NasdaqGS:ERII

Stock Analysis Report

Executive Summary

Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and markets various solutions for industrial fluid flow markets worldwide.


Snowflake Analysis

Flawless balance sheet with reasonable growth potential.


Similar Companies

Share Price & News

How has Energy Recovery's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: ERII's share price has been volatile over the past 3 months.


Market Performance


7 Day Return

4.2%

ERII

7.2%

US Machinery

5.3%

US Market


1 Year Return

-17.3%

ERII

-22.4%

US Machinery

-10.7%

US Market

Return vs Industry: ERII exceeded the US Machinery industry which returned -22.4% over the past year.

Return vs Market: ERII underperformed the US Market which returned -10.7% over the past year.


Shareholder returns

ERIIIndustryMarket
7 Day4.2%7.2%5.3%
30 Day-25.1%-19.0%-13.6%
90 Day-23.7%-29.4%-19.8%
1 Year-17.3%-17.3%-20.1%-22.4%-8.9%-10.7%
3 Year-7.8%-7.8%0.4%-6.9%15.5%8.0%
5 Year112.9%112.9%21.8%6.4%35.2%20.4%

Price Volatility Vs. Market

How volatile is Energy Recovery's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Energy Recovery undervalued compared to its fair value and its price relative to the market?

21.2%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: ERII ($7.43) is trading below our estimate of fair value ($9.43)

Significantly Below Fair Value: ERII is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: ERII is poor value based on its PE Ratio (37.3x) compared to the Machinery industry average (15.5x).

PE vs Market: ERII is poor value based on its PE Ratio (37.3x) compared to the US market (13.1x).


Price to Earnings Growth Ratio

PEG Ratio: ERII is good value based on its PEG Ratio (1x)


Price to Book Ratio

PB vs Industry: ERII is overvalued based on its PB Ratio (3x) compared to the US Machinery industry average (1.6x).


Next Steps

Future Growth

How is Energy Recovery forecast to perform in the next 1 to 3 years based on estimates from 5 analysts?

37.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: ERII's forecast earnings growth (37.9% per year) is above the savings rate (1.7%).

Earnings vs Market: ERII's earnings (37.9% per year) are forecast to grow faster than the US market (12.3% per year).

High Growth Earnings: earnings are expected to grow significantly over the next 3 years.

Revenue vs Market: ERII's revenue (17.3% per year) is forecast to grow faster than the US market (7.2% per year).

High Growth Revenue: ERII's revenue (17.3% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: ERII's Return on Equity is forecast to be low in 3 years time (14.3%).


Next Steps

Past Performance

How has Energy Recovery performed over the past 5 years?

65.1%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: ERII has a high level of non-cash earnings.

Growing Profit Margin: ERII's current net profit margins (12.6%) are lower than last year (29.6%).


Past Earnings Growth Analysis

Earnings Trend: ERII has become profitable over the past 5 years, growing earnings by 65.1% per year.

Accelerating Growth: ERII's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: ERII had negative earnings growth (-50.6%) over the past year, making it difficult to compare to the Machinery industry average (-2%).


Return on Equity

High ROE: ERII's Return on Equity (8%) is considered low.


Next Steps

Financial Health

How is Energy Recovery's financial position?


Financial Position Analysis

Short Term Liabilities: ERII's short term assets ($113.0M) exceed its short term liabilities ($27.8M).

Long Term Liabilities: ERII's short term assets ($113.0M) exceed its long term liabilities ($24.9M).


Debt to Equity History and Analysis

Debt Level: ERII is debt free.

Reducing Debt: ERII had no debt 5 years ago.

Debt Coverage: ERII has no debt, therefore it does not need to be covered by operating cash flow.

Interest Coverage: ERII has no debt, therefore coverage of interest payments is not a concern.


Balance Sheet

Inventory Level: ERII has a high level of physical assets or inventory.

Debt Coverage by Assets: Insufficient data to determine if ERII's debt is covered by short term assets.


Next Steps

Dividend

What is Energy Recovery's current dividend yield, its reliability and sustainability?


Dividend Yield vs Market

Notable Dividend: Unable to evaluate ERII's dividend yield against the bottom 25% of dividend payers, as the company has not reported any payouts.

High Dividend: Unable to evaluate ERII's dividend yield against the top 25% of dividend payers, as the company has not reported any payouts.


Stability and Growth of Payments

Stable Dividend: Insufficient data to determine if ERII's dividends per share have been stable in the past.

Growing Dividend: Insufficient data to determine if ERII's dividend payments have been increasing.


Current Payout to Shareholders

Dividend Coverage: Insufficient data to calculate payout ratio to determine if its dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: No need to calculate the sustainability of ERII's dividend in 3 years as they are not forecast to pay a notable one for the US market.


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

1.3yrs

Average management tenure


CEO

Robert, Bob Mao (75yo)

0.42

Tenure

US$135,000

Compensation

Mr. Yu-Lang Mao, also known as Robert & Bob, serves as an Advisor at PAC-LINK Management Corp. Mr. Mao served as the Chairman of the Board and Chief Executive Officer of Ubee Interactive. He completed the  ...


Leadership Team

NamePositionTenureCompensationOwnership
Yu-Lang Mao
Interim President0.42yrUS$135.00k0.33% $1.3m
Joshua Ballard
Chief Financial Officer1.67yrsUS$1.63m0.0069% $28.6k
Nocair Bensalah
Vice President of Operations5.25yrsUS$783.35k0.037% $154.6k
Rodney Clemente
Senior Vice President of Water0.25yrUS$779.55k0.0028% $11.7k
Emily Smith
Senior VP of Corporate Development & Operations0.25yrno data0.0039% $15.9k
Farshad Ghasripoor
Chief Technology Officer2.42yrsno data0.050% $206.9k
James Siccardi
Vice President of Investor Relationsno datano datano data
William Yeung
General Counsel3.83yrsno data0.037% $154.8k
Stacy Proctor
Vice President of Human Resources1.25yrsno datano data
Brandon Young
Corporate Controller1.25yrsno datano data

1.3yrs

Average Tenure

47yo

Average Age

Experienced Management: ERII's management team is not considered experienced ( 1.3 years average tenure), which suggests a new team.


Board Members

NamePositionTenureCompensationOwnership
Yu-Lang Mao
Interim President0.42yrUS$135.00k0.33% $1.3m
Olav Fjell
Independent Director4.83yrsUS$135.00k0.032% $133.9k
Arve Hanstveit
Independent Director24.67yrsUS$145.00k2.19% $9.0m
Ole Lorentzen
Independent Director5.17yrsUS$140.00k1.15% $4.8m
Alexander Buehler
Independent Director5.17yrsUS$150.00k0.11% $446.4k
Sherif Foda
Independent Director3.58yrsUS$135.00kno data
Pamela Tondreau
Director0.75yrno datano data

4.8yrs

Average Tenure

64yo

Average Age

Experienced Board: ERII's board of directors are considered experienced (4.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Energy Recovery, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Energy Recovery, Inc.
  • Ticker: ERII
  • Exchange: NasdaqGS
  • Founded: 1992
  • Industry: Industrial Machinery
  • Sector: Capital Goods
  • Market Cap: US$412.863m
  • Shares outstanding: 55.49m
  • Website: https://www.energyrecovery.com

Number of Employees


Location

  • Energy Recovery, Inc.
  • 1717 Doolittle Drive
  • San Leandro
  • California
  • 94577
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
ERIINasdaqGS (Nasdaq Global Select)YesCommon StockUSUSDJul 2008
500DB (Deutsche Boerse AG)YesCommon StockDEEURJul 2008
500BRSE (Berne Stock Exchange)YesCommon StockCHCHFJul 2008

Biography

Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and markets various solutions for industrial fluid flow markets worldwide. The company operates through Water, and Oil & Gas segments. The Water segment designs, engineers, manufactures, and supplies various energy recovery devices (ERDs), including positive displacement isobaric ERDs and centrifugal-type ERDs; manufactures and supplies specialized high-pressure feed and circulation pumps that are used in the reverse osmosis desalination process; and provides various spare parts and repair, and field services, as well as engages in the various commissioning activities. It serves large engineering, procurement, and construction (EPC) firms; original equipment manufacturers (OEMs); and end-users and service providers. The Oil & Gas segment provides VorTeq, a solution for hydraulic fracturing applications; MTeq, a solution for mud pumping applications; and IsoBoost and IsoGen turbocharger solutions for gas processing and pipeline applications. It serves oilfield service companies, international and national oil companies, exploration and production companies, OEMs, and EPC firms. Energy Recovery, Inc. was founded in 1992 and is headquartered in San Leandro, California. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/04/01 06:14
End of Day Share Price2020/03/31 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.