MODEL VERDICT
Energy Recovery, Inc. (ERII)
Relative Valuation•Peer multiples, Monte Carlo simulation & quality-adjusted fair value
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Composite score derived from valuation, quality, and risk factors
Quantitative model thresholds · For educational and research purposes only
Each row records the model's monthly assessment. High Conviction = the model detected notable undervaluation vs peers. Neutral = no notable divergence was found. The return column shows the actual price change over 90 days for reference. This is a quantitative observation log — not investment advice.
| Date | Assessment | Score | Price | Status | 90d Fwd Return |
|---|---|---|---|---|---|
| May 1, 2026 | MODERATE | 0.57 | $11.04 | CURRENT | — |
| Apr 24, 2026 | MODERATE | 0.57 | $11.28 | CURRENT | — |
| Apr 17, 2026 | NEUTRAL | 0.13 | $10.58 | CURRENT | — |
| Apr 16, 2026 | NEUTRAL | 0.13 | $10.62 | CURRENT | — |
| Apr 10, 2026 | NEUTRAL | 0.13 | $11.11 | CURRENT | — |
Historical model observations for research purposes only. Past quantitative patterns do not predict future results. Not a recommendation to buy, sell, or hold any security.
| Methodology | Fair Value | vs Current | Weight | Quality | Status |
|---|---|---|---|---|---|
| Forward P/E 6 analyst estimates | $8.75 | -20.7% | 20% | A- | Analyst Est. |
| EV/EBITDA 6 industry peers | $19.53 | +76.9% | 20% | A- | Peer Data |
| Price / Free Cash Flow 5 industry peers | $7.54 | -31.7% | 15% | B+ | Peer Data |
| EV/EBIT 6 industry peers | $28.27 | +156.1% | 8% | B+ | Peer Data |
| EV/FCF 5 industry peers | $8.64 | -21.7% | 7% | B | Model Driven |
| EV To Revenue 7 industry peers | $8.38 | -24.1% | 4% | B | Data |
| Price / Sales 8 industry peers | $7.41 | -32.9% | 3% | B | Model Driven |
| FCF Yield 5 industry peers | $7.58 | -31.3% | 1% | B | Data |
| Weighted Output Blended model output | $15.85 | +43.6% | 100% | 57 | SIGNIFICANTLY UNDERVALUED |
Cross-sectional regression predicting expected multiples based on growth, margins, ROIC, and beta.
| Multiple | Avg | Median | Min | Max | Std |
|---|---|---|---|---|---|
| P/E Ratio | 51.09 | 49.85 | 29.02 | 89.54 | 20.86 |
| EV/EBIT | 49.49 | 48.76 | 20.70 | 87.05 | 22.02 |
| EV/EBITDA | 37.83 | 36.43 | 19.02 | 60.90 | 13.66 |
| P/FCF | 95.15 | 76.60 | 44.21 | 184.31 | 59.42 |
| P/FFO | 38.49 | 37.39 | 24.38 | 62.45 | 13.15 |
| P/TBV | 5.29 | 4.87 | 3.68 | 7.60 | 1.43 |
| P/AFFO | 51.97 | 43.73 | 30.83 | 93.28 | 24.60 |
| P/B Ratio | 4.92 | 4.50 | 3.45 | 7.06 | 1.33 |
| P/S Ratio | 8.64 | 8.43 | 5.86 | 12.15 | 2.09 |
Based on our peer multiples analysis with 21 valuation metrics, the model estimates ERII's fair value at $15.85 vs the current price of $11.04, implying +43.6% upside potential. Model verdict: Significantly Undervalued. Confidence: 57/100. This is a quantitative estimate, not a recommendation.
The blended fair value of $15.85 is calculated using four lenses: industry median multiples (40%), historical multiples (30%), forward estimates (20%), and quality-adjusted multiples (10%). Monte Carlo simulation (10,000 iterations) gives a range of $16.52 (P10) to $23.94 (P90), with a median of $20.21.
ERII's current P/E of N/Ax compares to the industry median of 29.3x (5 peers in the group). This represents a N/A discount to the industry. The historical average P/E is 51.1x over 6 years. Signal: N/A.
16 analysts cover ERII with a consensus rating of Buy. The consensus price target is $13.00 (range: $13.00 — $13.00), implying +17.8% upside from the current price. Grade breakdown: Strong Buy (1), Buy (11), Hold (3), Sell (1), Strong Sell (0).
The model confidence score is 57/100, based on: data completeness (21), peer quality (25), historical depth (20), earnings stability (4), and model agreement (2). Cyclicality penalty: --15 points. The model shows moderate agreement across inputs.
The model flags several key risks: (1) Macro/regulatory risks are not captured in this model but remain material.
Peak earnings risk data is not available for ERII.
No. This dashboard is a quantitative research tool for educational and informational purposes only. It is not investment advice, a solicitation, or a recommendation to buy, sell, or hold any security. The operator of this platform is not a registered investment advisor (RIA), broker-dealer, or financial planner. All model outputs, fair value estimates, signals, and scenarios are the result of automated quantitative computations and should not be construed as professional financial guidance. You should consult a qualified, licensed financial advisor before making any investment decisions. Past model performance is not indicative of future results.