Energy Recovery misses Q3 revenue estimates

Overview

• Energy Recovery Q3 revenue fell 17% yr/yr, missing analyst expectations

• Net income for Q3 decreased 54% yr/yr

• Gross margin decreased by 90 bps due to product mix and tariffs

Outlook

• Company did not provide specific guidance for future quarters or full year

Result Drivers

• REVENUE TIMING - Revenue decline attributed to timing of revenue from contracted projects

• GROSS MARGIN PRESSURE - Gross margin decreased due to costs related to product mix and tariffs, partially offset by lower indirect manufacturing costs

• OPERATING EXPENSES - Decrease in operating expenses driven by lower employee and development costs, offset by higher consulting costs

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 3 "strong buy" or "buy", 1 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the industrial machinery & equipment peer group is "buy"

• Wall Street's median 12-month price target for Energy Recovery Inc is $16.00, about 2.6% below its November 4 closing price of $16.41

• The stock recently traded at 22 times the next 12-month earnings vs. a P/E of 21 three months ago

Press Release: ID:nBwcgg1Psa

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