Zurn Water Solutions Corporation (ZWS)
NYSE:ZWS
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Zurn Water Solutions
(NYSE:ZWS)
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Rating:75Outperform
Price Target:
$51.00
▲(10.37% Upside)
Action:ReiteratedDate:02/22/26
The score is driven primarily by strong fundamentals—especially robust free cash flow and improved profitability—supported by constructive price momentum and upbeat, specific 2026 guidance. The main offset is valuation (high P/E with a low yield), which raises execution risk if growth or margins disappoint.
Positive Factors
Strong free cash flow generation
Consistent, high-quality cash generation (OCF ~$347M, FCF ~$317M in 2025) underpins durable financial flexibility. Close FCF-to-net-income conversion and multi-year coverage indicate earnings are well-supported by cash, enabling buybacks, dividends, debt paydown, and reinvestment without relying on volatile market funding.
Negative Factors
Slowing revenue growth and conversion risk
Revenue growth has decelerated to low-single digits, increasing reliance on margin improvements and cost programs to drive earnings. Given ties to construction and retrofit cycles plus weak project conversion, revenue upside is constrained and durable topline acceleration may require sustained market improvement or successful adjacency expansion.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong free cash flow generation
Consistent, high-quality cash generation (OCF ~$347M, FCF ~$317M in 2025) underpins durable financial flexibility. Close FCF-to-net-income conversion and multi-year coverage indicate earnings are well-supported by cash, enabling buybacks, dividends, debt paydown, and reinvestment without relying on volatile market funding.
Read all positive factors
Zurn Water Solutions (ZWS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$7.71B
Dividend Yield0.8%
Average Volume (3M)871.35K
Price to Earnings (P/E)39.6
Beta (1Y)0.94
Revenue Growth6.88%
EPS Growth42.07%
CountryUS
Employees2,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)0.36
Shares Outstanding166,797,970
10 Day Avg. Volume1,163,948
30 Day Avg. Volume871,351
Financial Highlights & Ratios
PEG Ratio1.75
Price to Book (P/B)4.89
Price to Sales (P/S)4.62
P/FCF Ratio24.77
Enterprise Value/Market Cap1.01
Enterprise Value/Revenue4.60
Enterprise Value/Gross Profit10.61
Enterprise Value/Ebitda20.88
Forecast
1Y Price Target
$55.40Price Target Upside19.89% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
EPS Forecast (FY)1.66
Revenue Forecast (FY)$1.79B
Zurn Water Solutions Business Overview & Revenue Model
Company Description
Zurn Elkay Water Solutions Corporation designs, procures, manufactures, and markets water system solutions that provide and enhance water quality, safety, flow control, and conservation in and around non-residential buildings. It offers finish plu...
How the Company Makes Money
Zurn Water Solutions primarily makes money by selling engineered water-management and plumbing products into non-residential building and facility markets, earning revenue when its products are specified into building designs and then purchased th...
Zurn Water Solutions Earnings Call Summary
Earnings Call Date:Feb 03, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 28, 2026
Earnings Call Sentiment Positive
The call highlighted strong operational and financial performance: double-digit organic Q4 sales growth, meaningful margin expansion, robust free cash flow (+17% YoY), very low leverage (0.4x), active share repurchases, and notable sustainability/product innovations. Management provided a confident but measured 2026 framework (mid-single-digit sales growth, ~35% incremental EBITDA margins, ~$335M FCF) while acknowledging risks including residential/commercial softness, tariff/commodity uncertainty, remaining China sourcing transition work, and that M&A opportunities have not yet been closed. On balance, the positive execution, cash generation, low leverage and clear strategic initiatives significantly outweigh the contained risks discussed.Positive Updates
Quarterly Sales Growth
Q4 sales of $407 million, representing 10% core and reported year-over-year growth; full-year core sales growth of 8% for 2025.
Negative Updates
Softness in Residential and Parts of Commercial End Markets
Management noted continued softness in residential end market and pockets of the commercial segment during Q4; guidance assumes residential remains tougher in 2026.
Read all updates
Q4-2025 Updates
Positive
Negative
Quarterly Sales Growth
Q4 sales of $407 million, representing 10% core and reported year-over-year growth; full-year core sales growth of 8% for 2025.
Read all positive updates
Company Guidance
The company guided 2026 to core sales growth of mid‑single digits (with Q1 specifically forecasting 7%–8%), incremental adjusted EBITDA margins of approximately 35% on that incremental sales, and roughly $335 million of free cash flow for the year; management expects Q1 EBITDA margin of about 25.5%–26% (≈60 bps expansion vs. prior year at the midpoint). The framework assumes institutional and waterworks grow low single digits, commercial is flattish, residential remains tougher (overall market flat to slightly positive), higher price impact in H1 as prior tariff‑related pricing lapses in H2, tariff countries/rates holding steady, about a five‑point price benefit carried from Q4, and continued reduction of China direct COGS to only a few points by year‑end.Zurn Water Solutions Financial Statement Overview
Summary
Income Statement
78
Positive
Balance Sheet
74
Positive
Cash Flow
85
Very Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.70B | 1.57B | 1.53B | 1.28B | 910.90M |
| Gross Profit | 706.10M | 707.00M | 648.10M | 465.50M | 373.20M |
| EBITDA | 373.60M | 328.40M | 273.20M | 165.20M | 164.60M |
| Net Income | 198.00M | 160.20M | 112.70M | 61.70M | 120.90M |
Balance Sheet | |||||
| Total Assets | 2.68B | 2.65B | 2.67B | 2.86B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 300.50M | 198.00M | 136.70M | 124.80M | 96.60M |
| Total Debt | 580.50M | 551.60M | 543.20M | 579.50M | 554.50M |
| Total Liabilities | 1.08B | 1.06B | 1.06B | 1.25B | 951.30M |
| Stockholders Equity | 1.60B | 1.59B | 1.60B | 1.61B | 126.40M |
Cash Flow | |||||
| Free Cash Flow | 316.60M | 271.70M | 232.60M | 89.40M | 200.30M |
| Operating Cash Flow | 346.50M | 293.50M | 253.90M | 97.00M | 223.60M |
| Investing Cash Flow | -29.90M | -20.20M | -4.60M | -6.60M | -21.90M |
| Financing Cash Flow | -217.30M | -207.50M | -239.20M | -61.10M | -356.20M |
Zurn Water Solutions Technical Analysis
Neutral
46.21
Price Trends
48.20
Negative
47.53
Negative
45.06
Positive
Market Momentum
-1.16
Positive
44.01
Neutral
67.83
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZWS, the sentiment is Neutral. The current price of 46.21 is below the 20-day moving average (MA) of 47.10, below the 50-day MA of 48.20, and above the 200-day MA of 45.06, indicating a neutral trend. The MACD of -1.16 indicates Positive momentum. The RSI at 44.01 is Neutral, neither overbought nor oversold. The STOCH value of 67.83 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for ZWS.
Zurn Water Solutions Risk Analysis
Zurn Water Solutions disclosed 26 risk factors in its most recent earnings report. Zurn Water Solutions 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
Zurn Water Solutions Peers Comparison
UnderperformOutperform
Sector (63)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
75 Outperform | $7.71B | 39.60 | 12.56% | 0.80% | 6.88% | 42.07% | |
74 Outperform | $6.78B | 27.15 | 19.09% | 0.49% | 11.83% | 11.08% | |
67 Neutral | $2.04B | 42.25 | 16.53% | ― | 29.86% | 331.33% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $4.93B | 20.57 | 63.97% | 0.39% | 3.72% | 11.71% | |
62 Neutral | $535.68M | 31.61 | 11.92% | ― | 0.10% | 1.50% | |
48 Neutral | $1.01B | -8.44 | -161.85% | ― | ― | 12.57% |
* Industrials Sector Average
ZWS
Zurn Water Solutions
44.81
11.35
33.93%
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148.74%
ERII
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PCT
PureCycle Technologies
5.47
-1.91
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ATMU
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56.03%
Zurn Water Solutions Corporate Events
Business Operations and StrategyPrivate Placements and Financing
Zurn Water Solutions Expands Revolving Credit Facility for Growth
Positive
Feb 20, 2026
On February 19, 2026, Zurn Elkay Water Solutions’ subsidiaries entered into a third amendment to their Fourth Amended and Restated First Lien Credit Agreement, refinancing existing revolving borrowings and significantly expanding their revol...
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.