Energy Recovery (NASDAQ:ERII) Posts Earnings Results, Misses Estimates By $0.01 EPS

Energy Recovery (NASDAQ:ERII) released its earnings results on Wednesday. The industrial products company reported ($0.03) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.02) by ($0.01), FiscalAI reports. The business had revenue of $12.00 million for the quarter, compared to analysts’ expectations of $18.36 million. Energy Recovery had a return on equity of 10.89% and a net margin of 15.07%.

Here are the key takeaways from Energy Recovery’s conference call:

• Geopolitical conflict continues to delay mega-project execution in the Middle East, with financing, EPC appointments, procurement and logistics affected; management cannot yet provide a timeline for market recovery or reinstate guidance.
• Energy Recovery reported a strong, uniquely positioned long-term pipeline extending up to five years, but cautioned that the disclosed $27 million backlog has limited value for forecasting 2026 revenue; management expects MPD growth to reappear in 2027 and beyond.
• OEM and aftermarket businesses are expected to remain resilient for full-year 2026, despite some weakness and volatility in the first half.
• The PX Q650 launch remains on track, with commercial adoption already underway and new deals being signed; management views the product as strengthening Energy Recovery’s competitive position in larger water projects.
• The Saudi Arabia manufacturing facility is expected to improve margins gradually from 2027 onward through lower freight, shipping and procurement costs, while requiring only limited incremental capital spending.

Energy Recovery Stock Down 2.8%

Energy Recovery stock traded down $0.26 during midday trading on Wednesday, reaching $8.87. 911,117 shares of the stock traded hands, compared to its average volume of 810,284. The stock’s fifty day moving average is $8.61 and its 200-day moving average is $10.61. Energy Recovery has a 12 month low of $7.83 and a 12 month high of $18.32. The stock has a market cap of $456.90 million, a P/E ratio of 23.33 and a beta of 0.91.

Analysts Set New Price Targets

Several research analysts have weighed in on ERII shares. Northcoast Research downgraded Energy Recovery from a “buy” rating to a “neutral” rating in a research note on Wednesday, April 15th. Wall Street Zen lowered shares of Energy Recovery from a “hold” rating to a “sell” rating in a report on Saturday, May 16th. Weiss Ratings cut shares of Energy Recovery from a “sell (d+)” rating to a “sell (d)” rating in a research report on Thursday, June 25th. Freedom Capital downgraded shares of Energy Recovery from a “strong-buy” rating to a “hold” rating in a report on Monday, May 11th. Finally, Seaport Research Partners restated a “buy” rating and set a $12.00 target price on shares of Energy Recovery in a research report on Wednesday, May 13th. One equities research analyst has rated the stock with a Buy rating, three have assigned a Hold rating and one has issued a Sell rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of “Hold” and a consensus price target of $15.00.

Insiders Place Their Bets

In other news, Director Colin R. Sabol acquired 11,180 shares of Energy Recovery stock in a transaction on Monday, June 15th. The shares were acquired at an average price of $8.88 per share, with a total value of $99,278.40. Following the purchase, the director directly owned 55,671 shares in the company, valued at $494,358.48. The trade was a 25.13% increase in their position. The transaction was disclosed in a document filed with the Securities & Exchange Commission, which is available through this hyperlink. Also, SVP Rodney Clemente sold 5,387 shares of the company’s stock in a transaction that occurred on Tuesday, July 28th. The stock was sold at an average price of $8.56, for a total value of $46,112.72. Following the sale, the senior vice president directly owned 108,301 shares in the company, valued at $927,056.56. This trade represents a 4.74% decrease in their ownership of the stock. The disclosure for this sale is available in the SEC filing. Corporate insiders own 2.50% of the company’s stock.

Hedge Funds Weigh In On Energy Recovery

Several institutional investors have recently bought and sold shares of ERII. Wexford Capital LP purchased a new position in shares of Energy Recovery in the 3rd quarter worth $27,000. Parallel Advisors LLC bought a new position in shares of Energy Recovery in the 4th quarter valued at about $38,000. Tower Research Capital LLC TRC lifted its holdings in shares of Energy Recovery by 172.2% in the 2nd quarter. Tower Research Capital LLC TRC now owns 6,011 shares of the industrial products company’s stock valued at $77,000 after acquiring an additional 3,803 shares during the last quarter. PDT Partners LLC purchased a new position in Energy Recovery in the second quarter worth about $159,000. Finally, Man Group plc purchased a new position in Energy Recovery in the third quarter worth about $162,000. Institutional investors own 83.58% of the company’s stock.

About Energy Recovery

Energy Recovery, Inc (NASDAQ: ERII) is an energy technology company specializing in the design and manufacture of high-efficiency devices that capture and repurpose energy in fluid-handling applications. The company’s core offering, the Pressure Exchanger® (PX®) device, enables seawater reverse osmosis (SWRO) desalination plants to recover and reuse hydraulic energy that would otherwise be lost during brine discharge. By integrating PX technology into desalination processes, Energy Recovery helps operators significantly reduce the energy consumption and operating costs of producing fresh water from seawater or brackish sources.

In addition to desalination solutions, Energy Recovery has expanded its portfolio to serve the oil and gas sector through turbocharger systems that improve the energy efficiency of hydraulic fracturing operations.