| Valuation method | Value, $ | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 39.41 | -15 |
| Intrinsic value (DCF) | 33.19 | -28 |
| Graham-Dodd Method | 4.34 | -91 |
| Graham Formula | 9.73 | -79 |
Zurn Elkay Water Solutions Corporation (NYSE: ZWS) is a leading provider of water system solutions designed to enhance water quality, safety, flow control, and conservation in non-residential buildings. Headquartered in Milwaukee, Wisconsin, the company operates under well-known brands such as Zurn, World Dryer, and Just Manufacturing, offering a comprehensive portfolio of finish plumbing, drainage systems, water control, fire protection, and stainless-steel fixtures. Serving key markets like healthcare, education, hospitality, and government, Zurn Elkay plays a critical role in sustainable water management and infrastructure efficiency. With a strong focus on innovation and regulatory compliance, the company addresses growing demand for water conservation and safety solutions in commercial and institutional settings. Its diversified product line and established brand reputation position it as a key player in the industrial pollution and treatment controls sector.
Zurn Elkay Water Solutions presents a stable investment opportunity with a market cap of ~$5.98B and a beta of 0.79, indicating lower volatility relative to the broader market. The company reported $1.57B in revenue and $160.2M in net income for the latest fiscal year, with a diluted EPS of $0.92. Strong operating cash flow ($293.5M) and manageable debt ($551.6M) underscore financial resilience. However, its dividend yield (~0.6% at current share price) may appeal more to growth-oriented investors than income seekers. Risks include exposure to cyclical non-residential construction activity and competitive pressures in the water solutions space. Long-term growth drivers include regulatory tailwinds for water conservation and aging infrastructure replacement.
Zurn Elkay Water Solutions competes in the fragmented water infrastructure and plumbing solutions market, leveraging its brand equity, diversified product portfolio, and focus on commercial/industrial applications. Its competitive advantage stems from: (1) Specialization in high-performance stainless-steel fixtures (Just Manufacturing) and water-efficient technologies, differentiating it from generic plumbing suppliers; (2) Cross-selling opportunities across its Zurn, World Dryer, and Just Manufacturing brands; (3) Strong relationships with contractors and distributors in education and healthcare verticals. However, the company faces pricing pressure from low-cost Asian manufacturers and must continually innovate to maintain share against integrated players like Ferguson (WSO) that offer broader distribution networks. Its focus on North America (a strength for service responsiveness) also limits exposure to faster-growing emerging markets. Regulatory expertise in water standards (e.g., ADA compliance, lead-free requirements) provides some moat.