ERII (ERII): a likely value trap?

Avoid — the desalination "megaprojects" that drive its revenue have stalled due to Middle East conflict, and management won't even give a forecast anymore.

⚠ TRAP Fundamentals52/100

Down 74% from its all-time high of $29.93 — now $7.82

Why ERII dropped

Energy Recovery makes equipment mostly used in big Middle East desalination plants, and those projects have been delayed by the Israel-Iran conflict; Q2 2026 revenue collapsed 57% year-over-year to $12 million, badly missing estimates, and management withdrew its full-year guidance for a second straight quarter.

Fwd P/E 16.1Op margin -41.9%Rev growth -57.2%Debt/equity 4.8%Analyst upside 19.4%

How this scored 52/100

✅ Passes all 4 hard checks — profitable, cash-generative, and financially survivable.

✅ Makes money Net profit margin 12.7%

✅ Generates cash Free cash flow $36M

✅ Not drowning in debt Debt/equity 4.8% (limit 200%)

✅ Can pay its bills Current ratio 8.1 (needs 1+)

Bar length shows how much each metric is worth — a 10-point metric is twice as wide as a 5-point one. Hover any row for what it means.

Profitability Does it actually make money? 7/25

Operating margin -41.9% 0/9

Net profit margin 12.7% 5/8

Return on equity 8.6% 1/8

Growth Is it getting bigger, or dying? 10/25

Revenue growth -57.2% 0/9

Earnings growth unknown 2/8

Expected profit change 86.5% 8/8

Value Is it cheap right now? 10/25

Forward P/E 16.1 7/10

PEG ratio 3.3 0/8

Analyst target upside 19.4% 2/7

Balance sheet Will it survive? 25/25

Debt / equity 4.8% 10/10

Current ratio 8.1 8/8

Free cash flow $36M 7/7

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Analysis generated by SmartStonks's AI from public fundamentals and news, first flagged 2026-08-14. Research only — not financial advice.