Energy Recovery (NASDAQ:ERII) Releases Quarterly Earnings Results

Key Points

• Leadership and guidance risk: CEO David Moon plans to retire and the CFO resigned with an interim CFO named, and the company has withdrawn 2026 financial guidance citing exposure to the Middle East conflict, creating near-term execution uncertainty.
• PX Q650 commercial rollout: The newly launched PX Q650 secured its first commercial order and early design wins, with management expecting a multi-year transition and the Q650 to become the primary product around 2028.
• Mixed quarterly results and insider selling: Energy Recovery missed EPS estimates at ($0.11) vs. ($0.10) expected but beat revenue at $9.71M vs. $8.37M, while insiders sold 240,811 shares in the last 90 days, signalling mixed financial and governance signals.

Energy Recovery (NASDAQ:ERII - Get Free Report) announced its earnings results on Wednesday. The industrial products company reported ($0.11) earnings per share (EPS) for the quarter, missing the consensus estimate of ($0.10) by ($0.01), FiscalAI reports. Energy Recovery had a net margin of 17.01% and a return on equity of 11.92%. The business had revenue of $9.71 million for the quarter, compared to analysts' expectations of $8.37 million.

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

• PX Q650 launched in March, has its first commercial order and early customer design wins, and management expects a multi-year transition with the Q650 becoming primary around 2028.
• CEO David Moon announced his intention to retire and the CFO resigned, with Aidan Ryan named interim CFO, creating near-term leadership transition risk.
• The company has withdrawn 2026 financial guidance due to exposure to the Middle East conflict and uncertainty, though it is building inventory to serve customers when projects resume.
• Management expects most Middle East impacts to be short-term delays rather than permanent demand loss and is watching growth opportunities in China, South America, and potentially Texas.
• Company remains focused on cost discipline and manufacturing transformation, targeting overseas Q400 assembly by Q1 and ongoing factory productivity initiatives to lower costs over time.

Energy Recovery Stock Performance

Shares of NASDAQ ERII traded up $0.30 during mid-day trading on Wednesday, hitting $11.61. The stock had a trading volume of 726,044 shares, compared to its average volume of 875,104. The company has a 50 day moving average of $10.75 and a two-hundred day moving average of $13.45. Energy Recovery has a twelve month low of $9.35 and a twelve month high of $18.32. The firm has a market cap of $603.72 million, a PE ratio of 27.00 and a beta of 1.04.

Insider Activity

In other news, Director Arve Hanstveit sold 165,292 shares of the stock in a transaction dated Thursday, April 2nd. The shares were sold at an average price of $10.14, for a total transaction of $1,676,060.88. Following the sale, the director directly owned 384,928 shares of the company's stock, valued at $3,903,169.92. This represents a 30.04% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is available through this link. Also, SVP Rodney Clemente sold 20,568 shares of the stock in a transaction dated Wednesday, March 4th. The stock was sold at an average price of $10.61, for a total transaction of $218,226.48. Following the sale, the senior vice president directly owned 116,008 shares in the company, valued at approximately $1,230,844.88. The trade was a 15.06% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Insiders have sold a total of 240,811 shares of company stock worth $2,489,840 over the last ninety days. 3.20% of the stock is owned by insiders.

Institutional Inflows and Outflows

A number of hedge funds and other institutional investors have recently bought and sold shares of the stock. Invesco Ltd. lifted its stake in Energy Recovery by 15.8% in the 4th quarter. Invesco Ltd. now owns 746,036 shares of the industrial products company's stock valued at $10,064,000 after buying an additional 101,972 shares in the last quarter. Mercer Global Advisors Inc. ADV lifted its stake in Energy Recovery by 52.8% in the 4th quarter. Mercer Global Advisors Inc. ADV now owns 38,950 shares of the industrial products company's stock valued at $525,000 after buying an additional 13,463 shares in the last quarter. XTX Topco Ltd purchased a new position in Energy Recovery in the 4th quarter valued at about $390,000. Old West Investment Management LLC raised its holdings in Energy Recovery by 14.6% in the 4th quarter. Old West Investment Management LLC now owns 49,944 shares of the industrial products company's stock valued at $674,000 after acquiring an additional 6,346 shares during the last quarter. Finally, Millennium Management LLC raised its holdings in Energy Recovery by 51.9% in the 4th quarter. Millennium Management LLC now owns 194,532 shares of the industrial products company's stock valued at $2,624,000 after acquiring an additional 66,457 shares during the last quarter. 83.58% of the stock is owned by hedge funds and other institutional investors.

Analysts Set New Price Targets

A number of analysts recently issued reports on ERII shares. Weiss Ratings reiterated a "hold (c-)" rating on shares of Energy Recovery in a report on Monday, April 27th. Northcoast Research lowered Energy Recovery from a "buy" rating to a "neutral" rating in a report on Wednesday, April 15th. Finally, Loop Capital set a $13.00 price objective on shares of Energy Recovery in a research note on Monday, March 2nd. One analyst has rated the stock with a Strong Buy rating, one has issued a Buy rating and three have assigned a Hold rating to the company's stock. According to MarketBeat, the company has a consensus rating of "Moderate Buy" and an average price target of $15.00.

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.

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