against $172.5M in shareholders' equity. In FY2025, the company generated $17.4M in free cash flow, funded $1.3M in capital expenditures, and spent $35.6M on share buybacks, which helped lower its share count by 12.0% over five years.

Trading at a market cap of $339.4M and enterprise value of $262.3M, Energy Recovery has a trailing P/E of 25.6x and forward P/E of 21.2x. These compare to a trailing P/E of 24.8x and forward P/E of 17.2x for the median of its US-listed Industrials peers. Its EV/EBITDA of 12.0x sits below the peer median of 13.9x, while its price-to-sales ratio of 2.8x exceeds the peer median of 1.5x. Over the past year, ERII fell 60.4%, lagging the 16.8% return of the S&P 500.

Wall Street analyst coverage stands at 4 Hold ratings, with 0 Buy, Strong Buy, Sell, or Strong Sell ratings. The mean price target of $8.00 implies 20.3% upside compared to the last close of $6.65. For the fiscal year ending December 31, 2026, consensus estimates project revenue of $72.8M and an EPS of -$0.02, representing a 103.5% earnings contraction. The company exceeded EPS expectations in 2 of the past 4 quarters, and its next earnings report is scheduled for November 4, 2026.

This page is an AI-written research summary of Energy Recovery, Inc. (ERII). The text was generated on October 30, 2026 from Quotelinks data as of October 16, 2026 (company profile, annual results, latest balance sheet, valuation, price performance and analyst estimates). An automatic check rejects any draft that contains a figure not found in that data. It is not investment advice; verify figures on the linked tabs before making decisions.

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