ERII Stock Analysis: Buy, Sell, or Hold?
ERII - Energy Recovery, Inc.
$9.81
-0.06 (-0.61%)
▼
5d:
-3.06%
30d:
-5.94%
90d:
-29.32%
BUY
HIGH Confidence
Analysis Updated: Mar 30, 2026 12:00 AM ET
Earnings: May 06, 2026
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Interactive Price Chart (1 Month)
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Bottom Line:
✅ BUY SIGNAL: ERII appears deeply undervalued. Market expects -12.1% annual earnings decline despite 20% recent earnings growth. Contrarian opportunity at discount to historical valuation.
✅ BUY SIGNAL: ERII appears deeply undervalued. Market expects -12.1% annual earnings decline despite 20% recent earnings growth. Contrarian opportunity at discount to historical valuation.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$28.15
Based on 14.5% avg growth
INTRINSIC VALUE TODAY
$17.48
43.9% Margin of Safety
How this is calculated: We use a Growth Decay Model: starting with analyst consensus growth (adjusted above) and gradually slowing it down to a long-term terminal rate (4%) by Year 5. This provides a more realistic valuation than assuming constant hyper-growth. We then apply a 15.6x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ERII is currently trading at $9.81, which is considered slightly low relative to its 30-day fair value range of $9.02 to $13.24. From a valuation perspective, the stock is trading at a discount (Forward PE: 10.6) compared to its historical average (15.6). Remarkably, the market is currently pricing in an annual earnings decline of 12.1% over the next few years. This pessimistic expectation contrasts with the company's recent 20.1% earnings growth, suggesting potential undervaluation if the company simply maintains stability.
Technical Outlook: Technically, ERII is in a downtrend. Immediate support is located at $9.35, while resistance sits at $10.51.
Market Sentiment: The stock shows a mixed technical setup (45/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $14.00 (+42.7%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, ERII is in a downtrend. Immediate support is located at $9.35, while resistance sits at $10.51.
Market Sentiment: The stock shows a mixed technical setup (45/100), with neutral trendline and momentum signals. Wall Street analysts see significant upside, with an average price target of $14.00 (+42.7%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
SLIGHTLY LOW
Fair Price Range
$9.02 -
$13.24
Company Quality Score
53/100
(HOLD)
Options IV Signal
50th percentile
(NORMAL)
Volume Confirmation
HIGH
Confidence Score
77.7%
All Signals
- BULLISH: Price oversold vs 30-day range
- NEUTRAL: Options fairly priced (IV 50th percentile)
- NEUTRAL: Mixed technical signals (45/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 42.7% below Wall St target ($14.00)
Fair Price Analysis
30-Day Fair Range
$9.02 -
$13.24
Current vs Fair Value
SLIGHTLY LOW
Expected Move (7 Days)
±$0.79
(8.1%)
Support & Resistance Levels
Support Level
$9.35
Resistance Level
$10.51
Current Trend
Downtrend
Technical data as of
Mar 30, 2026
Fundamental Context
Forward P/E (Next Year Est.)
10.59
Wall Street Target
$14.00
(+42.7%)
Revenue Growth (YoY)
-0.3%
Earnings Growth (YoY)
20.1%
Profit Margin
17.0%
Valuation Discount vs History
-12.1% cheaper
PE vs Historical
10.6 vs 15.6
CHEAP
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
-12.1%
(market-implied from PE analysis)
1-Year Target
$8.83
(-10%)
2-Year Target
$7.95
(-19%)
3-Year Target
$7.15
(-27%)
3-Yr Target (if PE normalizes)
(PE: 11→16)
$10.54
(+7%)
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.4, Growth: 42.6%)
$60.02
(+512%)
Base:
(SPY PE: 10.6, Growth: 42.6%)
$28.43
(+190%)
Bear:
(PE: 9.0, Growth: 42.6%)
$24.16
(+146%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (23x PE), but valuation improves significantly next year (11x PE) as earnings recover.
Trailing PE: 22.52 | Current EPS (TTM): $0.42
Bull Case
$20.81
(+106%)
Analyst growth 100.0%, PE expands to 24.8
Base Case
$18.92
(+87%)
Market implied 100.0%, PE stable at 22.5
Bear Case
$6.43
(-36%)
Severe decline -20.0%, PE contracts to 19.2
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
💡
Upside Surprise Potential
If earnings stabilize (0% growth), PE could expand from 10.6 to 15.6
Stabilization Target:
$14.46
(+47.4%)
PE Expansion Potential:
+47.4%
Share & Embed Analysis
Last updated: March 31, 2026 5:34 AM ET
Data refreshes hourly during market hours. Next update: 6:34 AM
Data refreshes hourly during market hours. Next update: 6:34 AM
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Technical Signals Check
Is ERII showing a specific setup today?
Insider Activity (6 Months)
0
Buys
15
Sells
Net
INSIDERS SELLING
Recent Transactions
Arve Hanstveit
SELL
11582 shares
2026-03-06
Arve Hanstveit
SELL
38418 shares
2026-03-05
Natarajan Ramanan
SELL
272 shares
2026-03-05
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