Zurn Water Solutions (ZWS) AI Stock Analysis

• Market Cap: $7.44B
• Dividend Yield: 0.78%
• Average Volume (3M): 1.25M
• Price to Earnings (P/E): 43.9
• Beta (1Y): 1.04
• Revenue Growth: 4.74%
• EPS Growth: 30.64%
• Country: US
• Employees: 2,500
• Sector: Industrials
• Sector Strength: 80
• Industry: Industrial - Pollution & Treatment Controls
• EPS (TTM): 0.42
• Shares Outstanding: 167,552,520
• 10 Day Avg. Volume: 910,721
• 30 Day Avg. Volume: 1,247,727
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 0.88
• Enterprise Value/Revenue: 4.07
• Enterprise Value/Gross Profit: 8.96
• Enterprise Value/Ebitda: 18.96
• 1Y Price Target: $46.75
• Price Target Upside: 1.26% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 5

• Rating: 70 Outperform
• Price Target: $49.00 ▲(6.13% 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 adjusted EPS of $0.31, above the estimate and consensus of $0.29, driven by both sales and margin upside.

Management Quality

There is an opportunity for investors to add a high-quality company with high-quality management and a proven record for supply chain management and pricing power.

Share Repurchases

ZWS accelerated share repurchases, buying back approximately $77M worth of shares, ahead of expectations.

Negative Factors

Supply Chain Exposure

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.

Uncertainty in Global Trading

Uncertainty is the enemy of investment, and the global trading rules remain very uncertain.

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 plumbing, drainage and interceptors, water control and backflow, fire protection, PEX pipe fittings and accessories, and repair parts under the Zurn brand name; and hand and hair dryers, and baby changing stations under the World Dryer brand name. The company also offers stainless steel products under the Just Manufacturing brand name, which include stainless steel sinks for classrooms and academic institutions; ADA commercial stainless-steel sinks and plumbing fixtures for assisted living; faucets, bubblers, drains, and accessories; and stainless steel fixtures and related products for food services, government, healthcare, hospitality, institutional, and residential markets. It serves higher education, healthcare, retail, restaurant, hospitality, education, government, and fire protection markets. The company was formerly known as Zurn Water Solutions Corporation. Zurn Elkay Water Solutions Corporation was incorporated in 2006 and is headquartered in Milwaukee, Wisconsin.

How the Company Makes Money

Zurn Water Solutions generates revenue through multiple key streams. The primary source of income comes from the sale of its extensive product line, which includes plumbing fixtures, drainage products, and water treatment systems. Additionally, ZWS earns revenue from providing maintenance services, consulting, and installation for its products. The company has established significant partnerships with construction firms, property developers, and government agencies, which helps to secure large contracts and create a stable client base. Furthermore, ZWS focuses on innovation and sustainability, which attracts customers looking for eco-friendly solutions, thereby enhancing market competitiveness and driving sales growth.

Zurn Water Solutions Financial Statement Overview

Summary

Zurn Water Solutions displays robust financial health, with strong revenue growth, solid profitability, and effective cash management. The company's income statement, balance sheet, and cash flow scores highlight its stable position, although there is room for improvement in reducing leverage.

Income Statement

Zurn Water Solutions demonstrates strong income statement metrics with consistent revenue growth and improving profitability. The gross profit margin for TTM is a healthy 45.46%, and the net profit margin is at 10.78%. The company shows robust top-line growth, with a TTM revenue growth rate of 3.03%. The EBIT and EBITDA margins are also solid, at 16.13% and 20.65%, respectively, indicating efficient operations and cost management.

Balance Sheet

The balance sheet of Zurn Water Solutions is stable with a strong equity position. The debt-to-equity ratio is at 0.32, reflecting a manageable level of debt relative to equity. The return on equity (ROE) is 11.12%, indicating decent profitability relative to shareholder investment. The equity ratio is 58.96%, suggesting a solid foundation of assets financed by equity, though the balance sheet leverage could be reduced further.

Cash Flow

Zurn Water Solutions shows strong cash flow performance with a TTM free cash flow to net income ratio of 1.84, indicating effective cash generation relative to profits. The operating cash flow to net income ratio is 2.02, demonstrating strong cash conversion from earnings. The free cash flow growth rate is 17.79%, pointing to positive cash flow trajectory and efficient capital expenditure management.

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	346.80M	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: 46.17
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

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 46.17 is above the 20-day moving average (MA) of 44.03, above the 50-day MA of 39.67, and above the 200-day MA of 36.91, indicating a bullish trend. The MACD of 1.73 indicates Positive momentum. The RSI at 69.96 is Neutral, neither overbought nor oversold. The STOCH value of 62.49 is Neutral, 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
ATMU	79 Outperform	$3.47B	18.67	76.25%	0.46%	1.53%	8.93%
FSS	78 Outperform	$7.59B	34.71	18.77%	0.42%	9.09%	9.64%
ERII	76 Outperform	$754.89M	35.64	11.95%	―	6.19%	15.04%
CECO	76 Outperform	$1.65B	33.52	19.67%	―	15.74%	294.80%
ZWS	70 Outperform	$7.44B	43.89	10.81%	0.78%	4.74%	30.64%
Sector *	58 Neutral	HK$14.01B	4.01	-3.70%	5.60%	2.26%	-61.32%
PCT	38 Underperform	$2.26B	―	-148.91%	―	―	-79.12%

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.