ERII Stock Analysis: Buy, Sell, or Hold?
ERII - Energy Recovery, Inc.
$14.59
-0.19 (-1.29%)
▼
BUY
MODERATE Confidence
Last Updated: January 30, 2026
Earnings: Feb 25, 2026
24d
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Interactive Price Chart (1 Month)
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Bottom Line:
💡 BUY OPPORTUNITY: ERII shows positive signals but monitor for confirmation. Market pricing in 1.4% growth. Moderate conviction.
💡 BUY OPPORTUNITY: ERII shows positive signals but monitor for confirmation. Market pricing in 1.4% growth. Moderate conviction.
Long-Term Wealth Forecast (2031)
Based on Analyst Consensus Growth & Historical Valuation
0% (Stagnation)
50% (Hyper Growth)
EST. PRICE IN 2031
$22.62
Based on 9.9% avg growth
INTRINSIC VALUE TODAY
$14.05
Trading above fair value
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 17.1x Exit PE.
In-depth Analysis How we analyze
Valuation Analysis: ERII is currently trading at $14.59, which is considered extended relative to its 30-day fair value range of $13.85 to $14.54. The stock's valuation (Forward PE: 17.8) is in line with its historical norms (17.1). At these levels, the market is pricing in 1.4% annual earnings growth.
Technical Outlook: Technically, ERII is in a downtrend. The price is approaching resistance at $14.96. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: ERII has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. In the options market, Implied Volatility is low (16th percentile), suggesting options premiums are relatively cheap. This makes it an attractive time for long options strategies if you have a directional bias. Wall Street analysts see significant upside, with an average price target of $18.24 (+23.4%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Technical Outlook: Technically, ERII is in a downtrend. The price is approaching resistance at $14.96. A breakout above this level would be a bullish signal, while rejection here could lead to consolidation.
Market Sentiment: ERII has a strong technical setup (75/100), with favorable trendlines, momentum, and price action for short-term traders. In the options market, Implied Volatility is low (16th percentile), suggesting options premiums are relatively cheap. This makes it an attractive time for long options strategies if you have a directional bias. Wall Street analysts see significant upside, with an average price target of $18.24 (+23.4%). Combining these factors, the current setup offers a favorable risk/reward ratio for buyers.
Quick Decision Summary
Current Position
EXTENDED
Fair Price Range
$13.85 -
$14.54
Company Quality Score
65/100
(BUY)
Options IV Signal
16th percentile
(LOW)
Volume Confirmation
HIGH
Confidence Score
71.9%
All Signals
- BEARISH: Price extended above range
- BULLISH: Options cheap (IV 16th percentile)
- BULLISH: Strong technical setup (75/100)
- BULLISH: High volume confirmation
- BULLISH: Trading 23.4% below Wall St target ($18.24)
- BULLISH: Expecting earnings turnaround to 1.4% growth with -17.1% revenue growth
Fair Price Analysis
30-Day Fair Range
$13.85 -
$14.54
Current vs Fair Value
EXTENDED
Expected Move (7 Days)
±$1.35
(9.3%)
Support & Resistance Levels
Support Level
$13.90
Resistance Level
$14.96
Current Trend
Downtrend
Fundamental Context
Forward P/E (Next Year Est.)
17.81
Wall Street Target
$18.24
(+23.4%)
Revenue Growth (YoY)
-17.1%
Earnings Growth (YoY)
-52.3%
Profit Margin
14.4%
Valuation Premium vs History
+1.4% premium
PE vs Historical
17.8 vs 17.1
FAIR
Market-Implied Price Targets
If current PE multiple persists
Implied Growth (YoY):
+1.4%
(market-implied from PE analysis)
1-Year Target
$14.99
(+1%)
2-Year Target
$15.20
(+3%)
3-Year Target
$15.41
(+4%)
3-Yr Target (if PE normalizes)
(PE: 18→17)
PE COMPRESSION
$14.80
(+0%)
Earnings growth offset by PE compression
3-Year Scenarios
Using analyst projected EPS growth
Bull:
(PE: 22.3, Growth: 15.7%)
$28.65
(+94%)
Base:
(SPY PE: 17.8, Growth: 15.7%)
$22.88
(+55%)
Bear:
(PE: 15.1, Growth: 15.7%)
$19.45
(+32%)
📈
Valuation based on Current Earnings
RECOVERY PLAY: Stock looks expensive now (43x PE), but valuation improves significantly next year (18x PE) as earnings recover.
Trailing PE: 43.09 | Current EPS (TTM): $0.34
Bull Case
$32.23
(+121%)
Analyst growth 100.0%, PE expands to 47.4
Base Case
$29.30
(+101%)
Market implied 100.0%, PE stable at 43.1
Bear Case
$9.96
(-32%)
Severe decline -20.0%, PE contracts to 36.6
These are projections based on PE multiples and EPS growth scenarios, not predictions. Actual results may vary significantly.
Last updated: January 31, 2026 11:07 AM ET
Data refreshes hourly during market hours. Next update: 12:07 PM
Data refreshes hourly during market hours. Next update: 12:07 PM
🔥 Top Stocks Breaking Out Now
| Ticker | Score | Recommendation | Change % |
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Technical Signals Check
Is ERII showing a specific setup today?
Insider Activity (6 Months)
0
Buys
5
Sells
Net
INSIDERS SELLING
Recent Transactions
William Yeung
SELL
3530 shares
2025-10-20
William Yeung
SELL
3530 shares
2025-10-16
William Yeung
SELL
3567 shares
2025-10-03
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