Energy Recovery (NASDAQ:ERII) Posts Quarterly Earnings Results, Misses Expectations By $0.14 EPS

Energy Recovery (NASDAQ:ERII) issued its earnings results on Wednesday. The industrial products company reported $0.53 earnings per share for the quarter, missing the consensus estimate of $0.67 by ($0.14), FiscalAI reports. The firm had revenue of $66.59 million during the quarter, compared to analysts’ expectations of $82.59 million. Energy Recovery had a net margin of 14.44% and a return on equity of 10.09%. Energy Recovery updated its FY 2026 guidance to 0.500-0.700 EPS.

Here are the key takeaways from Energy Recovery’s conference call:

• Management says the business hit an “air pocket” as several large desalination projects delayed, and 2026 guidance assumes three megaprojects (~$25M–$30M) slip into 2027 plus an additional $15M–$25M buffer, leaving revenue cadence back?end weighted.
• The company is winding down the CO2 retail grocery business, cutting ~20 roles and targeting approximately $7 million of annual OpEx savings to improve margins and conserve capital.
• The new PX Q650 is a higher?flow, higher?ASP product expected to expand gross margins (priced per plant so fewer units but higher effective ASP), with manufacturing for the device planned to begin in H2 2026 to address larger projects.
• Energy Recovery is selecting an overseas manufacturing site by end of H1 2026 and expects to phase production starting Q1 2027, with 2026 capital spend guidance of $3M–$6M to support the footprint expansion and potential cost reduction.
• Management is investing in the wastewater business (recent sales hires); the segment has shown $10M–$12M historical revenues at mid?high 60% margins, but near?term growth hinges on adding reference cases and sales ramp timing.

Energy Recovery Price Performance

NASDAQ ERII opened at $16.12 on Thursday. Energy Recovery has a 1-year low of $10.86 and a 1-year high of $18.32. The company has a market capitalization of $853.88 million, a P/E ratio of 47.41 and a beta of 1.09. The business has a 50 day moving average price of $14.68 and a 200 day moving average price of $14.92.

Insiders Place Their Bets

In related news, insider William Yeung sold 7,271 shares of the business’s stock in a transaction dated Wednesday, January 28th. The shares were sold at an average price of $14.55, for a total value of $105,793.05. Following the sale, the insider directly owned 90,098 shares in the company, valued at $1,310,925.90. The trade was a 7.47% decrease in their position. The transaction was disclosed in a filing with the Securities & Exchange Commission, which is available at this hyperlink. Also, Director Arve Hanstveit sold 15,000 shares of the stock in a transaction dated Thursday, December 4th. The shares were sold at an average price of $14.97, for a total transaction of $224,550.00. Following the completion of the sale, the director directly owned 640,220 shares in the company, valued at approximately $9,584,093.40. The trade was a 2.29% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last quarter, insiders have sold 25,260 shares of company stock worth $374,213. 3.20% of the stock is owned by company insiders.

Institutional Trading of Energy Recovery

Institutional investors and hedge funds have recently modified their holdings of the business. Jacobs Levy Equity Management Inc. acquired a new stake in shares of Energy Recovery during the first quarter valued at $341,000. Russell Investments Group Ltd. lifted its holdings in Energy Recovery by 167.8% in the 2nd quarter. Russell Investments Group Ltd. now owns 23,299 shares of the industrial products company’s stock valued at $298,000 after purchasing an additional 14,598 shares in the last quarter. Royal Bank of Canada lifted its holdings in Energy Recovery by 43.1% in the 1st quarter. Royal Bank of Canada now owns 16,257 shares of the industrial products company’s stock valued at $258,000 after purchasing an additional 4,899 shares in the last quarter. State of Wyoming grew its holdings in shares of Energy Recovery by 31.1% during the second quarter. State of Wyoming now owns 19,486 shares of the industrial products company’s stock worth $249,000 after buying an additional 4,622 shares in the last quarter. Finally, State Board of Administration of Florida Retirement System grew its holdings in shares of Energy Recovery by 14.3% during the fourth quarter. State Board of Administration of Florida Retirement System now owns 18,191 shares of the industrial products company’s stock worth $245,000 after buying an additional 2,274 shares in the last quarter. Hedge funds and other institutional investors own 83.58% of the company’s stock.

Analyst Upgrades and Downgrades

A number of brokerages have weighed in on ERII. Weiss Ratings reaffirmed a “hold (c-)” rating on shares of Energy Recovery in a report on Monday, December 29th. Loop Capital set a $18.20 price objective on Energy Recovery in a report on Monday, November 10th. Finally, B. Riley Financial reiterated a “neutral” rating on shares of Energy Recovery in a research report on Thursday, November 6th. One investment analyst has rated the stock with a Strong Buy rating, one has given a Buy rating and two have given a Hold rating to the company. Based on data from MarketBeat.com, the company currently has an average rating of “Moderate Buy” and a consensus target price of $17.07.

Energy Recovery Company Profile

Energy Recovery, Inc (NASDAQ: ERII) is an energy technology company specializing in the design and manufacture of high-efficiency devices that capture and repurpose energy in fluid-handling applications. The company’s core offering, the Pressure Exchanger® (PX®) device, enables seawater reverse osmosis (SWRO) desalination plants to recover and reuse hydraulic energy that would otherwise be lost during brine discharge. By integrating PX technology into desalination processes, Energy Recovery helps operators significantly reduce the energy consumption and operating costs of producing fresh water from seawater or brackish sources.

In addition to desalination solutions, Energy Recovery has expanded its portfolio to serve the oil and gas sector through turbocharger systems that improve the energy efficiency of hydraulic fracturing operations.