Energy Recovery (NASDAQ:ERII) Shares Gap Down on Analyst Downgrade

Key Points

• Analyst downgrade from Northcoast Research to "neutral" triggered a pre-market gap down — the stock opened at $10.48 after a $11.29 close and last traded around $10.73 on elevated volume.
• Heavy insider selling has occurred recently, including Director Arve Hanstveit's sale of 165,292 shares and SVP Rodney Clemente's sale of 20,568 shares; insiders sold 248,811 shares over the past 90 days and now own about 3.20% of the company.
• Q4 results missed expectations as EPS was $0.53 vs. $0.67 expected and revenue was $66.6M vs. $82.6M expected; management set FY2026 EPS guidance of $0.50–$0.70 while analysts on average forecast $0.36 for the year.

Energy Recovery, Inc. (NASDAQ:ERII - Get Free Report)'s stock price gapped down before the market opened on Wednesday after Northcoast Research downgraded the stock from a buy rating to a neutral rating. The stock had previously closed at $11.29, but opened at $10.48. Energy Recovery shares last traded at $10.7280, with a volume of 184,437 shares changing hands.

Other equities research analysts have also recently issued research reports about the stock. Loop Capital set a $13.00 price objective on shares of Energy Recovery in a research report on Monday, March 2nd. Weiss Ratings reissued a "hold (c-)" rating on shares of Energy Recovery in a report on Monday, December 29th. One equities research analyst has rated the stock with a Strong Buy rating, one has given a Buy rating and three have issued a Hold rating to the stock. According to data from MarketBeat.com, Energy Recovery has an average rating of "Moderate Buy" and an average target price of $15.00.

Insiders Place Their Bets

In related news, Director Arve Hanstveit sold 165,292 shares of Energy Recovery stock in a transaction that occurred on 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 approximately $3,903,169.92. The trade was a 30.04% decrease in their position. The sale was disclosed in a document filed with the SEC, which is available through this hyperlink. Also, SVP Rodney Clemente sold 20,568 shares of the company's stock in a transaction that occurred on Wednesday, March 4th. The stock was sold at an average price of $10.61, for a total transaction of $218,226.48. Following the transaction, the senior vice president owned 116,008 shares of the company's stock, valued at approximately $1,230,844.88. This represents a 15.06% decrease in their ownership of the stock. The SEC filing for this sale provides additional information. Over the last 90 days, insiders sold 248,811 shares of company stock valued at $2,606,175. 3.20% of the stock is currently owned by corporate insiders.

Institutional Trading of Energy Recovery

A number of hedge funds and other institutional investors have recently modified their holdings of the stock. Wexford Capital LP acquired a new position in shares of Energy Recovery during the third quarter worth $27,000. Hantz Financial Services Inc. boosted its holdings in shares of Energy Recovery by 2,581.9% during the 3rd quarter. Hantz Financial Services Inc. now owns 1,931 shares of the industrial products company's stock valued at $30,000 after acquiring an additional 1,859 shares in the last quarter. Parallel Advisors LLC bought a new stake in Energy Recovery during the 4th quarter worth $38,000. State of Alaska Department of Revenue bought a new stake in Energy Recovery during the 3rd quarter worth $46,000. Finally, Comerica Bank increased its holdings in Energy Recovery by 150.5% in the 4th quarter. Comerica Bank now owns 3,868 shares of the industrial products company's stock worth $52,000 after purchasing an additional 2,324 shares in the last quarter. Institutional investors own 83.58% of the company's stock.

Energy Recovery Stock Performance

The firm has a market cap of $567.39 million, a price-to-earnings ratio of 24.95 and a beta of 1.08. The business has a fifty day simple moving average of $12.08 and a 200-day simple moving average of $13.93.

Energy Recovery (NASDAQ:ERII - Get Free Report) last announced its quarterly earnings results on Wednesday, February 25th. The industrial products company reported $0.53 EPS for the quarter, missing analysts' consensus estimates of $0.67 by ($0.14). Energy Recovery had a net margin of 17.01% and a return on equity of 11.92%. The firm had revenue of $66.59 million for the quarter, compared to analyst estimates of $82.59 million. Energy Recovery has set its FY 2026 guidance at 0.500-0.700 EPS. On average, equities analysts anticipate that Energy Recovery, Inc. will post 0.36 earnings per share for the current year.

About Energy Recovery

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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