Should you buy Zurn Elkay Water Solutions (ZWS)?
Updated
Zurn Elkay Water Solutions delivers a perfect 4-for-4 earnings beat streak, a maximum Piotroski F-Score of 9/9, and 129% free cash flow conversion — but the stock has already reached its analyst price target with only 0.2% upside remaining, making the current entry a near-zero reward-to-risk proposition.
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Engine methodology range
Range computation requires sufficient peer-comparable data; available for tickers with peer_count ≥3.
What the engine is tracking
| Pillar | Expectation | Trend |
|---|---|---|
Zurn Elkay has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 11.2%, and converts 129% of net income into free cash flow — indicating the business consistently generates more cash than accounting earnings reflect and sets conservative guidance. Earnings | Earnings beat rate remains above 75% over the next 4 quarters, and free cash flow conversion stays above 100% of net income. | →Stable |
| CounterA 4-quarter beat streak at the current valuation may have already been priced in, with the market's lack of upside gap to the analyst target reflecting full pricing of the beat expectation into the stock. | ||
Zurn Elkay achieves the maximum Piotroski F-Score of 9/9, a current ratio of 9.8, and a moat score of 6.9 — indicating a financially healthy water solutions business with strong balance sheet discipline and a recognized competitive advantage in a niche industrial market. Quality breakdown | Piotroski F-Score remains at 8 or above for the next 4 quarters, confirming the financial health advantage is durable. | →Stable |
| CounterA forward P/E of 25.4x and PEG ratio of 1.71 suggest the market already prices the quality premium fully; the high quality score does not by itself provide a margin of safety at current prices. | ||
The current price of $48.83 is within $0.08 of the analyst consensus target of $48.91 — effectively at the price ceiling — producing an asymmetry ratio of 0.03 and a reward-to-risk ratio of just 0.04, making the risk-reward among the worst possible configurations for a new entry. Targets | Analyst consensus price target rises above $55, exceeding the current price by more than 12%, providing a renewed basis for continued accumulation. | →Stable |
| CounterStrong momentum indicators (golden cross, above all moving averages, MACD bullish) suggest near-term price momentum could carry the stock above the analyst target temporarily; the technical setup may support a breakout. | ||
Zurn Elkay has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 11.2%, and converts 129% of net income into free cash flow — indicating the business consistently generates more cash than accounting earnings reflect and sets conservative guidance.
→Stable- Expectation
- Earnings beat rate remains above 75% over the next 4 quarters, and free cash flow conversion stays above 100% of net income.
CounterA 4-quarter beat streak at the current valuation may have already been priced in, with the market's lack of upside gap to the analyst target reflecting full pricing of the beat expectation into the stock.
Zurn Elkay achieves the maximum Piotroski F-Score of 9/9, a current ratio of 9.8, and a moat score of 6.9 — indicating a financially healthy water solutions business with strong balance sheet discipline and a recognized competitive advantage in a niche industrial market.
→Stable- Expectation
- Piotroski F-Score remains at 8 or above for the next 4 quarters, confirming the financial health advantage is durable.
CounterA forward P/E of 25.4x and PEG ratio of 1.71 suggest the market already prices the quality premium fully; the high quality score does not by itself provide a margin of safety at current prices.
The current price of $48.83 is within $0.08 of the analyst consensus target of $48.91 — effectively at the price ceiling — producing an asymmetry ratio of 0.03 and a reward-to-risk ratio of just 0.04, making the risk-reward among the worst possible configurations for a new entry.
→Stable- Expectation
- Analyst consensus price target rises above $55, exceeding the current price by more than 12%, providing a renewed basis for continued accumulation.
CounterStrong momentum indicators (golden cross, above all moving averages, MACD bullish) suggest near-term price momentum could carry the stock above the analyst target temporarily; the technical setup may support a breakout.
▸ Show 1 more pillar▾ Show fewer
Zurn Elkay shows a golden cross technical setup with RSI at 50, MACD bullish, and volume accumulation via a rising on-balance volume indicator — combined with 7.4/10 growth score driven by earnings growth of 9.4% — indicating the business is growing and the technical structure supports the trend.
→Stable- Expectation
- Earnings growth rate remains above 8% annually for the next 2 reported years, and the golden cross setup holds without a death-cross reversal.
CounterAn RSI of 50 is mid-range with no directional commitment; at the analyst target price, buyers and sellers are in equilibrium and a single miss could break the golden cross.
→ Full pillar scorecard with all 4 pillars + per-dimension breakdown
When this thesis breaks
Falsifiable conditions per pillar — any one trip warrants review independent of price action. Engine-derived; not personalized advice.
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Zurn Elkay has beaten earnings estimates in all 4 of the last 4 quarters with an average positive surprise of 11.2%, and converts 129% of net income into free cash flow — indicating the business consistently generates more cash than accounting earnings reflect and sets conservative guidance.
Trip ifEPS surprise falls below 0% in at least 2 of the next 4 quarters, or free cash flow conversion drops below 80% of net income.
- P2Zurn Elkay achieves the maximum Piotroski F-Score of 9/9, a current ratio of 9.8, and a moat score of 6.9 — indicating a financially healthy water solutions business with strong balance sheet discipline and a recognized competitive advantage in a niche industrial market.
Trip ifPiotroski F-Score falls below 7/9 for 2 consecutive quarters.
- P3The current price of $48.83 is within $0.08 of the analyst consensus target of $48.91 — effectively at the price ceiling — producing an asymmetry ratio of 0.03 and a reward-to-risk ratio of just 0.04, making the risk-reward among the worst possible configurations for a new entry.
Trip ifAnalyst consensus price target declines below $43, falling more than 12% below the current $48.91.
- P4Zurn Elkay shows a golden cross technical setup with RSI at 50, MACD bullish, and volume accumulation via a rising on-balance volume indicator — combined with 7.4/10 growth score driven by earnings growth of 9.4% — indicating the business is growing and the technical structure supports the trend.
Trip ifPrice drops below $44, falling more than 9% below the current $48.83, and RSI declines below 35.
How the engine reached this verdict
TrendMatrix's engine output for Zurn Elkay Water Solutions Corp (ZWS) is HOLD_IF_HOLDING with medium conviction, score 5.6/10 at $51.55. None of the engine's positive-conviction paths (C-quality, D-momentum) cleared their gates — the F-path HOLD reflects balanced signals rather than directional conviction.
On the bull side: Strong earnings beat streak (4/4); High-quality business; Strong growth profile. On the bear side: Analyst target reached - limited upside remaining; Near 52-week high (4.0% away). Active engine warnings: V8: Target reached (-5.2% upside), V9 Gate Failed: ASYMMETRY:-0.5=NEGATIVE.
The engine is not issuing fresh-money entry targets at the current verdict. The technical entry zone is around — with a technical stop near $48.78 for existing positions. Asymmetric R:R is -0.20, below the threshold (≥2.0) at which the engine would actively flag fresh capital. The engine's sizing output: 0.5% of portfolio at this asymmetry level (none-conviction tier).
HOLD flips toward BUY_WAIT if reward-to-risk (NEGATIVE) clears AND a co-confirming gate triggers. HOLD flips toward SELL if any of the currently-passing gates drop below threshold OR three or more dimensions fall below 4 simultaneously.
For the full 10-dimension breakdown + V9 gate detail: Why TrendMatrix rates ZWS — 10-dimension breakdown →
Bull case
- ▸Strong earnings beat streak (4/4)
- ▸High-quality business
- ▸Strong growth profile
Bear case
- ▸Analyst target reached - limited upside remaining
- ▸Near 52-week high (4.0% away)