Energy Recovery screens as cheap and fast-growing with insiders buying, but a confirmed death cross, leverage concerns, consecutive earnings misses, and a thin risk/reward ratio at the spot price all argue for caution.
Thesis pillars
- Thin Risk Reward Failed Asymmetry Gate↑Improving
- Attractive Valuation Strong Growth↓Deteriorating
- Confirmed Downtrend Death Cross↑Improving
- +2 more pillars — see the Why tab for full reasoning
Energy Recovery, Inc. (ERII) Stock Analysis
Industrials · Pollution & Treatment Controls
Hold if already holding. Not a fresh buy at $7.99, but acceptable to hold if already in. Reasons: Target reached (-0.8% upside); Market cap $399M below $400M minimum.
Energy Recovery, Inc. designs and manufactures pressure exchanger technology that recovers wasted energy in industrial fluid-flow processes, best known as the PX® energy recovery device that reduces energy use by up to 60% in seawater reverse osmosis desalination plants. The... Read more
Hold if already holding. Not a fresh buy at $7.99, but acceptable to hold if already in. Reasons: Target reached (-0.8% upside); Market cap $399M below $400M minimum. Chart setup: No clear chart pattern; technical signals are mixed. Market cap $399M below $400M minimum. Not in investable universe. Score 6.2/10, moderate confidence.
Passes 6/9 gates (clean insider activity, no SEC red flags, news events none recent, earnings proximity 82d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum and favorable risk/reward ratio and death cross (50MA < 200MA). Suitability: speculative.
About Energy Recovery, Inc.
About Energy Recovery, Inc.
Energy Recovery's pressure exchanger technology powers seawater reverse osmosis desalination plants producing over 43 million cubic meters of water per day worldwide, reducing energy use in those plants by up to 60% through its flagship PX device. The company sells through three Water-segment channels — Megaproject, original equipment manufacturer, and aftermarket — with a majority of water treatment revenue coming from Megaproject customers building large-scale plants with capacities above 50,000 cubic meters per day.
Energy Recovery's core PX Pressure Exchanger family serves seawater and brackish desalination as well as growing wastewater treatment markets, complemented by its Ultra High-Pressure PX for zero- and minimum-liquid-discharge applications and hydraulic turbochargers for lower-cost brackish and inter-stage boost uses. Demand depends primarily on continued construction of new large-scale desalination plants and wastewater facilities, particularly in Gulf Cooperation Council countries, China, Taiwan, and India, with typical Megaproject sales cycles running up to 36 months from tender to shipment. The company manufactures most products in its San Leandro and Tracy, California facilities, relying on a limited number of suppliers for vessel housings, stainless steel ports, and alumina powder. In February 2026, Energy Recovery decided to wind down its CO2 retail grocery refrigeration business within its Emerging Technologies segment following a fundamental change in that business's outlook.
Show full overview
Energy Recovery's revenue base leans on a small number of large, discretionary projects: because a majority of water-treatment revenue comes from Megaproject customers whose sales cycles can exceed 36 months, the timing of even one plant's tender-to-shipment schedule can swing annual results, a risk compounded by holdback provisions that can delay up to 10% of contract payments for as long as 24 months after shipment. That project-timing exposure sits alongside a supply-side dependency: the 10-K states the company relies on a limited number of suppliers for vessel housings, stainless steel ports, and alumina powder, components central to the PX ceramic cartridge, without long-term supply agreements to guarantee capacity.
See also: Industrials · Pollution & Treatment Controls
From Energy Recovery, Inc.'s most recent 10-K filing, extracted July 6, 2026.
Recent developments
updated 2026-08-14Recent Developments — Energy Recovery, Inc.
Latest news
- NEWS Energy Recovery (NASDAQ:ERII) Misses Q2 CY2026 Revenue Estimates, Stock Drops - StockStory — StockStory negative
- NEWS Energy Recovery (NASDAQ:ERII) Misses Q2 CY2026 Revenue Estimates, Stock Drops - Yahoo Finance — Yahoo Finance negative
- NEWS Energy Recovery (NASDAQ:ERII) Misses Q2 CY2026 Revenue Estimates, Stock Drops - finance.yahoo.com — finance.yahoo.com negative
- NEWS Energy Recovery (NASDAQ:ERII) Misses Q2 CY2026 Revenue Estimates, Stock Drops - The Globe and Mail — The Globe and Mail negative
- NEWS Energy Recovery (NASDAQ:ERII) Misses Q2 CY2026 Revenue Estimates, Stock Drops - FinancialContent — FinancialContent negative
Generated 2026-08-14T17:32:41Z.
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Rating Breakdown
2 floor-breakers·1 ceiling hit
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price action weak — below key moving averages, no momentum carry. Needs a base before trend-continuation setups apply.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $7.99, but acceptable to hold if already in. Reasons: Target reached (-0.8% upside); Market cap $399M below $400M minimum. Chart setup: No clear chart pattern; technical signals are mixed. Market cap $399M below $400M minimum. Not in investable universe. Target $9.15 (+14.5%), stop $7.44 (−7.4%), A.R:R -0.1:1. Score 6.2/10, moderate confidence.
Take-profit target: $9.15 (-0.8% upside). Target $9.15 (+14.5%), stop $7.44 (−7.4%), A.R:R -0.1:1. Stop-loss: $7.44.
Target reached (-0.8% upside); Market cap $399M below $400M minimum.
Energy Recovery, Inc. trades at a P/E of 30.1 (forward 16.1). TrendMatrix value score: 6.4/10. Verdict: Hold.
10 analysts cover ERII with a consensus score of 3.8/5. Average price target: $9.
What does Energy Recovery, Inc. do?Energy Recovery, Inc. designs and manufactures pressure exchanger technology that recovers wasted energy in industrial...
Energy Recovery, Inc. designs and manufactures pressure exchanger technology that recovers wasted energy in industrial fluid-flow processes, best known as the PX® energy recovery device that reduces energy use by up to 60% in seawater reverse osmosis desalination plants. The company sells to megaproject developers, OEMs, and aftermarket customers across its Water segment (desalination and wastewater treatment), and is winding down the CO2 retail grocery refrigeration business within its Emerging Technologies segment as of February 2026.