Forensic Analysis · Industrials / Manufacturing / Defense · as of Jun 28, 2026
Energy Recovery, Inc. (ERII)
A forensic read on Energy Recovery, Inc. built from its complete SEC filings — financial-health screens, earnings quality, red flags and a price-aware rating. Reproducible math, not opinion.
B · Sound & dependable
Forensic grade
Safe
Financial health
15.7
Altman Z-score
Clean
Earnings quality
4
Forensic signals
22.1
P / E (ttm)
10.9%
ROE
$455M
Market cap
Energy Recovery, Inc. earns a B (Sound & dependable) forensic quality grade, and its Altman Z-score is 15.7, placing it in the Safe zone. 4 forensic signals were flagged in its latest SEC filings, led by receivables vs revenue.
What the filings flag
207d DSOReceivables vs revenue.Days sales outstanding moved from 161 to 207 days FY2024→FY2025 (receivables +20% vs revenue -7%). Receivables are outrunning sales — a flag for aggressive revenue recognition or slipping collections.
6% of revStock-based comp load.Stock-based compensation ran 6% of revenue and 44% of free cash flow in FY2025 — about $0.14 per diluted share. Heavy — a large slice of 'free cash flow' is really being paid out in stock, so the true owner cash per share is well below the headline.
204% of FCFShareholder returns.Returned $36M to shareholders (buybacks + dividends) in FY2025 — 204% of free cash flow. More than free cash flow generated — and beyond operating cash too, so the extra is coming from debt or cash reserves, which isn't sustainable indefinitely.
12%Return on invested capital.Return on invested capital is 12% and slipping from 16% — around its ~9% cost of capital, so growth is roughly value-neutral — watch the trend.
Key fundamentals
Net Margin17.0%
Debt / Equity0.00x
Free Cash Flow$17.4M
Latest Revenue$135.0M
Return on Equity11.1%
Revenue Growth YoY-6.9%
Go deeper — free with an account
The forensic grade and screens above are free — no account needed. An account adds the full interactive deep-dive on Energy Recovery, Inc.:
🔒The written investment read — what the numbers mean, in plain English
🔒Ask anything about ERII's filings — AI Q&A across the 10-K, 10-Qs & 8-Ks
🔒Interactive valuation — reverse-DCF sliders, Monte Carlo & scenario stress
🔒Calibrated 12-month price forecast, with the math shown