A new SEC filing reveals that David W Moon, President and CEO at Energy Recovery ERII, made a notable insider purchase on May 15,.
What Happened: A Form 4 filing with the U.S. Securities and Exchange Commission on Thursday unveiled that Moon made a notable purchase of 4,200 shares of Energy Recovery, valuing at $51,240.
At Friday morning, Energy Recovery shares are up by 4.23%, trading at $12.8.
All You Need to Know About Energy Recovery
Energy Recovery Inc is an engineering-driven technology company. It is engaged in engineering, designing, manufacturing and supplying solutions that make industrial processes more efficient and sustainable. The company operates in three segments, Water, Emerging Technologies and Corporate. It offers energy recovery devices (ERDs) and pumps as well as related products and services to the global reverse osmosis desalination market. The company derives a majority of the revenue from the Water segment. Geographically, the company operates in the U.S. and other international countries.
Energy Recovery: Delving into Financials
Decline in Revenue: Over the 3 months period, Energy Recovery faced challenges, resulting in a decline of approximately -33.29% in revenue growth as of 31 March, 2025. This signifies a reduction in the company’s top-line earnings. When compared to others in the Industrials sector, the company faces challenges, achieving a growth rate lower than the average among peers.
Key Insights into Profitability Metrics:
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Gross Margin: The company excels with a remarkable gross margin of 55.28%, indicating superior cost efficiency and profitability compared to its industry peers.
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Earnings per Share (EPS): Energy Recovery’s EPS is below the industry average. The company faced challenges with a current EPS of -0.18. This suggests a potential decline in earnings.
Debt Management: Energy Recovery’s debt-to-equity ratio is below the industry average at 0.06, reflecting a lower dependency on debt financing and a more conservative financial approach.
Financial Valuation:
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Price to Earnings (P/E) Ratio: Energy Recovery’s current Price to Earnings (P/E) ratio of 34.11 is higher than the industry average, indicating that the stock may be overvalued according to market sentiment.
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Price to Sales (P/S) Ratio: With a higher-than-average P/S ratio of 4.99, Energy Recovery’s stock is perceived as being overvalued in the market, particularly in relation to sales performance.
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EV/EBITDA Analysis (Enterprise Value to its Earnings Before Interest, Taxes, Depreciation & Amortization): At 22.19, the company’s EV/EBITDA ratio outperforms industry norms, reflecting positive market perception. This positioning indicates optimistic expectations for the company’s future performance.
Market Capitalization: With restricted market capitalization, the company is positioned below industry averages. This reflects a smaller scale relative to peers.
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Unmasking the Significance of Insider Transactions
While insider transactions should not be the sole basis for making investment decisions, they can play a significant role in an investor’s decision-making process.
Within the legal framework, an “insider” is defined as any officer, director, or beneficial owner holding more than ten percent of a company’s equity securities as per Section 12 of the Securities Exchange Act of 1934. This includes executives in the c-suite and major hedge funds. These insiders are mandated to disclose their transactions through a Form 4 filing, to be submitted within two business days of the transaction.
The initiation of a new purchase by a company insider serves as a strong indication that they expect the stock to rise.
However, insider sells may not always signal a bearish view and can be influenced by various factors.
The Insider’s Guide to Important Transaction Codes
Investors prefer focusing on transactions that take place in the open market, indicated in Table I of the Form 4 filing. A P in Box 3 indicates a purchase, while S indicates a sale. Transaction code C indicates the conversion of an option, and transaction code A indicates grant, award or other acquisition of securities from the company.
Check Out The Full List Of Energy Recovery’s Insider Trades.
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This article was generated by Benzinga’s automated content engine and reviewed by an editor.
