Key Takeaways

Global water scarcity and stricter regulations are fueling demand for NX Filtration's advanced solutions, supporting sustained market expansion and long-term growth prospects.
Geographic diversification, OEM partnerships, and operational efficiencies are driving revenue resilience, margin improvement, and increased predictability through cross-selling and repeat business.
Reliance on a few large, high-risk projects, lack of revenue diversification, cost pressures from tariffs, and stronger competition threaten revenue stability and long-term profitability.

Catalysts

About NX Filtration

Develops, produces, and sells hollow fiber membrane modules in the Netherlands, Europe, North America, Asia, and internationally.What are the underlying business or industry changes driving this perspective?

Accelerating adoption of NX Filtration's technology is underpinned by the global intensification of water scarcity and tightening regulatory frameworks (e.g., Europe Wastewater Treatment Directive), driving robust, long-term demand for advanced filtration solutions-this supports sustained growth in revenues and top-line expansion.
Successful commercial execution with expansion into new geographies (notably Asia, North America, Europe, and the Middle East) and strong OEM partnership growth (funnel now at 175 OEMs and increasing) broadens the addressable market and de-risks regional dependency, supporting more resilient multi-market revenue streams and smart channel diversification.
Repeat orders, growing installed base, and "high-yield" focus (prioritizing the right products, regions, and OEMs) are laying the foundation for increasing replacement sales and cross-selling opportunities, boosting revenue predictability and cash generation in coming years.
Ongoing product and process innovation (notably in hollow fiber nanofiltration technology), combined with recently completed and consolidated manufacturing scale, is already delivering operational efficiencies-seen in reduced FTE, lower operating costs, and improved EBITDA-positioning the company for further gross margin and net margin expansion.
Heightened emphasis on sustainability (energy and chemical savings, CO2 reduction) and ESG initiatives globally is accelerating end-user preference for NX Filtration's differentiated solutions, potentially supporting pricing power, larger contract wins, and favorable long-term earnings growth.

NX Filtration Earnings and Revenue Growth

NX Filtration Future Earnings and Revenue Growth

Assumptions

How have these above catalysts been quantified?

Analysts are assuming NX Filtration's revenue will grow by 71.3% annually over the next 3 years.
Analysts are not forecasting that NX Filtration will become profitable in next 3 years. To represent the Analyst Price Target as a Future PE Valuation we will estimate NX Filtration's profit margin will increase from -261.2% to the average NL Machinery industry of 8.3% in 3 years.
If NX Filtration's profit margin were to converge on the industry average, you could expect earnings to reach €4.4 million (and earnings per share of €0.08) by about September 2028, up from €-27.6 million today.
In order for the above numbers to justify the analysts price target, the company would need to trade at a PE ratio of 66.7x on those 2028 earnings, up from -6.2x today. This future PE is greater than the current PE for the NL Machinery industry at 20.6x.
Analysts expect the number of shares outstanding to remain consistent over the next 3 years.
To value all of this in today's terms, we will use a discount rate of 6.34%, as per the Simply Wall St company report.

NX Filtration Future Earnings Per Share Growth

Risks

What could happen that would invalidate this narrative?

The company is still operating at a net loss (€12.7 million in H1 2025) and has yet to achieve breakeven, with profitability relying on further top-line growth, cost discipline, and operational efficiency – high ongoing losses put pressure on net margins and earnings sustainability.
NX Filtration's short-term and mid-term revenue growth is increasingly dependent on conversion of a small number of large, long-cycle nanofiltration projects that are subject to risks such as permitting, civil works, and customer financing; delays or cancellations in these may cause volatile revenues and unpredictable cash flows.
The company maintains limited disclosure on sales split per product and region, which may reflect both a lack of diversification or potential revenue concentration risks – if a key OEM relationship or region weakens, there could be outsized impacts to revenue.
Tariffs imposed by the EU and US (15% on certain water filtration imports) add cost pressures for NX Filtration and its peers; while management claims margin insulation due to product differentiation, persistent or increasing trade barriers could dampen competitiveness, reduce market access, or compress gross margins.
Despite global water scarcity driving long-term demand, intensifying competition from larger filtration technology providers and ongoing customer due diligence (especially among larger, slower-moving OEMs) may slow pace of commercial adoption, constrain market share gains, or force more aggressive pricing, pressuring both revenue growth and future profitability.

Valuation

How have all the factors above been brought together to estimate a fair value?

The analysts have a consensus price target of €4.2 for NX Filtration based on their expectations of its future earnings growth, profit margins and other risk factors. However, there is a degree of disagreement amongst analysts, with the most bullish reporting a price target of €5.3, and the most bearish reporting a price target of just €3.1.
In order for you to agree with the analyst's consensus, you'd need to believe that by 2028, revenues will be €53.1 million, earnings will come to €4.4 million, and it would be trading on a PE ratio of 66.7x, assuming you use a discount rate of 6.3%.
Given the current share price of €2.93, the analyst price target of €4.2 is 30.2% higher.
We always encourage you to reach your own conclusions though. So sense check these analyst numbers against your own assumptions and expectations based on your understanding of the business and what you believe is probable.

Global Water Scarcity Will Sustain Demand For Advanced Filtration

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