Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Energy Recovery (NASDAQ: ERII) and the best and worst performers in the water infrastructure industry.
Trends towards conservation and reducing groundwater depletion are putting water infrastructure and treatment products front and center. Companies that can innovate and create solutions–especially automated or connected solutions–to address these thematic trends will create incremental demand and speed up replacement cycles. On the other hand, water infrastructure and treatment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.
The 5 water infrastructure stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8%.
While some water infrastructure stocks have fared somewhat better than others, they have collectively declined. On average, share prices are down 1.7% since the latest earnings results.
Energy Recovery (NASDAQ: ERII)
Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ: ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.
Energy Recovery reported revenues of $32 million, down 17.1% year on year. This print exceeded analysts’ expectations by 6.9%. Overall, it was a strong quarter for the company with an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.
Energy Recovery achieved the biggest analyst estimates beat but had the slowest revenue growth of the whole group. Investor expectations, however, were likely higher than Wall Street’s published projections, leaving some wishing for even better results (analysts’ consensus estimates are those published by big banks and advisory firms, not the investors who make buy and sell decisions). The stock is down 17.1% since reporting and currently trades at $14.30.
Best Q3: Watts Water Technologies (NYSE: WTS)
Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.
Watts Water Technologies reported revenues of $611.7 million, up 12.5% year on year, outperforming analysts’ expectations by 6.2%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.
Watts Water Technologies scored the fastest revenue growth among its peers. The market seems happy with the results as the stock is up 5.2% since reporting. It currently trades at $296.98.
Is now the time to buy Watts Water Technologies? Access our full analysis of the earnings results here, it’s free.
Weakest Q3: Tennant (NYSE: TNC)
As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE: TNC) designs, manufactures, and sells cleaning products to various sectors.
Tennant reported revenues of $303.3 million, down 4% year on year, falling short of analysts’ expectations by 0.9%. It was a slower quarter as it posted a significant miss of analysts’ EPS estimates and a slight miss of analysts’ revenue estimates.
Tennant delivered the highest full-year guidance raise but had the weakest performance against analyst estimates in the group. The stock is flat since the results and currently trades at $79.74.
Read our full analysis of Tennant’s results here.
Xylem (NYSE: XYL)
Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.
Xylem reported revenues of $2.27 billion, up 7.8% year on year. This print topped analysts’ expectations by 1.9%. Overall, it was an exceptional quarter as it also produced a solid beat of analysts’ EBITDA estimates and an impressive beat of analysts’ adjusted operating income estimates.
The stock is down 1.8% since reporting and currently trades at $146.77.
Read our full, actionable report on Xylem here, it’s free.
Mueller Water Products (NYSE: MWA)
As one of the oldest companies in the water infrastructure industry, Mueller (NYSE: MWA) is a provider of water infrastructure products and flow control systems for various sectors.
Mueller Water Products reported revenues of $380.8 million, up 9.4% year on year. This result beat analysts’ expectations by 5.2%. It was a very strong quarter as it also put up a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.
Mueller Water Products had the weakest full-year guidance update among its peers. The stock is up 5.3% since reporting and currently trades at $26.36.
Read our full, actionable report on Mueller Water Products here, it’s free.
Want to invest in winners with rock-solid fundamentals? Check out our 9 Best Market-Beating Stocks and add them to your watchlist. These companies are poised for growth regardless of the political or macroeconomic climate.
StockStory’s analyst team — all seasoned professional investors — uses quantitative analysis and automation to deliver market-beating insights faster and with higher quality.
