Value
4.4/10data confidence 100%| Component | Sub-score |
|---|---|
| P/E | 4.1 |
| P/S | 7.1 |
| EV/EBITDA | 0.8 |
| Fwd P/E | 5.0 |
| PEG | 4.8 |
| Analyst target | 4.0 |
- ▸Forward P/E: 25.0x
- ▸PEG: 1.67
ZWS · Why this verdict
Why Zurn Elkay Water Solutions (ZWS) is rated HOLD
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictHOLD
Overall score6.2/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
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.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| 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. | ↓Deteriorating |
| 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 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. Momentum breakdown | Earnings growth rate remains above 8% annually for the next 2 reported years, and the golden cross setup holds without a death-cross reversal. | ↓Deteriorating |
| 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. | ||
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.
↓DeterioratingEarnings
- 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.
→StableQuality breakdown
- 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.
→StableTargets
- 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.
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.
↓DeterioratingMomentum breakdown
- 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.
Per-dimension breakdown
Quality
7.7/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.6 |
| ROA | 5.8 |
| Gross margin | 5.8 |
| Op margin | 10.0 |
| Net margin | 7.7 |
| Current ratio | 9.9 |
| FCF quality | 7.8 |
| Moat | 6.9 |
| Piotroski F | 10.0 |
- ▸Strong margins: 15%
- ▸Strong Piotroski F-Score: 9/9
- ▸High-quality business
Growth
7.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 5.1 |
| EPS growth | 10.0 |
Momentum
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 1.0 |
| MA position | 9.0 |
| Volume | 0.0 |
- ▸Volume distribution (falling OBV)
- ▸Above 200-day MA
Sentiment
6.3/10data confidence 100%| Component | Sub-score |
|---|---|
| Analyst rating | 7.0 |
| Price target | 6.7 |
| erm sentiment | 5.0 |
- ▸Light analyst coverage (10.0) — signal dampened
Insider
7.3/10data confidence 75%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 10.0 |
| notable moves | 7.0 |
- ▸Insider selling (low materiality) — $1,325,500 (0.016% of mkt cap)
- ▸Institutions accumulating
Peer rank
4.6/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 3.8 |
| quality rank | 5.8 |
| growth rank | 4.0 |
Technical
5.0/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 2.4 |
| support resistance | 3.9 |
| 52w position | 8.8 |
| gap | 5.0 |
Risk (lower is worse)
6.4/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 7.7 |
| days to cover | 5.5 |
| volatility | 4.6 |
| put call | 5.5 |
| implied vol | 4.3 |
| beta | 8.3 |
| debt equity | 8.7 |
- ▸Concentration risks: 2 MED (10-K Item 1A)
Catalyst
6.7/10data confidence 100%| Component | Sub-score |
|---|---|
| erm | 5.0 |
| earnings history | 10.0 |
| earnings timing | 5.0 |
| surprise avg | 6.7 |
| dividend safety | 6.8 |
- ▸Perfect beat streak: 4Q
How the verdict was assembled
Engine trigger
Maintain position. Not compelling to add more.
Engine technical detail
verdict_path:
L4:PATH_F_HOLDPassed (6)
- MOMENTUM:5.0>=4.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:77d clear
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (1)
- ASYMMETRY:-0.2=NEGATIVE
Warning (2)
- MOMENTUM:5.0<5.5 (soft — BUY_NOW allowed but watch)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
-0.25
Upside
-2.4%
Downside
9.6%
Sizing output
AVOID
SetupBreakout — Golden cross, above all MAs, RSI 69, MACD bullish
EdgeNo clear edge — No clear edge identified
SuitabilityModerate — Balanced profile
Investment implication
None of the engine's positive-conviction paths (C-quality, D-momentum) triggered — the F-path HOLD reflects balanced signals. Strongest-cleared gate: MOMENTUM:5.0>=4.5. Top dim: Quality at 7.7; weakest: Value at 4.4. No conviction either direction.
The strongest dimensions are Quality at 7.7, Growth at 7.5, and Insider at 7.3; the weakest are Value at 4.4, Peer rank at 4.6, and Technical at 5.0. The V9 engine flagged 1 failed gate with 2 warnings, producing an asymmetric reward-to-risk of -0.25 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1Perfect Earnings Beat Fcf Conversion
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.
- P2Maximum Piotroski Score Quality
Trip ifPiotroski F-Score falls below 7/9 for 2 consecutive quarters.
- P3Analyst Target Exhausted Zero Upside
Trip ifAnalyst consensus price target declines below $43, falling more than 12% below the current $48.91.
- P4Strong Growth Momentum Setup
Trip ifPrice drops below $44, falling more than 9% below the current $48.83, and RSI declines below 35.