Franklin Electric carries an exceptionally strong balance sheet — maximum financial health scores, a current ratio of 9.0, and low leverage — and has beaten estimates in three of the last four quarters; however, the Water Systems segment accounts for roughly 60% of revenue concentrating both revenue and supplier risk in a single area, the stock has risen above its analyst take-profit target leaving no upside buffer, and free cash flow is running at only about 59% of net income, below what a high-quality earnings profile would typically imply.
Thesis pillars
- Exceptional Balance Sheet Financial Health↓Deteriorating
- Water Systems Segment Revenue Concentration↓Deteriorating
- Earnings Mostly Positive Beat Record↑Improving
- +1 more pillar — see the Why tab for full reasoning
Pillars as of Jul 3, 2026, based on the 10-K filed Feb 20, 2026· older than 90 days
Franklin Electric Co., Inc. (FELE) Stock Analysis
Momentum Cont setup
Industrials · Specialty Industrial Machinery
Hold if already holding. Not a fresh buy at $100.96, but acceptable to hold if already in. Reasons: Concentration risk — Product: Water Systems segment (60.0%); Concentration risk — Supplier: single or limited number of suppliers.
Franklin Electric Co. designs, manufactures and distributes water and fuel pumping systems across three segments — Water Systems (~60% of revenue), Energy Systems, and Distribution — generating approximately $2.1 billion in 2025 revenue. Products are sold worldwide to specialty... Read more
Hold if already holding. Not a fresh buy at $100.96, but acceptable to hold if already in. Reasons: Concentration risk — Product: Water Systems segment (60.0%); Concentration risk — Supplier: single or limited number of suppliers. Chart setup: Trend continuation, RSI 53, MACD bullish. Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Score 6.2/10, moderate confidence.
Passes 6/7 gates (positive momentum, clean insider activity, no SEC red flags, earnings proximity 103d clear, semi cycle peak clear, materials cycle peak clear). Fails on favorable risk/reward ratio. Suitability: aggressive.
About Franklin Electric Co., Inc.
About Franklin Electric Co., Inc.
Water Systems generated approximately 60 percent of Franklin Electric's $2.1 billion 2025 revenue, with Energy Systems and Distribution comprising the remainder. The company held a consolidated order backlog of $139.1 million at February 4, 2026, with Water Systems alone accounting for $99.0 million. Franklin Electric employed approximately 6,500 people at December 31, 2025 and maintains named international operations across Europe, South Africa, Brazil, Mexico, India, China, Turkey, Canada, and Argentina.
Franklin Electric sells through employee sales forces and independent manufacturing representatives to specialty distributors, OEMs, industrial and petroleum equipment distributors, and major oil and utility companies. Water Systems serves residential, agricultural, municipal, and industrial groundwater and wastewater pumping applications; Energy Systems covers fuel containment, piping, vapor recovery, and electronic monitoring between the tank and the dispenser. The Distribution segment operates the Headwater Companies, serving professional water well contractors within the U.S. Principal raw materials include coil and bar steel, stainless steel, copper wire, and aluminum ingot, most available from multiple sources. Named competitors in specialty water products are Grundfos Management A/S, Pentair, Inc., and Xylem, Inc.; in petroleum equipment, Vontier Corporation and Dover Corporation. Water Systems also generates approximately 25 to 30 percent of segment revenue in developing markets, where the absence of municipal water infrastructure may support long-run volume growth.
Show full overview
Supply chain exposure is disclosed explicitly in both the Business and Risk Factors sections. The 10-K acknowledges dependence on a single or limited number of suppliers for certain materials and components, with no alternative sourcing plan disclosed. Compounding this, the U.S. government implemented tariffs on imported steel and aluminum — two principal raw materials — and the filing notes potential retaliatory tariff escalation. The company does not engage in commodity hedging, meaning margin exposure to raw material cost swings passes directly to operating results if customers cannot absorb price increases.
See also: Industrials · Specialty Industrial Machinery
From Franklin Electric Co., Inc.'s most recent 10-K filing, extracted June 10, 2026.
Recent developments
updated Oct 28, 2026Recent Developments — Franklin Electric Co., Inc.
Latest news
- NEWS Franklin Electric (FELE) to Acquire Challenge Pumps Holdings for $181M Cash - GuruFocus — GuruFocus Oct 28, 2026 neutral
- NEWS Franklin Electric to buy Challenge Pumps in $181M deal, eyes EPS accretion in 2027 (FELE:NASDAQ) - Seeking Alpha — Seeking Alpha Oct 28, 2026 positive
- NEWS Franklin Electric to Acquire Challenge Pumps to Expand Mine Dewatering and Water Management Capabilities - Quiver Quanti — Quiver Quantitative Oct 27, 2026 positive
- NEWS Franklin Electric (FELE) Set to Announce Earnings on Wednesday - MarketBeat — MarketBeat Oct 21, 2026 neutral
- NEWS Is Franklin Electric (FELE) A Bargain After Its Leadership Change? - Simply Wall Street — Simply Wall Street Oct 20, 2026 neutral
Latest item Oct 28, 2026 · Generated 2026-11-04T11:34:30Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Concentration Risks(10-K Item 1A)
- HIGHProductWater Systems segment60%10-K Item 1: 'Water Systems contributed about 60 percent of the Company's total revenue in 2025'
- HIGHSuppliersingle or limited number of suppliers10-K Item 1A: 'The Company is dependent on a single or limited number of suppliers for some materials or components required in the manufacture of its products'
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results. How we score · Editorial policy
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Rating Breakdown
1 floor-breaker
Technicals below the gate floor. Component breakdown shows what dragged the score down.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Hold if already holding. Not a fresh buy at $100.96, but acceptable to hold if already in. Reasons: Concentration risk — Product: Water Systems segment (60.0%); Concentration risk — Supplier: single or limited number of suppliers. Chart setup: Trend continuation, RSI 53, MACD bullish. Multiple concerning factors. Consider reducing position. | News modifier +2 (SELL_IF_HOLDING → HOLD_IF_HOLDING) Analyst target $108.38 (+7.3%), stop $94.70 (−6.6%), A.R:R 1.0:1. Score 6.2/10, moderate confidence.
Analyst target: $108.38 (+7.3% upside). Analyst target $108.38 (+7.3%), stop $94.70 (−6.6%), A.R:R 1.0:1. Stop-loss: $94.70.
Concentration risk — Product: Water Systems segment (60.0%); Concentration risk — Supplier: single or limited number of suppliers; Thin upside margin: 7.3%.
Franklin Electric Co., Inc. trades at a P/E of 22.7 (forward 19.0). TrendMatrix value score: 6.0/10. Verdict: Hold.
11 analysts rate FELE, with a consensus score of 3.9/5. 4 analysts publish price targets averaging $128.
What does Franklin Electric Co., Inc. do?Franklin Electric Co. designs, manufactures and distributes water and fuel pumping systems across three segments —...
Franklin Electric Co. designs, manufactures and distributes water and fuel pumping systems across three segments — Water Systems (~60% of revenue), Energy Systems, and Distribution — generating approximately $2.1 billion in 2025 revenue. Products are sold worldwide to specialty distributors, OEMs, and petroleum equipment distributors through an employee sales force and independent representatives, with roughly 6,500 employees at December 31, 2025.