Arq Inc (ARQ) is undervalued and Energy Recovery Inc (ERII) is overvalued.
Against our estimates of intrinsic value, ARQ trades at the wider discount: a margin of safety of +40%, against -62% for ERII.
Values as of the 22 Sept 2026 close.
A 1.5x revenue multiple, discounted for its losses, values the shares at $3.48; the price of $2.07 is 40% below that value.
Leak Score 56/100 on 2 of 12 signals
Discounting its cash flows at 9.6% (average of 3 methods) values the shares at $4.38; the price of $7.12 is 62% above that value, and 73% of that value comes from beyond year five.
Leak Score 60/100 on 9 of 12 signals
| Metric | ARQ | ERII |
|---|---|---|
| Verdict | Undervalued | Overvalued |
| Price | $2.07 | $7.12 |
| Intrinsic value | $3.48 | $4.38 |
| Margin of safety | +40% | -62% |
| Leak Score | 56/100 (2/12) | 60/100 (9/12) |
| Market cap | $90M | $363M |
| Revenue growth, 5 years | 12.3% | 2.6% |
| Operating margin | -6.6% | 16.3% |
| Net margin | -42.3% | 12.7% |
| Return on equity | -27.1% | 8.6% |
| Debt to equity | 0.23 | 0.05 |
| P/E | — | 25.2x |
| Forward P/E | 124.2x | 44.0x |
| P/B | 0.5x | 2.1x |