Want to see ZWS full AI Analyst Report?
Top Page
Zurn Water Solutions
(NYSE:ZWS)
Select Model
Select Model
Rating:77Outperform
Price Target:
$56.00
▲(15.75% Upside)
Action:Upgraded
Date:07/29/26
The score is driven primarily by strong financial performance—especially improving profitability and high-quality free cash flow—reinforced by an upbeat earnings call with solid growth and margin guidance. Offsetting factors are a relatively expensive valuation (P/E ~29.9 with a sub-1% yield) and only moderate technical confirmation given limited momentum data, while recent corporate events are broadly supportive but smaller in impact.
Positive Factors
High-quality cash generation
Sustained operating and free cash flow growth with FCF roughly matching net income demonstrates durable cash conversion. This supports recurring dividends, opportunistic buybacks, disciplined M&A and a low leverage profile, giving the company long-term financial flexibility and resilience.
Negative Factors
Tariff and trade-policy risk
Frequent changes to tariffs and Section 301/122 actions make input costs and net price effects less predictable. Management’s conservative stance (no assumed refunds) means adverse policy shifts could compress margins or force price increases that slow volume in specification-driven markets.
Read all positive and negative factors
Positive Factors
Negative Factors
High-quality cash generation
Sustained operating and free cash flow growth with FCF roughly matching net income demonstrates durable cash conversion. This supports recurring dividends, opportunistic buybacks, disciplined M&A and a low leverage profile, giving the company long-term financial flexibility and resilience.
Read all positive factors
Zurn Water Solutions (ZWS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.38B
Dividend Yield0.83%
Average Volume (3M)1.05M
Price to Earnings (P/E)30.6
Beta (1Y)0.87
Revenue Growth10.69%
EPS Growth60.92%
CountryUS
Employees2,600
SectorIndustrials
Sector Strength72
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)1.65
Shares Outstanding165,864,090
10 Day Avg. Volume994,463
30 Day Avg. Volume1,045,978
Financial Highlights & Ratios
PEG Ratio1.81
Price to Book (P/B)4.89
Price to Sales (P/S)4.62
P/FCF Ratio24.77
Enterprise Value/Market Cap<0.01
Enterprise Value/Revenue<0.01
Enterprise Value/Gross Profit<0.01
Enterprise Value/Ebitda<0.01
Forecast
1Y Price Target
$58.43Price Target Upside20.77% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering8
EPS Forecast (FY)1.76
Revenue Forecast (FY)$1.83B
Zurn Water Solutions Business Overview & Revenue Model
Company Description
Zurn Elkay Water Solutions Corporation (ZEWS) is a leading provider of comprehensive water system solutions. The company is involved in the entire lifecycle, from design and procurement to manufacturing and marketing, with a focus on optimizing wa...
How the Company Makes Money
Zurn Water Solutions primarily makes money by selling water management and plumbing products to the building and construction ecosystem. Revenue is generated through product sales across core categories such as (1) valves and backflow prevention (...
Zurn Water Solutions Earnings Call Summary
Earnings Call Date:Apr 21, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Nov 03, 2026
Earnings Call Sentiment Positive
The call conveyed a strongly positive operational and financial performance in Q1 — double-digit core sales growth, robust EBITDA expansion, expanding margins, solid free cash flow, low leverage and increased liquidity — supported by successful product adoption (notably drinking water filtration) and ongoing operational improvements. The primary negatives were manageable: softer residential demand, tariff/trade-policy uncertainty, and the decision to defer second-half outlook updates until after Q2. Overall the positives (growth, margin expansion, cash generation, balance-sheet strength and product momentum) substantially outweigh the cautions.Positive Updates
Top-Line Growth
Q1 sales of $433 million, representing 11% core and reported year-over-year growth. Management attributed ~5 percentage points to price with the remainder from volume; company expects Q2 core sales growth of 8%–9%.
Negative Updates
Residential End-Market Softness
Residential end markets were described as softer in Q1; company guidance assumes residential down low single digits for 2026, partially offset by stronger nonresidential demand.
Read all updates
Q1-2026 Updates
Positive
Negative
Top-Line Growth
Q1 sales of $433 million, representing 11% core and reported year-over-year growth. Management attributed ~5 percentage points to price with the remainder from volume; company expects Q2 core sales growth of 8%–9%.
Read all positive updates
Company Guidance
For Q2 2026 Zurn Elkay is guiding core sales growth of 8–9% and an adjusted EBITDA margin of 27.0–27.5% (a 50–100 bp YoY expansion); management reiterated full‑year free cash flow of approximately $335 million and said it will revisit the second half after Q2. In Q1 the company reported $433 million of sales (11% core growth — roughly 5 pts price, remainder volume), adjusted EBITDA of $116 million (26.8% margin, +160 bps YoY), $43 million of free cash flow, $50 million of share repurchases at about $47/share, and ended the quarter with net leverage of 0.5x while upsizing its revolver to $550 million (from $200 million) with a five‑year extension. Guidance assumes the current tariff structure remains in place (no tariff refunds included), management expects the discrete tariff impact in 2026 to be net price/cost positive as modeled, noted about a 1‑point weather benefit in H1, and highlighted multi‑year margin gains (≈630 bps TTM since Q1‑2023; ≈730 bps over 13 quarters).Zurn Water Solutions Financial Statement Overview
Summary
Income Statement
83
Very Positive
Balance Sheet
78
Positive
Cash Flow
88
Very Positive
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.74B | 1.70B | 1.57B | 1.53B | 1.28B | 910.90M |
| Gross Profit | 778.00M | 706.10M | 707.00M | 648.10M | 465.50M | 373.20M |
| EBITDA | 353.90M | 373.60M | 328.40M | 273.20M | 165.20M | 164.60M |
| Net Income | 276.10M | 198.00M | 160.20M | 112.70M | 61.70M | 120.90M |
Balance Sheet | ||||||
| Total Assets | 2.78B | 2.68B | 2.65B | 2.67B | 2.86B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 365.00M | 300.50M | 198.00M | 136.70M | 124.80M | 96.60M |
| Total Debt | 550.50M | 580.50M | 551.60M | 543.20M | 579.50M | 554.50M |
| Total Liabilities | 1.12B | 1.08B | 1.06B | 1.06B | 1.25B | 951.30M |
| Stockholders Equity | 1.66B | 1.60B | 1.59B | 1.60B | 1.61B | 126.40M |
Cash Flow | ||||||
| Free Cash Flow | 375.10M | 316.60M | 271.70M | 232.60M | 89.40M | 200.30M |
| Operating Cash Flow | 401.40M | 346.50M | 293.50M | 253.90M | 97.00M | 223.60M |
| Investing Cash Flow | -22.90M | -29.90M | -20.20M | -4.60M | -6.60M | -21.90M |
| Financing Cash Flow | -215.40M | -217.30M | -207.50M | -239.20M | -61.10M | -356.20M |
Zurn Water Solutions Technical Analysis
Positive
48.38
Price Trends
48.76
Positive
48.36
Positive
47.94
Positive
Market Momentum
0.99
Negative
60.70
Neutral
66.34
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 48.38 is below the 20-day moving average (MA) of 49.20, below the 50-day MA of 48.76, and above the 200-day MA of 47.94, indicating a bullish trend. The MACD of 0.99 indicates Negative momentum. The RSI at 60.70 is Neutral, neither overbought nor oversold. The STOCH value of 66.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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 |
|---|---|---|---|---|---|---|---|
79 Outperform | $7.63B | 26.64 | 20.22% | 0.49% | 23.97% | 28.96% | |
77 Outperform | $8.38B | 30.61 | 17.09% | 0.87% | 10.69% | 60.92% | |
71 Outperform | $445.87M | 22.13 | 10.89% | ― | -3.05% | 4.46% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
63 Neutral | $4.22B | 20.01 | 58.84% | 0.41% | 9.99% | 15.89% | |
60 Neutral | $3.85B | 134.97 | 5.54% | ― | 32.11% | -71.47% | |
49 Neutral | $1.26B | -5.05 | -408.05% | ― | 590.00% | -15.72% |
* Industrials Sector Average
ZWS
Zurn Water Solutions
51.84
7.69
17.41%
CECO
Ceco Environmental
68.61
24.59
55.86%
ERII
Energy Recovery
8.73
-5.92
-40.41%
FSS
Federal Signal
127.83
2.32
1.85%
PCT
PureCycle Technologies
6.87
-5.48
-44.37%
ATMU
Atmus Filtration Technologies, Inc.
54.51
15.99
41.53%
Zurn Water Solutions Corporate Events
Business Operations and StrategyFinancial DisclosuresM&A Transactions
Zurn Elkay to Acquire Intellihot, Expanding Heating Portfolio
Positive
Jul 20, 2026
On July 20, 2026, Zurn Elkay Water Solutions announced a definitive agreement to acquire Intellihot Inc., a privately held leader in high-efficiency gas and electric tankless water heaters serving healthcare, education, hospitality and commercial ...
Executive/Board ChangesShareholder Meetings
Zurn Water Solutions Announces Leadership Transition and Governance Votes
Positive
May 1, 2026
On April 30, 2026, Zurn Elkay Water Solutions Corporation announced that Executive Vice President of Zurn Elkay Business Systems, Sudhanshu Chhabra, transitioned into an advisory role, indicating a leadership shift within its operational managemen...
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.