Energy Recovery, Inc.
- Open
- 8.98
- Day high
- 9.23
- Day low
- 8.97
- Prev close
- 9.02
- Volume
- 164K
- Mkt cap
- $465M
- P/E (TTM)
- 23.1
- EPS (TTM)
- $0.40
- P/B
- 2.5
- P/S
- 3.4
- Yield
- —
- Per share
- —
- ▼Insiders net selling -$1.6M over the last 3 months (2 open-market buys, 3 sales)
- 🏛Institutions mixed (13F)
Energy Recovery, Inc. (ERII) is a Industrials company listed on NASDAQ. The stock is down 29% over the past year. Over the trailing 3 months, insiders filed 2 open-market buys and 3 sales (SEC Form 4).
Energy Recovery, Inc. (ERII) financials & analyst ratings
Fundamentals (TTM)
Source: exchange market data + company filings. Figures are trailing-twelve-month or as most recently reported. For informational purposes only — not investment advice.
ERII earnings date, history & EPS estimates
| Report date | EPS est | EPS actual | Surprise | Revenue | Rev. surprise |
|---|---|---|---|---|---|
| May 6, 2026 | $-0.10 | $-0.23 | -130.0% | $10M | +15.9% |
| Feb 25, 2026 | $0.67 | $0.53 | -20.9% | $67M | -19.4% |
| Nov 5, 2025 | $0.09 | $0.12 | +33.3% | $32M | -61.3% |
| Aug 6, 2025 | $0.02 | $0.07 | +250.0% | $28M | -34.5% |
| Feb 26, 2025 | $0.42 | $0.50 | +19.0% | $67M | -0.5% |
| Jul 31, 2024 | $0.05 | $0.09 | +91.1% | $27M | +18.9% |
| May 1, 2024 | $-0.11 | $-0.08 | +27.3% | $12M | -10.4% |
| Feb 21, 2024 | $0.38 | $0.34 | -10.5% | $57M | -10.0% |
| Nov 1, 2023 | $0.05 | $0.17 | +240.0% | $37M | +18.4% |
| Aug 2, 2023 | $-0.01 | $-0.03 | -200.0% | $21M | -15.5% |
| May 3, 2023 | $-0.12 | $-0.08 | +33.3% | $13M | +3.1% |
| Feb 22, 2023 | $0.15 | $0.24 | +60.0% | $42M | +3.9% |
ERII insider trading activity (SEC Form 4)
| Date | Insider | Type | Shares | Price |
|---|---|---|---|---|
| Jun 17, 2026 | Sabol Colin Rdirector | Buy | 11,180 | $8.88 |
| Jun 17, 2026 | BUEHLER ALEXANDER Jdirector, officer: Interim President and CEO | Sell | 14,900 | $8.71 |
| Jun 17, 2026 | BUEHLER ALEXANDER Jdirector, officer: Interim President and CEO | Option | 15,327 | $8.60 |
| Jun 5, 2026 | Chow Joan Kaidirector | Grant | 18,094 | $8.29 |
| Jun 5, 2026 | Hanstveit Arvedirector | Grant | 18,094 | $8.29 |
| Jun 5, 2026 | TONDREAU PAMELA L.director | Grant | 22,316 | $8.29 |
| Jun 5, 2026 | Sabol Colin Rdirector | Grant | 18,094 | $8.29 |
| May 15, 2026 | TONDREAU PAMELA L.director | Buy | 20,000 | $8.34 |
| Apr 8, 2026 | Hanstveit Arvedirector | Sell | 2,419 | $10.29 |
| Apr 6, 2026 | Hanstveit Arvedirector | Sell | 165,292 | $10.14 |
| Mar 11, 2026 | Hanstveit Arvedirector | Sell | 25,000 | $10.96 |
| Mar 9, 2026 | Hanstveit Arvedirector | Sell | 11,582 | $10.62 |
| Mar 9, 2026 | Hanstveit Arvedirector | Sell | 38,418 | $10.71 |
| Mar 6, 2026 | Ramanan Natarajanofficer: Chief Technology Officer | Sell | 272 | $10.57 |
| Mar 6, 2026 | Clemente Rodneyofficer: SVP, Water | Sell | 20,568 | $10.61 |
Source: ERII SEC Form 4 filings, latest Jun 17, 2026. For informational purposes only — not investment advice.
See the full ERII insider & 13F page →Energy Recovery, Inc. company profile
Overview
Energy Recovery, Inc. (NASDAQ:ERII) is a San Leandro, California-based industrial technology company founded in 1992 and publicly traded since 2008. The company specializes in energy recovery solutions primarily for seawater desalination plants, where its pressure exchanger technology has established it as a market leader. Over three decades, Energy Recovery has evolved from a single-product desalination specialist into a diversified industrial technology company, expanding into wastewater treatment and CO2 refrigeration systems while maintaining its dominant position in the global desalination market.
Business
Energy Recovery operates in the industrial pollution and treatment controls sector, focusing on energy-efficient solutions for water treatment and refrigeration systems. The company's business is organized into two main segments: Water and Emerging Technologies. The Water segment represents the company's core business, generating approximately 85-90% of total revenue. This segment includes both desalination and wastewater treatment solutions. The flagship product is the Pressure Exchanger (PX) technology, which recovers energy from high-pressure brine waste streams in seawater reverse osmosis (SWRO) desalination plants. In simple terms, when seawater is forced through membranes at extremely high pressure to remove salt, about half the water becomes fresh while the other half becomes high-pressure brine waste. The PX device captures this pressure energy and transfers it to incoming seawater, reducing the overall energy consumption of the desalination process by up to 60%. The company also manufactures complementary products including high-pressure pumps, hydraulic turbochargers, and provides aftermarket services. The Emerging Technologies segment encompasses two newer business lines. The industrial wastewater treatment business applies similar pressure exchange technology to treat contaminated water from industries like textiles, lithium processing, and chemical manufacturing. The CO2 refrigeration business represents the company's newest venture, where their PX G technology improves the efficiency of carbon dioxide-based commercial refrigeration systems used in supermarkets and industrial facilities. This technology can increase cooling capacity by up to 15% while reducing energy consumption by up to 30% compared to traditional CO2 refrigeration systems.
Revenue model
Energy Recovery generates revenue primarily through direct product sales to large engineering, procurement, and construction (EPC) firms that build desalination plants, as well as to original equipment manufacturers (OEMs) and end-users. The company's business model combines upfront equipment sales with ongoing aftermarket services including spare parts, repairs, and field services. The desalination business benefits from several favorable macro trends that support margin expansion. Growing global water scarcity, particularly in arid regions like the Middle East and North Africa, drives consistent demand for new desalination capacity. Rising energy costs make the company's energy-saving technology increasingly valuable to plant operators, as energy typically represents 50-60% of a desalination plant's operating costs. The company's dominant market position in pressure exchange technology allows it to maintain premium pricing, with gross margins typically ranging from 64-69%. However, several factors could pressure margins. The company faces exposure to commodity price fluctuations for materials like ceramics and metals used in manufacturing. Potential trade tensions and tariffs, particularly affecting exports to China for the wastewater business, could impact profitability. Additionally, as the company expands into newer markets like CO2 refrigeration, initial commercialization costs and competitive pricing pressures may temporarily reduce overall margins. The cyclical nature of large desalination projects can also create quarterly revenue volatility, though the company has demonstrated consistent annual growth over the past decade. Manufacturing efficiency improvements represent a key margin expansion opportunity, with the company implementing continuous improvement processes to optimize production cycles, kiln operations, and assembly procedures. The shift toward higher-capacity products like the Q400 pressure exchanger also supports better economies of scale and pricing power.
Competitive moat
Energy Recovery possesses a strong competitive moat built primarily on technological leadership, intellectual property, and market incumbency in the desalination industry. The company holds numerous patents on pressure exchange technology and has developed deep expertise in ceramic manufacturing and precision engineering that would be difficult for competitors to replicate quickly. Their pressure exchangers are integral to the design of most large seawater desalination plants globally, creating high switching costs for customers who would need to redesign entire systems to use alternative technologies. The company's moat is further strengthened by its established relationships with major EPC firms and plant operators, built over decades of reliable performance. The mission-critical nature of desalination equipment creates a preference for proven, reliable suppliers, giving Energy Recovery significant incumbency advantages. Additionally, the company's aftermarket services business provides recurring revenue streams and deepens customer relationships. However, the moat faces potential challenges from several directions. In the desalination market, alternative energy recovery technologies like turbines or pumps-as-turbines could potentially compete, though they currently offer inferior efficiency. The company's expansion into wastewater treatment and CO2 refrigeration represents moves into markets where it lacks the same dominant position and faces more established competitors. In CO2 refrigeration particularly, the company is competing against larger industrial players with greater resources and established distribution networks. The strength of Energy Recovery's moat is most evident in desalination, where no direct competitors offer comparable pressure exchange technology. In emerging markets, the moat is narrower but the company is leveraging its core engineering capabilities and attempting to establish similar technological advantages through patent development and first-mover positioning.
Risks & safety
Energy Recovery demonstrates a strong margin of safety with minimal financial risk and reasonable valuation metrics. • Financial Strength: The company maintains excellent liquidity with $49 million in cash and short-term investments against only $27 million in total liabilities. Current ratio of 8.4x and quick ratio of 6.6x indicate exceptional short-term financial stability. • Debt Position: Very low debt-to-equity ratio of 0.056 indicates minimal leverage risk. The company generates positive free cash flow of $10.5 million in Q1 2025 despite temporary earnings weakness. • Valuation Metrics: Trading at 4.4x book value and negative EV/EBITDA due to temporary losses, but historical P/E ratios in the 8-50x range suggest reasonable valuation during profitable periods. Graham net-net ratio of 1.76 indicates trading below net current asset value. • Other Considerations: Strong balance sheet provides flexibility for strategic investments and acquisitions. Cyclical revenue patterns create temporary volatility but long-term growth trajectory remains intact. Management's share buyback program demonstrates confidence in intrinsic value.
Recent development
Over the past few years, Energy Recovery has executed a strategic transformation from a single-product desalination company into a diversified industrial technology platform. The company has systematically expanded beyond its core desalination business through both organic development and market expansion initiatives. In the desalination segment, the company launched the Q400 Pressure Exchanger, its highest-capacity and most efficient product, which now generates significant revenue from mega-projects. Geographic expansion has diversified the customer base beyond the traditional Middle East focus, with growing presence in North Africa, India, and Brazil. The company has also strengthened its aftermarket services business, providing recurring revenue streams. The wastewater treatment business has evolved from experimental to commercial, targeting industrial applications in lithium processing, textiles, and chemical manufacturing. The company has expanded this business across 16 different industries and over 30 countries, with projected 2025 revenue of $13-16 million. However, recent earnings calls indicate the company is reassessing this market and exploring alternative opportunities in India and North America due to challenges in the Chinese market. The CO2 refrigeration business represents the company's most ambitious expansion, with the development of second-generation PX G technology for commercial refrigeration systems. The company has installed test sites across North America and Europe, partnering with major OEMs and retailers. Key partnerships include collaborations with Hillphoenix and multiple supermarket chains to validate energy savings and reliability. Manufacturing optimization has been a consistent focus, with continuous improvement initiatives targeting production efficiency, cycle times, and quality control. The company has also been developing its strategic "Playbook" to guide future expansion decisions and capital allocation priorities.
ERII company profile · for informational purposes only — not investment advice.
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