Energy Recovery, Inc. · Special Industry Machinery, NEC

ERII

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The short version

A high-quality, profitable business with shrinking sales.

Going well

Profitable every year for 10 years
Brings in more cash than it spends
Buying back shares: share count down 6.0% in 3 years

Watch out for

Sales down 57% in the latest quarter vs a year ago

Money moves

No insider buying or selling in the last 30 days
Institutions cut 1% from their holdings in the quarter ending June 2026 (121 bought, 82 sold)

Facts from SEC filings, not a recommendation.

What the price means

Price as of Oct 26

$6.79+1.9% that day

Company value: $347M; Share price times all shares
Price vs profit (P/E): 25.1x; You pay about $25 for each $1 of yearly profit
Price vs sales: 2.9x; Company value is 2.9 times a year of sales
Cash vs value: 18%; Cash as a share of company value

From ERII's last IEX trade and its SEC filings (profits and sales over the last four quarters). A starting point for research, not a verdict.

The business over time

Last 12 quarters, from SEC filings

Sales, Jun '26

$12.0M-57% vs a year earlier

Sep '23Tap a barJun '26

Last 12 months: $120.6M, down 15% from the 12 months before. Over 5 years, sales grew about 2.6% a year.

What the price assumes

Your guesses, our math

Move the sliders to your own view of ERII. Starting points are the company's recent numbers.

Sales growth-10% a yearRecently: -15% a yearProfit margin13%Last 12 months: 12.7%P/E at the end25xToday: 25.1x. Many steady companies trade at 12x to 25xShare count change-2% a yearBelow zero means buybacks; above zero means new shares (dilution)

Sales in 5 years$71M

Profit in 5 years$9M

Price these guesses point to$5.01-26% vs $6.79 todayAbout -5.9% a year, before dividends

What today's price needs: with a 13% margin and a 25x P/E, sales could shrink about 4.4% a year for 5 years and still match today's price.

Simple math on your guesses, not a forecast or a price target. Real results depend on many things these sliders leave out.

Price

Price chart by TradingView.

Business quality

The checklist Warren Buffett-style investors use. Annual numbers for 2025.

6/7Strong

MissReturn on equity 15%+Earns a lot on the money owners have in the business.11.0%
PassDebt under half of equityNot relying on borrowed money.No debt reported
PassNet margin 10%+Keeps at least 10 cents of profit from each dollar of sales.17.0%
PassProfitable every yearSteady profits, not one good year.10 of 10 years
PassFree cash flow positiveBrings in more cash than it spends to run and grow.$17.4M
PassShare count not growingNot diluting owners. Falling means buybacks.-6.0% in 3 years
PassGross margin 40%+Pricing power: sells for well above what it costs to make.65.1%

Revenue: $135.0M; -6.9% vs prior year
5-year growth: +2.6%/yr; revenue, per year
Total debt: None; 0.00x equity
Current ratio: 10.44x; short-term assets / bills due

From annual reports filed with the SEC. A checklist is a starting point for research, not a verdict.