ERII - Energy Recovery: Operating In Vital Markets But Lacking Appealing Value

2024-01-27 00:32:50 ET

Summary

• Energy Recovery operates in the water desalination and wastewater treatment industries, which are expected to experience high demand in the coming decades.
• The company focuses on energy-efficient solutions and has significant growth opportunities in the Middle East and North Africa markets.
• ERII's recent earnings showed strong revenue growth and increasing margins, but the high valuation and potential for a market pullback pose risks.

Investment Rundown

Energy Recovery, Inc. ( ERII ) works with desalinating water and treating wastewater as well. These might not sound like high-growth industries but the coming decade will make fresh and clean water an even more scarce commodity, unfortunately. This will lead to the services and products that ERII makes being in even higher demand and be a leading tailwind for revenue growth along with earnings expansion I think....

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