Special Industry Machinery, NEC
Energy Recovery, Inc., together with its subsidiaries, designs, manufactures, and sells various solutions for the seawater reverse osmosis desalination and industrial wastewater treatment industries worldwide. The company operates through Water and Emerging Technologies segments. It offers a suite of products, including energy recovery devices, and high-pressure feed and recirculation pumps; hydraulic turbochargers and boosters; and spare parts, as well as repair, field, and commissioning services. The company also offers a solution to reduce energy consumption in natural gas processing and in refrigeration systems that use carbon dioxide. It provides its products under the ERI, PX, Pressure Exchanger, PX Pressure Exchanger, Ultra PX, PX G, PX G1300, PX PowerTrain, AT, and Aquabold brands to large engineering, procurement, and construction firms; end-users and industry consultants; original equipment manufacturers; and aftermarket customers. The company was incorporated in 2001 and is headquartered in San Leandro, California.
Discounted Cash Flow Valuation of Energy Recovery, Inc.
Growth
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Discount
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Multiple
g\r | +10% | +11% | +12% | +13% | +14% |
---|---|---|---|---|---|
0% | 10 | 9 | 8 | 8 | 7 |
+1% | 11 | 10 | 9 | 8 | 8 |
+2% | 13 | 11 | 10 | 9 | 8 |
+3% | 14 | 13 | 11 | 10 | 9 |
+4% | 17 | 14 | 12 | 11 | 10 |
Years | 0 | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | TV |
---|---|---|---|---|---|---|---|---|---|---|---|---|
FCF | $20.78M | $18.88M | $17.16M | $15.59M | $14.16M | $12.87M | $11.69M | $10.62M | $9.65M | $8.768M | $7.966M | $79.66M |
DCF | $16.42M | $12.97M | $10.25M | $8.097M | $6.397M | $5.054M | $3.993M | $3.155M | $2.492M | $1.969M | $19.69M | |
Value | $90.49M |
In the chart Earnings are multiplied by this value.
High margins render the company resilient under dire circumstances, hence able to drive competitors out or acquire them. ROE and ROA measure the average flow generated by each invested dollar. Their marginal value is a forecast of future growth, and it is considered by Buffett and Munger the most important single indicator.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Net Margin | -27% | 1.8% | 18% | 30% | 13% | 22% | 14% | 19% | 17% | 15% |
ROA | -7.8% | 0.43% | 2.6% | 6.4% | 6.5% | 16% | 6.6% | 12% | 9% | 8.4% |
ROE | -18% | 1.6% | 15% | 19% | 8% | 15% | 8% | 13% | 9.8% | 9% |
The average Net Margin over the past 5 years is +19%.
The trend of Net Margin over the past 5 years is -1.52%.
The average ROA over the past 5 years is +9.35%.
The trend of ROA over the past 5 years is +0.58%.
The average ROE over the past 5 years is +12.27%.
The trend of ROE over the past 5 years is -1.17%.
Being debt the number one cause of investment losses and company death, the ratio Debt/FCF is of utmost importance to guarantee safety. On the other hand the Graham’s stability measures the drawdown of earnings, hence indicating the reliability of the flow generated by the company.
Years | 12-2015 | 12-2016 | 12-2017 | 12-2018 | 12-2019 | 12-2020 | 12-2021 | 12-2022 | 12-2023 | TTM |
---|---|---|---|---|---|---|---|---|---|---|
Debt FCF | 0.00 | 0.01 | -0.01 | 0.00 | - | - | - | - | - | - |
Debt Equity | 0.00 | 0.00 | 0.00 | 0.00 | - | - | - | - | - | - |
MIN | ||||||||||
Graham Stability | - | - | - | 100% | 92% | 100% | 72% | 100% | 100% | 72% |
The Debt/FCF trailing twelve month is -.
The trend of Debt/FCF over the past 5 years is -.
Graham’s Stability measure stands at 0.72.
Growth can be dangerous when forecasting, simply projecting the current growth is in general wrong. A company passes through multiple phases, from being young and unprofitable, to the first periods of profitability and high growth, until it arrives at a period of regime with limited growth. Identifying in which phase the company is in may help forecasting.
Years | 12-2016 | 12-2018 | 12-2020 | 12-2022 | Trend |
---|---|---|---|---|---|
Revenue | 12% | 11% | 2.6% | 2.2% | -3.9% |
Net Income | 54% | -0.54% | -6.6% | -11% | -120% |
Stockholders Equity | 19% | 14% | 8.6% | 19% | 0.97% |
FCF | 29% | 59% | 33% | 180% | 31% |
The Revenue CAGR over the past 5 years is +11.49%.
The trend of Revenue growth rate over the past 5 years is -3.92%.
The Earnings CAGR over the past 5 years is -0.54%.
The trend of Earnings growth rate over the past 5 years is -118.96%.
The Equity CAGR over the past 5 years is +14.16%.
The trend of Equity growth rate over the past 5 years is +0.97%.
The FCF CAGR over the past 5 years is +58.74%.
The trend of FCF growth rate over the past 5 years is +30.75%.