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Xylem Inc (XYL)
:XYL
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Xylem
(NYSE:XYL)
Select Model
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Rating:79Outperform
Price Target:
$172.00
▲(14.29% Upside)
Xylem's strong financial performance and positive earnings call sentiment are the most significant factors driving the score. Technical analysis supports a bullish outlook, though caution is advised due to overbought signals. Valuation concerns slightly temper the overall score, but the company's strategic initiatives and raised guidance provide confidence in future growth.
Positive Factors
Revenue Growth
Consistent revenue growth across key segments indicates strong market demand and effective execution of business strategy, supporting long-term expansion.
Partnership with Amazon
The strategic partnership with Amazon enhances Xylem's technological capabilities and market reach, reinforcing its position in sustainable water management solutions.
Margin Expansion
Sustained margin expansion through operational efficiencies boosts profitability, providing a solid foundation for future growth and investment.
Negative Factors
Decline in Free Cash Flow
A decline in free cash flow can limit financial flexibility, affecting the company's ability to invest in growth opportunities and manage debt.
Challenges in China
Ongoing challenges in China could hinder growth in a key market, affecting overall revenue and strategic expansion efforts in the region.
Impact of Tariffs
Tariff impacts can increase costs and pressure margins, potentially affecting competitiveness and profitability in affected markets.
Xylem (XYL) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$36.09B
Dividend Yield1.04%
Average Volume (3M)1.16M
Price to Earnings (P/E)38.5
Beta (1Y)1.10
Revenue Growth5.59%
EPS Growth13.76%
CountryUS
Employees23,000
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.37
Shares Outstanding243,409,680
10 Day Avg. Volume1,048,301
30 Day Avg. Volume1,160,794
Financial Highlights & Ratios
PEG Ratio1.03
Price to Book (P/B)2.64
Price to Sales (P/S)3.29
P/FCF Ratio29.88
Enterprise Value/Market Cap0.00
Enterprise Value/Revenue0.00
Enterprise Value/Gross Profit0.00
Enterprise Value/Ebitda0.00
Forecast
1Y Price Target
$162.30Price Target Upside7.84% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering12
Xylem Business Overview & Revenue Model
Company DescriptionXylem Inc. (NYSE: XYL) is a leading global water technology company dedicated to solving the world's water challenges. The company operates in the water and wastewater sectors, providing innovative solutions for water transport, treatment, and testing. Xylem's core products and services include pumps, valves, filtration systems, and monitoring equipment, as well as comprehensive services for water management and infrastructure. With a focus on sustainability and efficiency, Xylem aims to improve water quality and accessibility worldwide.
How the Company Makes MoneyXylem generates revenue through a diverse range of products and services within the water technology sector. Its primary revenue streams include the sale of equipment such as pumps and treatment systems, which account for a significant portion of its income. Additionally, Xylem offers services related to the installation, maintenance, and optimization of water systems, contributing further to its revenue. The company also benefits from partnerships with municipalities, industrial clients, and other organizations that require reliable water management solutions. Government investments in water infrastructure and sustainability initiatives further enhance Xylem's earnings potential, as they align with the company's mission to address global water issues.
Xylem Key Performance Indicators (KPIs)
Xylem Earnings Call Summary
Earnings Call Date:Oct 28, 2025
(Q3-2025)
| % Change Since: |
Next Earnings Date:Feb 10, 2026
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue and margin growth across most segments with significant achievements in Measurement and Control Solutions and Water Infrastructure. However, challenges were noted in order declines and softness in the China market. The overall sentiment reflects a strong performance with optimism for future growth despite some uncertainties.Q3-2025 Updates
Positive Updates
Strong Revenue and Margin Growth
Revenue grew across all segments with double-digit growth in Measurement and Control Solutions (MCS) and Water Solutions and Services (WSS). Record quarterly EBITDA margin exceeded 23%, expanding 200 basis points year-over-year, and EPS grew by 23%.
Measurement and Control Solutions Performance
MCS orders grew 11% organically with strength across water and energy metering. Backlog remains healthy at $1.5 billion, and EBITDA margin was up 60 basis points year-over-year.
Water Infrastructure Segment Success
Revenue grew 5%, driven by strong demand in transport and treatment with double-digit growth in the U.S. EBITDA margin expanded 400 basis points to 24.4%.
Raised Full Year Guidance
Full year revenue guidance raised to roughly $9 billion, representing 5% to 6% total growth. EBITDA margin expected to expand 140 to 170 basis points versus prior year.
Divestiture of International Metering Business
Sale of international metering business for $125 million expected to close in early 2026, driving a 100 basis point margin improvement in the MCS segment.
Positive Partnership with Amazon
Deployment of Xylem's Vue advanced analytics in Mexico City and Monterrey with Amazon, saving more than 1 billion liters of water annually.
Negative Updates
Decline in Orders
Orders were down 2% in the quarter, with softness in China mostly offset by growth in the U.S. and Western Europe.
Challenges in China
Significant softness in China impacted Water Infrastructure and Applied Water segments, leading to a double-digit decline in sales and orders.
Impact of Tariffs
Updated annualized tariff impact is roughly $180 million, with potential for slight margin dilutive effect.
Company Guidance
During Xylem's Third Quarter 2025 Earnings Call, the company provided updated guidance for the remainder of the year. Revenue is projected to reach approximately $9 billion, indicating a 5% to 6% total growth and 4% to 5% organic growth. The EBITDA margin is expected to expand to between 22% and 22.3%, reflecting an improvement of 140 to 170 basis points compared to the previous year. The EPS guidance has been raised to a range of $5.03 to $5.08, up from the prior guidance of $4.70 to $4.85. For the fourth quarter, Xylem anticipates revenue of about $2.4 billion with organic growth of 2% to 3%, an EBITDA margin of approximately 23%, and EPS between $1.37 and $1.42. The company continues to focus on portfolio optimization and disciplined capital deployment, highlighted by the divestiture of its international metering business. Xylem remains confident in its ability to deliver on these commitments, despite ongoing macroeconomic uncertainties.Xylem Financial Statement Overview
Summary
Xylem demonstrates strong financial health with consistent revenue growth and solid profitability margins. The balance sheet is stable with low leverage, enhancing its risk profile. However, the decline in free cash flow is a concern that needs to be addressed to ensure continued financial flexibility.Income Statement
Xylem has demonstrated strong revenue growth with a TTM increase of 1.54% and consistent annual growth over the past years. The company maintains healthy profitability margins, with a TTM gross profit margin of 37.48% and a net profit margin of 14.59%. EBIT and EBITDA margins are also robust, indicating efficient operations. The upward trajectory in revenue and profitability suggests a positive outlook.85
Very Positive
Balance Sheet
The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.18 in the TTM period, indicating low leverage. The return on equity is reasonable at 8.70%, showing effective use of equity to generate profits. The equity ratio stands at a healthy level, suggesting financial stability. However, the decrease in total debt over time enhances the company's risk profile.78
Positive
Cash Flow
Xylem's cash flow performance shows mixed results. The TTM free cash flow growth rate is negative at -0.9%, indicating a decline in free cash flow. However, the operating cash flow to net income ratio is 0.53, and the free cash flow to net income ratio is 0.72, suggesting adequate cash generation relative to net income. The company needs to address the decline in free cash flow to maintain financial flexibility.82
Very Positive
| Breakdown | TTM | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 8.89B | 8.56B | 7.36B | 5.52B | 5.20B | 4.88B |
| Gross Profit | 3.40B | 3.21B | 2.72B | 2.08B | 1.98B | 1.83B |
| EBITDA | 1.79B | 1.69B | 1.12B | 726.00M | 832.00M | 613.00M |
| Net Income | 948.00M | 890.00M | 609.00M | 355.00M | 427.00M | 254.00M |
Balance Sheet | ||||||
| Total Assets | 17.30B | 16.49B | 16.11B | 7.95B | 8.28B | 8.75B |
| Cash, Cash Equivalents and Short-Term Investments | 1.19B | 1.12B | 1.02B | 944.00M | 1.35B | 1.88B |
| Total Debt | 1.96B | 2.13B | 2.39B | 1.95B | 2.51B | 3.15B |
| Total Liabilities | 5.85B | 5.62B | 5.94B | 4.45B | 5.05B | 5.77B |
| Stockholders Equity | 11.21B | 10.64B | 10.17B | 3.49B | 3.22B | 2.97B |
Cash Flow | ||||||
| Free Cash Flow | 925.00M | 942.00M | 566.00M | 388.00M | 330.00M | 641.00M |
| Operating Cash Flow | 1.27B | 1.26B | 837.00M | 596.00M | 538.00M | 824.00M |
| Investing Cash Flow | -618.00M | -482.00M | -628.00M | -191.00M | -183.00M | -169.00M |
| Financing Cash Flow | -477.00M | -615.00M | -157.00M | -790.00M | -855.00M | 473.00M |
Xylem Technical Analysis
Positive
150.50
Price Trends
144.08
Positive
138.36
Positive
129.87
Positive
Market Momentum
1.36
Negative
65.33
Neutral
81.85
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For XYL, the sentiment is Positive. The current price of 150.5 is above the 20-day moving average (MA) of 147.45, above the 50-day MA of 144.08, and above the 200-day MA of 129.87, indicating a bullish trend. The MACD of 1.36 indicates Negative momentum. The RSI at 65.33 is Neutral, neither overbought nor oversold. The STOCH value of 81.85 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for XYL.
Xylem Risk Analysis
Xylem disclosed 26 risk factors in its most recent earnings report. Xylem 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
Xylem Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
| ― | $36.09B | 38.53 | 8.70% | 1.04% | 5.59% | 13.76% | |
| ― | $17.96B | 27.84 | 17.97% | 0.92% | 0.83% | -1.32% | |
| ― | $662.94M | 48.20 | 11.97% | ― | 14.64% | 182.19% | |
| ― | $9.19B | 29.63 | 17.75% | 0.69% | 2.96% | 12.62% | |
| ― | $4.05B | 27.37 | 17.33% | 1.03% | 10.19% | 20.71% | |
| ― | $6.98B | 24.21 | 13.91% | 1.60% | 3.15% | 14.18% | |
| ― | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% |
* Industrials Sector Average
XYL
Xylem
150.50
22.14
17.25%
FLS
Flowserve
52.66
-0.63
-1.18%
GHM
Graham
60.40
31.62
109.87%
MWA
Mueller Water Products
25.87
4.28
19.82%
PNR
Pentair
108.87
10.77
10.98%
WTS
Watts Water Technologies
275.48
79.30
40.42%
Xylem Corporate Events
Xylem Inc. Reports Strong Q2 2025 Results
Aug 1, 2025
Xylem Inc., a Fortune 500 company, is a global leader in water solutions, focusing on optimizing water and resource management through innovation and expertise. In its latest earnings report, Xylem Inc. announced a strong second quarter for 2025, with revenue reaching $2.3 billion, marking a 6% increase both on a reported and organic basis. The company also reported a 16% rise in earnings per share, reflecting robust demand and effective execution across its segments.
Xylem Inc’s Earnings Call: Strong Growth Amid Challenges
Aug 1, 2025
Xylem Inc’s recent earnings call presented a balanced sentiment, highlighting both strong performance across key segments and certain challenges. The company reported impressive growth and raised its full-year guidance, yet acknowledged economic issues in China, order delays, and tariff impacts that could pose challenges ahead.
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.