Energy Recovery Inc (ERII) is overvalued and Zurn Elkay Water Solutions Corp (ZWS) is overvalued.
Both trade above our estimate of their intrinsic value. ERII is the closer of the two: -62%, against -126% for ZWS.
Values as of the 22 Sept 2026 close.
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
Discounting its cash flows at 10.0% (average of 3 methods) values the shares at $20.76; the price of $46.91 is 126% above that value, and 72% of that value comes from beyond year five.
Leak Score 59/100 on 3 of 12 signals
| Metric | ERII | ZWS |
|---|---|---|
| Verdict | Overvalued | Overvalued |
| Price | $7.12 | $46.91 |
| Intrinsic value | $4.38 | $20.76 |
| Margin of safety | -62% | -126% |
| Leak Score | 60/100 (9/12) | 59/100 (3/12) |
| Market cap | $363M | $7.8B |
| Revenue growth, 5 years | 2.6% | -2.4% |
| Operating margin | 16.3% | 21.3% |
| Net margin | 12.7% | 15.4% |
| Return on equity | 8.6% | 16.9% |
| Debt to equity | 0.05 | 0.33 |
| P/E | 25.2x | 28.8x |
| Forward P/E | 44.0x | 23.1x |
| P/B | 2.1x | 4.7x |
| Dividend yield | — | 0.9% |