Zurn Water Solutions (ZWS) AI Stock Analysis

• Market Cap: $7.41B
• Dividend Yield: 0.79%
• Average Volume (3M): 1.00M
• Price to Earnings (P/E): 43.7
• Beta (1Y): 1.17
• Revenue Growth: 4.74%
• EPS Growth: 30.64%
• Country: US
• Employees: 2,500
• Sector: Industrials
• Sector Strength: 88
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.42
• Shares Outstanding: 167,552,520
• 10 Day Avg. Volume: 1,507,833
• 30 Day Avg. Volume: 1,004,479
• PEG Ratio: 6.76
• Price to Book (P/B): 4.73
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 27.78
• Enterprise Value/Market Cap: 1.03
• Enterprise Value/Revenue: 1.21
• Enterprise Value/Gross Profit: 10.41
• Enterprise Value/Ebitda: 5.83
• 1Y Price Target: $46.75
• Price Target Upside: 3.94% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 70 Outperform
• Price Target: $49.00 ▲(8.94%Upside)

Zurn Water Solutions has a solid financial foundation and positive earnings outlook, driven by strong growth and improved guidance. However, high valuation metrics and technical indicators suggesting potential overbought conditions weigh on the overall score.

Positive Factors

Earnings

ZWS reported 1Q25 adjusted EPS of $0.31, above the estimate and consensus of $0.29, driven by both sales and margin upside.

Share Repurchase

ZWS accelerated share repurchases in 1Q (~$77M; ~2.3M shares) ahead of expectations.

Negative Factors

Supply Chain Concerns

Concerns exist around ZWS's supply chain exposure to China and other regions, which could impact the company's performance.

Tariff Exposure

Investors have been concerned that tariff exposure will weigh on margins with 25% of Zurn's direct material spend coming from China, which will be subject to 145% tariffs.

Zurn Water Solutions Business Overview & Revenue Model

Company Description

Zurn Water Solutions (ZWS) is a leading provider of water management solutions, focusing on the design, production, and distribution of advanced water control and conservation products. Operating in the construction and industrial sectors, Zurn's core offerings include plumbing products, water safety solutions, drainage systems, and hygienic products, all designed to promote sustainability and efficient water usage.

How the Company Makes Money

Zurn Water Solutions generates revenue primarily through the sale of its comprehensive range of water management products. The company's key revenue streams are derived from its plumbing and drainage solutions, which are widely used in commercial, residential, and industrial buildings. Zurn also benefits from strategic partnerships with construction firms and distributors, enhancing its market reach and product accessibility. Additionally, Zurn's focus on sustainability and innovation allows it to tap into growing market demands for eco-friendly and efficient water management solutions, further contributing to its earnings.

Zurn Water Solutions Financial Statement Overview

Summary

Zurn Water Solutions shows strong financial performance with significant revenue growth and robust profitability margins. The balance sheet reflects moderate leverage and efficient equity utilization, although there are concerns regarding equity growth. Cash flow management is stable, supporting operational and strategic objectives.

Income Statement

Zurn Water Solutions has demonstrated strong revenue growth with a 23.4% increase in total revenue from 2024 to 2025 TTM. The company's gross profit margin stands at 44.5% TTM, indicating efficient cost management. Net profit margin has improved to 10.7% TTM, with EBIT and EBITDA margins at 16.2% and 21.7% TTM respectively, showcasing solid profitability. However, slight fluctuations in gross profit suggest room for improvement in operational efficiency.

Balance Sheet

The company maintains a healthy balance sheet with a debt-to-equity ratio of 0.36, indicating moderate leverage. The return on equity (ROE) is strong at 11% TTM, reflecting effective use of shareholder equity to generate profits. An equity ratio of 59.3% TTM suggests a stable financial structure. However, a decrease in stockholders' equity over the past year signals potential challenges in equity growth.

Cash Flow

Zurn Water Solutions shows robust cash flow management with a free cash flow growth rate of -4.3% TTM, indicating stable cash generation capabilities. The operating cash flow to net income ratio is 1.67 TTM, demonstrating efficient conversion of income to cash. Furthermore, the free cash flow to net income ratio of 1.53 TTM underscores strong cash flow adequacy. Despite a slight decrease in free cash flow, the company's cash flow remains resilient.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.61B	1.57B	1.53B	1.28B	910.90M	562.70M
Gross Profit	733.90M	707.00M	648.10M	465.50M	373.20M	253.30M
EBITDA	333.30M	328.40M	273.20M	165.20M	164.60M	145.80M
Net Income	174.00M	160.20M	112.70M	61.70M	120.90M	118.20M
Balance Sheet
Total Assets	2.65B	2.65B	2.67B	2.86B	1.08B	3.40B
Cash, Cash Equivalents and Short-Term Investments	201.90M	198.00M	136.70M	124.80M	96.60M	62.30M
Total Debt	496.90M	551.60M	543.20M	570.10M	539.50M	0.00
Total Liabilities	1.09B	1.06B	1.06B	1.25B	951.30M	1.96B
Stockholders Equity	1.56B	1.59B	1.60B	1.61B	126.40M	1.44B
Cash Flow
Free Cash Flow	320.10M	271.70M	232.60M	89.40M	200.30M	168.00M
Operating Cash Flow	350.90M	293.50M	253.90M	97.00M	223.60M	196.30M
Investing Cash Flow	-30.80M	-20.20M	-4.60M	-6.60M	-21.90M	-122.50M
Financing Cash Flow	-334.10M	-207.50M	-239.20M	-61.10M	-356.20M	-409.60M

Zurn Water Solutions Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 44.98
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ZWS, the sentiment is Positive. The current price of 44.98 is above the 20-day moving average (MA) of 38.49, above the 50-day MA of 37.15, and above the 200-day MA of 36.34, indicating a bullish trend. The MACD of 1.58 indicates Negative momentum. The RSI at 83.60 is Negative, neither overbought nor oversold. The STOCH value of 94.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ZWS.

Zurn Water Solutions Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
FSS	78 Outperform	$7.45B	34.09	18.77%	0.41%	9.09%	9.64%
ATMU	76 Outperform	$3.10B	16.94	95.48%	0.53%	1.43%	12.88%
CECO	74 Outperform	$1.59B	31.40	19.67%	―	15.74%	294.80%
ERII	72 Outperform	$697.05M	35.10	10.35%	―	10.93%	6.99%
ZWS	70 Outperform	$7.41B	43.72	10.81%	0.79%	4.74%	30.64%
Sector *	64 Neutral	$10.64B	16.52	6.24%	2.15%	3.01%	-28.89%
PCT	38 Underperform	$2.41B	―	-67.71%	―	―	-180.10%

Zurn Water Solutions Corporate Events

Zurn Water Solutions Holds Annual Stockholders Meeting

On May 1, 2025, Zurn Elkay Water Solutions Corporation held its Annual Meeting of Stockholders, where several key decisions were made. Stockholders approved an amendment to the Performance Incentive Plan, increasing the shares available for issuance by 2,500,000, elected four directors for terms expiring in 2028, and ratified Ernst & Young LLP as the independent auditor for fiscal year 2025. These decisions are expected to strengthen the company’s governance and financial oversight, potentially impacting its market positioning and stakeholder confidence.