Zurn Water Solutions (ZWS)
NYSE:ZWS
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Zurn Water Solutions
(NYSE:ZWS)
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Rating:77Outperform
Price Target:
$59.00
▲(23.56% Upside)
Action:Reiterated
Date:05/02/26
The score is driven by strong financial performance (notably free-cash-flow strength and healthy margins) and supportive technical momentum. These positives are reinforced by upbeat guidance and ongoing margin expansion commentary from the latest earnings call. The primary offset is valuation, with a high P/E and a low dividend yield.
Positive Factors
Strong cash generation
Consistent, high-quality cash generation (TTM OCF ~$350M and FCF ~$324M) creates durable financial flexibility. Strong FCF coverage versus earnings funds buybacks, dividends, capex and selective M&A without heavy reliance on external financing, supporting long-term resilience.
Negative Factors
Modest / uneven revenue growth
Revenue growth has been modest and uneven, limiting the upside from operating leverage. Structural reliance on construction and retrofit cycles can cause multi-period variability, constraining predictability of long-term top-line expansion despite margin gains.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong cash generation
Consistent, high-quality cash generation (TTM OCF ~$350M and FCF ~$324M) creates durable financial flexibility. Strong FCF coverage versus earnings funds buybacks, dividends, capex and selective M&A without heavy reliance on external financing, supporting long-term resilience.
Read all positive factors
Zurn Water Solutions (ZWS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$8.02B
Dividend Yield0.8%
Average Volume (3M)1.01M
Price to Earnings (P/E)31.9
Beta (1Y)0.90
Revenue Growth10.03%
EPS Growth28.13%
CountryUS
Employees2,500
SectorIndustrials
Sector Strength72
IndustryIndustrial - Pollution & Treatment Controls
Share Statistics
EPS (TTM)1.27
Shares Outstanding166,871,920
10 Day Avg. Volume1,167,033
30 Day Avg. Volume1,011,981
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 Cap1.04
Enterprise Value/Revenue4.78
Enterprise Value/Gross Profit10.94
Enterprise Value/Ebitda22.44
Forecast
1Y Price Target
$54.67Price Target Upside14.49% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering7
EPS Forecast (FY)1.76
Revenue Forecast (FY)$1.83B
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:Apr 21, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 28, 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
78
Positive
Balance Sheet
74
Positive
Cash Flow
82
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 | 760.20M | 706.10M | 707.00M | 648.10M | 465.50M | 373.20M |
| EBITDA | 370.60M | 373.60M | 328.40M | 273.20M | 165.20M | 164.60M |
| Net Income | 213.30M | 198.00M | 160.20M | 112.70M | 61.70M | 120.90M |
Balance Sheet | ||||||
| Total Assets | 2.68B | 2.68B | 2.65B | 2.67B | 2.86B | 1.08B |
| Cash, Cash Equivalents and Short-Term Investments | 273.50M | 300.50M | 198.00M | 136.70M | 124.80M | 96.60M |
| Total Debt | 537.10M | 580.50M | 551.60M | 543.20M | 579.50M | 554.50M |
| Total Liabilities | 1.08B | 1.08B | 1.06B | 1.06B | 1.25B | 951.30M |
| Stockholders Equity | 1.61B | 1.60B | 1.59B | 1.60B | 1.61B | 126.40M |
Cash Flow | ||||||
| Free Cash Flow | 320.70M | 316.60M | 271.70M | 232.60M | 89.40M | 200.30M |
| Operating Cash Flow | 349.70M | 346.50M | 293.50M | 253.90M | 97.00M | 223.60M |
| Investing Cash Flow | -29.00M | -29.90M | -20.20M | -4.60M | -6.60M | -21.90M |
| Financing Cash Flow | -194.40M | -217.30M | -207.50M | -239.20M | -61.10M | -356.20M |
Zurn Water Solutions Technical Analysis
Positive
47.75
Price Trends
48.02
Negative
47.51
Positive
45.90
Positive
Market Momentum
0.27
Negative
54.01
Neutral
50.81
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 47.75 is above the 20-day moving average (MA) of 46.16, below the 50-day MA of 48.02, and above the 200-day MA of 45.90, indicating a neutral trend. The MACD of 0.27 indicates Negative momentum. The RSI at 54.01 is Neutral, neither overbought nor oversold. The STOCH value of 50.81 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 |
|---|---|---|---|---|---|---|---|
77 Outperform | $8.02B | 31.92 | 13.40% | 0.80% | 10.03% | 28.13% | |
76 Outperform | $6.79B | 23.39 | 20.05% | 0.49% | 23.25% | 28.92% | |
73 Outperform | $2.90B | 173.67 | 5.54% | ― | 32.11% | -71.47% | |
63 Neutral | $10.79B | 15.43 | 7.44% | 2.01% | 2.89% | -14.66% | |
61 Neutral | $433.50M | -10.82 | 10.89% | ― | -3.05% | 4.46% | |
54 Neutral | $4.22B | 23.93 | 58.84% | 0.39% | 9.99% | 15.89% | |
52 Neutral | $2.28B | -7.00 | -408.05% | ― | 590.00% | -15.72% |
* Industrials Sector Average
ZWS
Zurn Water Solutions
48.06
10.98
29.59%
CECO
Ceco Environmental
80.84
53.56
196.33%
ERII
Energy Recovery
8.41
-4.67
-35.70%
FSS
Federal Signal
111.33
15.71
16.43%
PCT
PureCycle Technologies
12.59
3.81
43.39%
ATMU
Atmus Filtration Technologies, Inc.
51.64
13.50
35.39%
Zurn Water Solutions Corporate Events
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...
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.