Energy Recovery (NASDAQ:ERII) Announces Earnings Results, Misses Estimates By $0.14 EPS

Energy Recovery (NASDAQ:ERII) issued its earnings results on Wednesday. The industrial products company reported $0.53 earnings per share (EPS) for the quarter, missing analysts’ consensus estimates of $0.67 by ($0.14), FiscalAI reports. Energy Recovery had a net margin of 14.44% and a return on equity of 10.09%. Energy Recovery updated its FY 2026 guidance to 0.500-0.700 EPS.

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

• Management says the business hit an “air pocket” as several large desalination projects delayed, and 2026 guidance assumes three megaprojects (~$25M–$30M) slip into 2027 plus an additional $15M–$25M buffer, leaving revenue cadence back‑end weighted.
• The company is winding down the CO2 retail grocery business, cutting ~20 roles and targeting approximately $7 million of annual OpEx savings to improve margins and conserve capital.
• The new PX Q650 is a higher‑flow, higher‑ASP product expected to expand gross margins (priced per plant so fewer units but higher effective ASP), with manufacturing for the device planned to begin in H2 2026 to address larger projects.
• Energy Recovery is selecting an overseas manufacturing site by end of H1 2026 and expects to phase production starting Q1 2027, with 2026 capital spend guidance of $3M–$6M to support the footprint expansion and potential cost reduction.
• Management is investing in the wastewater business (recent sales hires); the segment has shown $10M–$12M historical revenues at mid‑high 60% margins, but near‑term growth hinges on adding reference cases and sales ramp timing.

Energy Recovery Trading Up 0.3%

Shares of NASDAQ ERII traded up $0.05 during midday trading on Wednesday, hitting $16.12. 447,654 shares of the company’s stock were exchanged, compared to its average volume of 307,987. The business’s fifty day moving average price is $14.64 and its two-hundred day moving average price is $14.91. The company has a market cap of $853.88 million, a price-to-earnings ratio of 47.41 and a beta of 1.09. Energy Recovery has a 12-month low of $10.86 and a 12-month high of $18.32.

Insider Activity at Energy Recovery

In other news, Director Arve Hanstveit sold 15,000 shares of the firm’s stock in a transaction on Thursday, December 4th. The shares were sold at an average price of $14.97, for a total transaction of $224,550.00. Following the sale, the director owned 640,220 shares in the company, valued at approximately $9,584,093.40. This trade represents a 2.29% decrease in their position. The transaction was disclosed in a filing with the SEC, which can be accessed through this link. Also, insider William Yeung sold 7,271 shares of Energy Recovery stock in a transaction on Wednesday, January 28th. The stock was sold at an average price of $14.55, for a total transaction of $105,793.05. Following the sale, the insider directly owned 90,098 shares of the company’s stock, valued at $1,310,925.90. This represents a 7.47% decrease in their ownership of the stock. Additional details regarding this sale are available in the official SEC disclosure. Over the last quarter, insiders have sold 25,260 shares of company stock valued at $374,213. 3.20% of the stock is currently owned by company insiders.

Institutional Investors Weigh In On Energy Recovery

Several hedge funds have recently added to or reduced their stakes in ERII. Wexford Capital LP purchased a new position in shares of Energy Recovery in the 3rd quarter worth about $27,000. Parallel Advisors LLC bought a new stake in Energy Recovery in the 4th quarter worth approximately $38,000. Tower Research Capital LLC TRC boosted its stake in Energy Recovery by 172.2% in the second quarter. Tower Research Capital LLC TRC now owns 6,011 shares of the industrial products company’s stock worth $77,000 after buying an additional 3,803 shares in the last quarter. PDT Partners LLC bought a new position in Energy Recovery during the second quarter valued at approximately $159,000. Finally, Man Group plc bought a new position in Energy Recovery during the third quarter valued at approximately $162,000. Institutional investors own 83.58% of the company’s stock.

Wall Street Analysts Forecast Growth

A number of research firms recently issued reports on ERII. Loop Capital set a $18.20 price objective on Energy Recovery in a research note on Monday, November 10th. Weiss Ratings reiterated a “hold (c-)” rating on shares of Energy Recovery in a research report on Monday, December 29th. Finally, B. Riley Financial reissued a “neutral” rating on shares of Energy Recovery in a report on Thursday, November 6th. One investment analyst has rated the stock with a Strong Buy rating, one has assigned a Buy rating and two have given a Hold rating to the company. According to MarketBeat.com, the stock currently has a consensus rating of “Moderate Buy” and a consensus target price of $17.07.

Energy Recovery Company Profile

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.