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Flowserve Corp (FLS)
NYSE:FLS

Flowserve (FLS) AI Stock Analysis

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Flowserve

(NYSE:FLS)

Rating:78Outperform
Price Target:
$56.00
▲( 12.88% Upside)
Flowserve's strong financial performance and positive earnings call are the most significant factors driving the score, indicating a solid foundation for growth. Technical analysis shows moderate bullish momentum, while valuation suggests potential overvaluation, slightly tempering the overall outlook.
Positive Factors
Backlog and Orders
Backlog at all-time highs, orders still growing, and book to bill over 1x combined with a self-help margin story and a clearly invigorated aftermarket business.
Earnings and Margin Expansion
The company's earnings power and trajectory are attractive, with a compelling internally-fueled margin expansion story.
Energy Transition
FLS is a major beneficiary of the global energy transition story and the need to invest materially in power capacity for broad electrification and datacenter trends.
Negative Factors
Earnings Per Share
Fourth-quarter earnings per share was below expectations.
Market Reaction
The stock reaction is seen as an attractive entry point due to no major fundamental changes and potential upside in long-term margin targets.
Valuation Concerns
Valuation at low DD P/E is attractive, but recent underperformance creates an opportunity to turn more constructive on a company with a positive bias.

Flowserve (FLS) vs. SPDR S&P 500 ETF (SPY)

Flowserve Business Overview & Revenue Model

Company DescriptionFlowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally. It operates in two segments, Flowserve Pump Division (FPD) and Flow Control Division (FCD). The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines. The FCD segment provides engineered and industrial valve and automation solutions, including isolation and control valves, actuation, controls, and related equipment, as well as equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. This segment's products are used to control, direct, and manage the flow of liquids, gases, and fluids. The company primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications. The company distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was incorporated in 1912 and is headquartered in Irving, Texas.
How the Company Makes MoneyFlowserve generates revenue primarily through the sale of its widely recognized brands of pumps, valves, seals, and associated services. The company's financial model relies on a combination of product sales, aftermarket services, and customer support. Significant revenue streams include the manufacture and sale of engineered and industrial products to end-users and distributors, as well as providing maintenance, repair, and engineering services. Flowserve's earnings are bolstered by long-term service agreements and a strong aftermarket business that supports a large installed base of equipment. Key partnerships with industry leaders and strategic acquisitions also play a vital role in expanding its market reach and enhancing its technological capabilities.

Flowserve Financial Statement Overview

Summary
Flowserve presents a robust financial position with steady revenue and profit growth, improved profitability margins, and strong cash flow generation. The balance sheet reflects a solid equity base with reduced leverage, enhancing financial stability. While liabilities have increased, the company's operational efficiency and cash management remain strong, positioning it well for future growth in the industrial goods sector.
Income Statement
85
Very Positive
Flowserve has demonstrated strong revenue growth with a 5.48% increase from 2023 to 2024, and a substantial 19.51% increase from 2022 to 2023. Gross profit margins have been consistently healthy, maintaining around 31.5% in 2024. Net profit margins showed improvement, growing from 4.32% in 2023 to 6.20% in 2024, indicating enhanced profitability. The EBIT margin also improved significantly to 10.14% in 2024. However, the EBITDA margin in 2024 remains consistent with the EBIT margin, indicating stable operational efficiency. Overall, the income statement reflects solid profitability and growth trends.
Balance Sheet
75
Positive
The company has maintained a moderate debt-to-equity ratio, improving from 0.73 in 2023 to 0.11 in 2024, reflecting reduced leverage. The ROE improved to 14.09% in 2024, signaling effective utilization of equity to generate profit. The equity ratio stands at 36.49% in 2024, indicating a stable financial structure. However, the total liabilities have increased over time, which should be monitored for potential risks.
Cash Flow
80
Positive
Flowserve's free cash flow showed a robust growth of 33.19% from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio improved significantly, demonstrating effective cash management. The free cash flow to net income ratio increased to 1.22 in 2024, reflecting a healthy conversion of profits into cash. These metrics illustrate strong cash flow management and operational efficiency.
Breakdown
TTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income StatementTotal Revenue
4.61B4.56B4.32B3.62B3.54B3.73B
Gross Profit
1.48B1.43B1.30B994.29M1.05B1.12B
EBIT
494.51M462.28M333.55M197.22M270.76M250.28M
EBITDA
559.17M541.05M374.42M291.58M385.19M351.06M
Net Income Common Stockholders
282.44M282.76M186.74M188.69M125.95M130.42M
Balance SheetCash, Cash Equivalents and Short-Term Investments
540.80M675.44M545.68M434.97M658.45M1.10B
Total Assets
5.48B5.50B5.11B4.79B4.75B5.31B
Total Debt
228.71M227.46M1.40B1.46B1.50B1.94B
Net Debt
-312.09M-447.99M858.92M1.03B843.79M842.87M
Total Liabilities
3.35B3.45B3.13B2.93B2.91B3.55B
Stockholders Equity
2.08B2.01B1.94B1.82B1.80B1.73B
Cash FlowFree Cash Flow
233.97M344.29M258.41M-116.30M195.18M253.13M
Operating Cash Flow
313.12M425.31M325.77M-40.01M250.12M310.54M
Investing Cash Flow
-384.90M-387.21M-68.58M-6.09M-59.48M-41.70M
Financing Cash Flow
87.48M117.50M-153.01M-150.01M-599.71M147.59M

Flowserve Technical Analysis

Technical Analysis Sentiment
Negative
Last Price49.61
Price Trends
50DMA
47.04
Positive
100DMA
52.56
Negative
200DMA
52.91
Negative
Market Momentum
MACD
1.19
Negative
RSI
55.69
Neutral
STOCH
26.97
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLS, the sentiment is Negative. The current price of 49.61 is above the 20-day moving average (MA) of 48.65, above the 50-day MA of 47.04, and below the 200-day MA of 52.91, indicating a neutral trend. The MACD of 1.19 indicates Negative momentum. The RSI at 55.69 is Neutral, neither overbought nor oversold. The STOCH value of 26.97 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLS.

Flowserve Risk Analysis

Flowserve disclosed 29 risk factors in its most recent earnings report. Flowserve reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Flowserve Peers Comparison

Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
ITITT
82
Outperform
$11.67B23.5919.27%0.88%6.99%23.25%
80
Outperform
$7.26B32.049.07%11.65%340.94%
80
Outperform
$7.00B34.6315.24%10.78%30.05%
FLFLS
78
Outperform
$6.46B23.1514.00%1.70%4.23%20.40%
74
Outperform
$5.40B25.356.93%-4.01%-8.86%
MIMIR
72
Outperform
$4.13B-0.68%7.25%87.34%
64
Neutral
$4.39B11.815.20%249.38%3.96%-12.36%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FLS
Flowserve
49.61
0.89
1.83%
GTLS
Chart Industries
157.86
7.04
4.67%
ITT
ITT
147.35
11.05
8.11%
SPXC
SPX
149.77
5.43
3.76%
GTES
Gates Industrial
20.94
3.26
18.44%
MIR
Mirion Technologies
18.84
8.11
75.58%

Flowserve Earnings Call Summary

Earnings Call Date:Apr 29, 2025
(Q1-2025)
|
% Change Since: 10.54%|
Next Earnings Date:Jul 31, 2025
Earnings Call Sentiment Neutral
The earnings call highlighted strong performance in bookings, revenue, and margin expansion, with notable achievements in the nuclear and power sectors. However, challenges related to tariffs and macroeconomic uncertainty were significant concerns. Cash flow issues also posed challenges. Overall, strong operational results were offset by external economic pressures.
Q1-2025 Updates
Positive Updates
Strong Start to 2025
Bookings grew 18% to $1.2 billion, revenue increased 5%, adjusted gross margins expanded 180 basis points to 33.5%, and adjusted EPS increased by nearly 25% to $0.72.
Record Aftermarket Bookings
Aftermarket bookings reached almost $690 million, marking the fourth consecutive quarter above $600 million, benefiting from a significant $50 million nuclear order.
Nuclear and Power Sector Growth
Nuclear bookings exceeded $100 million for the third consecutive quarter, while power bookings rose more than 45% compared to the prior year.
Operational Excellence and Margin Expansion
Adjusted operating margins increased to 12.8%, with FPD operating margins reaching 17.7%, a 280 basis point improvement, and FCD also showed margin expansion.
Negative Updates
Tariff Impact Concerns
The company faces a potential $90 million to $100 million annualized gross impact from tariffs, with significant exposure in the flow control side of the business.
Macroeconomic Uncertainty
Concerns over macroeconomic uncertainty and potential slowdown in project bookings in the second half of 2025 due to global market volatility and tariffs.
Cash Flow Challenges
Cash from operations was a $50 million use of cash in the quarter, driven by higher temporary working capital requirements.
Company Guidance
During Flowserve's first quarter 2025 earnings call, the company provided robust guidance underpinned by a strong start to the year. Bookings increased by 18% to $1.2 billion, and revenue rose by 5%, contributing to an adjusted operating margin of 12.8%. The adjusted earnings per share reached $0.72, marking a 25% increase from the previous year. The book-to-bill ratio was 1.07, with notable growth in aftermarket bookings and nuclear activity. Flowserve's 3D strategy accounted for 31% of total awards. Despite potential macroeconomic uncertainties and the impact of tariffs, the company reaffirmed its full-year guidance, projecting organic growth of 3% to 5% and adjusted EPS of $3.10 to $3.30, representing an 18% to 25% year-over-year increase. The company also highlighted its strategic actions to mitigate tariff impacts, aiming to fully offset an estimated $90 million to $100 million annualized gross impact through price adjustments and supply chain optimizations.

Flowserve Corporate Events

Executive/Board ChangesShareholder Meetings
Flowserve Holds 2025 Annual Meeting with Key Decisions
Neutral
May 19, 2025

On May 16, 2025, Flowserve held its virtual 2025 Annual Meeting with 114,371,672 shares present, representing 86.86% of eligible shares. During the meeting, shareholders elected directors for terms expiring in 2026, approved executive compensation, ratified PricewaterhouseCoopers LLP as the independent registered public accounting firm for 2025, and rejected a proposal to eliminate the one-year holding period requirement for calling a special shareholder meeting.

The most recent analyst rating on (FLS) stock is a Hold with a $69.00 price target. To see the full list of analyst forecasts on Flowserve stock, see the FLS Stock Forecast page.

Financial Disclosures
Flowserve Reports Strong Q1 2025 Financial Results
Positive
Apr 29, 2025

Flowserve Corporation reported its financial results for the first quarter of 2025, showing a strong start to the year with significant growth in bookings and operating income. The company achieved first quarter bookings of $1.2 billion, with record aftermarket bookings and a notable increase in power bookings. Operating income rose by 17% compared to the previous year, and the company reaffirmed its full-year 2025 guidance, despite global uncertainties due to increasing tariffs.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.