tiprankstipranks
Trending News
More News >
Flowserve Corp (FLS)
NYSE:FLS
Advertisement

Flowserve (FLS) AI Stock Analysis

Compare
376 Followers

Top Page

FLS

Flowserve

(NYSE:FLS)

Rating:74Outperform
Price Target:
$60.00
▲(9.99% Upside)
Flowserve's overall stock score is driven by strong financial performance and positive earnings call outcomes, despite mixed technical indicators and moderate valuation. The company's robust financial position and strategic initiatives support future growth, although challenges such as merger termination and project delays pose risks.
Positive Factors
Earnings Growth
The combination of FLS and GTLS is expected to result in significant cost and revenue synergies, enhancing the company's financial performance.
Order Backlog
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.
Negative Factors
Integration Concerns
There is some investor concern over potential distractions arising from the FLS/GTLS integration.
Operational Complexity
The key will be investor confidence in operational execution as a larger, more complex business.

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

Flowserve Business Overview & Revenue Model

Company DescriptionFlowserve Corporation (FLS) is a leading provider of flow control products and services for various industries, including oil and gas, power generation, water management, and chemical processing. The company specializes in the manufacturing of pumps, valves, seals, and other related products that are essential for the safe and efficient movement of fluids. Flowserve operates globally, delivering innovative solutions that enhance operational efficiency and sustainability for its customers.
How the Company Makes MoneyFlowserve generates revenue primarily through the sale of its core products, which include pumps, valves, and seals. The company earns money through two main segments: the Engineered Product Division, which focuses on custom-engineered solutions for complex applications, and the Aftermarket Services Division, which provides maintenance, repair, and replacement services for its products. Key revenue streams include direct sales to end-users, long-term service contracts, and aftermarket services that enhance product lifecycle management. Additionally, Flowserve benefits from strategic partnerships with major companies in various industries, allowing it to expand its market reach and enhance its service offerings.

Flowserve Earnings Call Summary

Earnings Call Date:Jul 29, 2025
(Q2-2025)
|
% Change Since: |
Next Earnings Date:Oct 22, 2025
Earnings Call Sentiment Neutral
Flowserve reported strong financial results and increased guidance, driven by excellent execution and success in the aftermarket business. However, the termination of the Chart merger, challenges with Mogas, and project booking delays present significant concerns.
Q2-2025 Updates
Positive Updates
Significant EPS Guidance Increase
Flowserve increased its full year adjusted EPS guidance to $3.25 to $3.40, representing an increase of more than 25% year-over-year.
Strong Financial Performance
Second quarter bookings of approximately $1.1 billion, revenue growth of 3%, and adjusted gross margins expanding 260 basis points to 34.9%.
Aftermarket Business Success
Fifth consecutive quarter of aftermarket bookings above $600 million, with a notable $11 million nuclear aftermarket order.
Nuclear Market Opportunities
Secured the first production order related to a small modular nuclear reactor. Total nuclear bookings were nearly $60 million.
Operational Excellence
Implemented the 80/20 framework across all products, driving significant margin improvements.
Balance Sheet Strength
Received a $266 million termination payment from the terminated merger with Chart Industries, enhancing the balance sheet.
Strong Cash Flow
Delivered strong cash from operations of $154 million, with a free cash conversion ratio of 115%.
Negative Updates
Merger Termination
Termination of the proposed merger with Chart Industries, which was expected to be transformational.
Challenges with Mogas Acquisition
Mogas unfavorably impacted FCD adjusted operating margins by 260 basis points, largely due to fabricated modules business and inventory write-offs.
Project Booking Delays
Delays in project bookings, particularly in energy and chemical sectors, due to macroeconomic uncertainty and tariffs.
FCD Margin Challenges
FCD margins are not meeting expectations, with ongoing pressure from the integration of Mogas.
Company Guidance
During Flowserve's Second Quarter 2025 Earnings Call, the company highlighted its robust performance in a challenging macroeconomic environment, resulting in an increase in full-year adjusted EPS guidance to $3.25-$3.40, reflecting a more than 25% year-over-year increase at the midpoint. Flowserve reported second-quarter bookings of approximately $1.1 billion, with revenue growth of 3% and an expansion in adjusted gross margins by 260 basis points to 34.9%. The company's adjusted operating margins stood at 14.6%, with impressive incremental margins of 94%. Notably, aftermarket bookings surpassed $600 million for the fifth consecutive quarter, with total nuclear bookings reaching nearly $60 million. Flowserve's backlog stood strong at $2.9 billion, supporting future growth. The company also received a $266 million termination payment related to a merger agreement with Chart Industries, which it plans to strategically utilize for shareholder value creation, including potential share repurchases.

Flowserve Financial Statement Overview

Summary
Flowserve demonstrates strong financial performance with notable revenue growth, stable profit margins, and efficient cash flow generation. The balance sheet is robust with effective debt management, though asset utilization could be improved.
Income Statement
85
Very Positive
Flowserve demonstrates strong revenue growth with a 7.5% increase from 2023 to TTM (Trailing-Twelve-Months). Gross and net profit margins are stable at 32.5% and 6.3% respectively in TTM, indicating effective cost management and profitability. EBIT and EBITDA margins are also healthy, reflecting strong operational efficiency. Overall, the company shows robust financial performance with consistent improvement in profitability metrics.
Balance Sheet
75
Positive
The balance sheet reflects a solid equity position with an equity ratio of 39.1% in TTM, although there is a notable reduction in debt levels, resulting in a low debt-to-equity ratio of 0.10. Return on Equity (ROE) stands at a reasonable 13.1%, highlighting satisfactory returns to shareholders. The company's financial stability is reinforced by efficient debt management and a strong equity base, though improvements in asset utilization could enhance returns.
Cash Flow
78
Positive
Flowserve's cash flow metrics are commendable, with a strong free cash flow growth rate of 15.9% in TTM, demonstrating robust cash generation capabilities. The operating cash flow to net income ratio of 1.65 and a free cash flow to net income ratio of 1.37 indicate efficient cash conversion. Despite substantial capital expenditures, the company maintains a healthy cash flow position, supporting ongoing investments and shareholder returns.
BreakdownTTMDec 2024Dec 2023Dec 2022Dec 2021Dec 2020
Income Statement
Total Revenue4.65B4.56B4.32B3.62B3.54B3.73B
Gross Profit1.52B1.47B1.30B994.29M1.07B1.12B
EBITDA548.05M541.05M374.42M291.58M385.19M351.06M
Net Income291.58M282.76M186.74M188.69M125.95M130.42M
Balance Sheet
Total Assets5.68B5.50B5.11B4.79B4.75B5.31B
Cash, Cash Equivalents and Short-Term Investments629.20M675.44M545.68M434.97M658.45M1.10B
Total Debt227.15M1.69B1.40B1.46B1.50B1.94B
Total Liabilities3.40B3.45B3.13B2.93B2.91B3.55B
Stockholders Equity2.22B2.01B1.94B1.82B1.80B1.73B
Cash Flow
Free Cash Flow398.98M344.29M258.41M-116.30M195.18M253.13M
Operating Cash Flow480.05M425.31M325.77M-40.01M250.12M310.54M
Investing Cash Flow-384.60M-387.21M-68.58M-6.09M-59.48M-41.70M
Financing Cash Flow-266.00K117.50M-153.01M-150.01M-599.71M147.59M

Flowserve Technical Analysis

Technical Analysis Sentiment
Positive
Last Price54.55
Price Trends
50DMA
53.58
Positive
100DMA
50.31
Positive
200DMA
53.27
Positive
Market Momentum
MACD
0.23
Negative
RSI
56.18
Neutral
STOCH
62.38
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLS, the sentiment is Positive. The current price of 54.55 is above the 20-day moving average (MA) of 53.27, above the 50-day MA of 53.58, and above the 200-day MA of 53.27, indicating a bullish trend. The MACD of 0.23 indicates Negative momentum. The RSI at 56.18 is Neutral, neither overbought nor oversold. The STOCH value of 62.38 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
79
Outperform
$13.41B26.4920.17%0.80%6.69%21.44%
78
Outperform
$8.73B41.7115.02%8.90%29.18%
76
Outperform
$18.04B29.1817.15%0.89%-0.25%-7.32%
74
Outperform
$7.00B24.2713.91%1.54%3.15%14.18%
74
Outperform
$24.10B10.6016.72%1.16%-8.23%54.92%
64
Neutral
$10.73B15.657.61%2.01%2.80%-14.92%
62
Neutral
$9.70B38.863.84%0.96%-7.88%
* Industrials Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
FLS
Flowserve
54.55
9.75
21.76%
DOV
Dover
178.36
4.88
2.81%
ITT
ITT
170.88
42.98
33.60%
PNR
Pentair
110.64
26.38
31.31%
RRX
Regal Rexnord
145.56
-2.00
-1.36%
SPXC
SPX
187.81
46.96
33.34%

Flowserve Corporate Events

M&A TransactionsBusiness Operations and Strategy
Flowserve Receives $266M After Merger Termination
Positive
Jul 29, 2025

On July 28, 2025, Flowserve Corporation announced the termination of its merger agreement with Chart Industries, following Chart’s acceptance of a superior proposal from Baker Hughes. As a result, Flowserve will receive a $266 million termination payment from Chart. The termination reflects Flowserve’s commitment to financial discipline and confidence in its standalone growth prospects, driven by its 3D growth strategy and robust demand for its flow control solutions.

M&A TransactionsBusiness Operations and StrategyFinancial Disclosures
Flowserve Announces Strong Q2 2025 Financial Results
Positive
Jul 29, 2025

On July 29, 2025, Flowserve Corporation announced its strong financial results for the second quarter of 2025, showcasing solid bookings, improved margins, and increased earnings per share. The company highlighted the successful execution of its 3D Growth Strategy and the Flowserve Business System, which contributed to enhanced earnings and operational performance. Flowserve also updated its full-year 2025 earnings guidance, reflecting confidence in its business model and strategic initiatives. Additionally, Flowserve terminated its merger agreement with Chart Industries, Inc., opting to receive a $266 million termination payment after Chart accepted a superior proposal from Baker Hughes.

M&A TransactionsBusiness Operations and Strategy
Flowserve Announces Merger Agreement with Chart Industries
Positive
Jun 4, 2025

On June 3, 2025, Flowserve Corporation and Chart Industries announced a merger agreement to combine in an all-stock merger of equals, creating a leader in industrial process technologies. The merger, expected to close in the fourth quarter of 2025, aims to enhance the combined company’s market position with a global platform serving diverse high-growth markets. The merger is anticipated to generate significant cost synergies and be accretive to adjusted EPS in the first year, benefiting shareholders and stakeholders with a robust financial profile and expanded service capabilities.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

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.Date of analysis: Aug 23, 2025