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1. Company Snapshot

1.a. Company Description

Flowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally.It operates in two segments, Flowserve Pump Division (FPD) and Flow Control Division (FCD).The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines.


The FCD segment provides engineered and industrial valve and automation solutions, including isolation and control valves, actuation, controls, and related equipment, as well as equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities.This segment's products are used to control, direct, and manage the flow of liquids, gases, and fluids.The company primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications.


The company distributes its products through direct sales, distributors, and sales representatives.Flowserve Corporation was incorporated in 1912 and is headquartered in Irving, Texas.

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1.b. Last Insights on FLS

Flowserve Corporation's recent performance was driven by strong Q3 earnings, beating estimates with 45% profit growth, fueled by aftermarket sales growth and a raised EPS outlook. The company's 3D strategy and attractive valuation position it favorably against peers. With a significant surge in bookings, including 6% growth in aftermarket bookings, and a nuclear award worth $140 million, Flowserve's growth momentum appears sustainable. Its solid segment growth and efforts to address asbestos-related liability also contribute to a positive outlook.

1.c. Company Highlights

2. Flowserve's Q3 2025 Earnings: A Strong Performance

Flowserve reported a robust third quarter, with revenues growing 4% to $1.2 billion, adjusted gross margins expanding 240 basis points to 34.8%, and adjusted earnings per share (EPS) increasing 45% to $0.90, beating analyst estimates of $0.80. The company's adjusted operating margins also improved significantly, rising 370 basis points to 14.8%. The strong financial performance was driven by the company's focus on growth, margin expansion, and its Flowserve Business System.

Publication Date: Nov -01

📋 Highlights
  • Revenue Growth:: Achieved $1.2 billion in revenue, reflecting a 4% year-over-year increase.
  • Adjusted EPS Guidance Raised:: Increased 2025 adjusted EPS guidance to $3.40–$3.50, up from prior estimates.
  • Margin Expansion:: Adjusted gross margins rose 240 basis points to 34.8%, while adjusted operating margins expanded 370 basis points to 14.8%.
  • Cash Returns to Shareholders:: Returned $173 million in cash, including $145 million in share repurchases.
  • Nuclear Market Position:: Holds content in 75% of global nuclear reactors, targeting a $10 billion flow control opportunity over the next decade.

Segment Performance

The company's segments performed well, with Flowserve's aftermarket business delivering another strong quarter at $650 million. The Flow Control Division (FCD) also reported strong performance, with bookings growth of 24%, sales growth of 7%, and adjusted operating margins expanding 230 basis points. The company's focus on driving full-scale solutions and its strong market share in the nuclear space, with content in over 75% of the roughly 400 nuclear reactors operating globally, are expected to drive future growth.

Cash Flow and Capital Allocation

Flowserve generated significant cash from operations, with $402 million in the quarter, and free cash flow conversion was an impressive 174%. The company has a disciplined approach to capital allocation, with a focus on growth opportunities, share repurchases, and dividend payments. The company returned $173 million of cash to shareholders in the quarter, including $145 million of share repurchases. The resolution of the legacy asbestos issue is expected to simplify the company's capital structure and provide a more stable approach to capital allocation, with estimated cash flow benefits ranging from $15 million to $20 million per year.

Valuation and Outlook

With a P/E Ratio of 19.64 and an EV/EBITDA of 10.55, the company's valuation appears reasonable, considering its strong growth prospects and margin expansion. Analysts estimate revenue growth of 4.0% for next year, and the company's focus on nuclear and traditional power, as well as its strong aftermarket business, are expected to drive future growth. The company's return on invested capital (ROIC) of 9.5% and return on equity (ROE) of 21.12% also indicate a strong ability to generate returns for shareholders.

3. NewsRoom

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Flowserve Wins Prestigious 2025 Vaaler Award for Innovation in the Chemical Industry

Dec -04

Source: businesswire.com

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Flowserve Corporation (FLS) Presents at Goldman Sachs Industrials and Materials Conference 2025 Transcript

Dec -03

Source: seekingalpha.com

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4 Stocks With High Coverage Ratios Offer Safer Bets Going Into 2026

Dec -01

Source: zacks.com

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Boston Partners Takes $223.56 Million Position in Flowserve Corporation $FLS

Nov -27

Source: defenseworld.net

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Artisan Partners Limited Partnership Sells 5,035 Shares of Flowserve Corporation $FLS

Nov -21

Source: defenseworld.net

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Flowserve Corporation $FLS Shares Sold by Bailard Inc.

Nov -15

Source: defenseworld.net

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Allianz SE Invests $307,000 in Flowserve Corporation $FLS

Nov -14

Source: defenseworld.net

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Acadian Asset Management LLC Sells 79,495 Shares of Flowserve Corporation $FLS

Nov -14

Source: defenseworld.net

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.21%)

6. Segments

Flowserve Pump

Expected Growth: 4.5%

Flowserve Pump's 4.5% growth is driven by increasing demand for energy-efficient solutions, expansion in the oil and gas industry, and growing adoption of IoT-enabled pumps. Additionally, the company's strategic acquisitions, investments in digitalization, and focus on aftermarket services contribute to its growth momentum.

Flow Control

Expected Growth: 3.5%

Flow Control's 3.5% growth is driven by increasing demand for valves and actuators in the oil and gas industry, coupled with Flowserve's strategic expansion into emerging markets and investments in digitalization and IoT technologies, enabling improved operational efficiency and customer experience.

7. Detailed Products

Pumps

Flowserve offers a wide range of pumps, including centrifugal, positive displacement, and specialty pumps, designed for various industrial applications.

Seals

Flowserve provides a variety of mechanical seals, including cartridge seals, pusher seals, and mixer seals, designed for reliability and efficiency.

Valves

Flowserve offers a broad range of valves, including gate, globe, check, and ball valves, designed for precise control and reliability.

Actuators

Flowserve provides electric and pneumatic actuators, designed for precise control and reliability, used to operate valves and other equipment.

Controls

Flowserve offers a range of control systems, including instrumentation, automation, and monitoring systems, designed for efficient operation and optimization.

Repair and Services

Flowserve provides repair and maintenance services for pumps, valves, and other equipment, designed to extend equipment life and reduce downtime.

8. Flowserve Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Flowserve Corporation operates in a niche market, providing engineered and industrial pumps, valves, and seals to the oil and gas, chemical, and power generation industries. While there are some substitutes available, they are not as efficient or effective as Flowserve's products, reducing the threat of substitutes.

Bargaining Power Of Customers

Flowserve Corporation's customers are largely dependent on the company's products and services, giving them limited bargaining power. Additionally, the company's strong relationships with its customers and its ability to provide customized solutions reduce the bargaining power of customers.

Bargaining Power Of Suppliers

Flowserve Corporation relies on a diverse supplier base, which reduces the bargaining power of individual suppliers. However, the company's dependence on a few key suppliers for critical components increases the bargaining power of these suppliers.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the industries Flowserve Corporation operates in. The company's strong brand recognition, established customer relationships, and significant investments in research and development make it difficult for new entrants to compete.

Intensity Of Rivalry

The intensity of rivalry in the industries Flowserve Corporation operates in is high due to the presence of established competitors and the high stakes involved in the oil and gas, chemical, and power generation industries. The company must continually innovate and improve its products and services to maintain its market position.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 42.05%
Debt Cost 5.20%
Equity Weight 57.95%
Equity Cost 11.12%
WACC 8.63%
Leverage 72.55%

11. Quality Control: Flowserve Corporation passed 3 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Graco

A-Score: 5.3/10

Value: 2.2

Growth: 5.2

Quality: 8.5

Yield: 2.0

Momentum: 4.0

Volatility: 10.0

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Franklin Electric Co

A-Score: 5.1/10

Value: 3.0

Growth: 6.8

Quality: 6.6

Yield: 2.0

Momentum: 3.0

Volatility: 9.0

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IDEX

A-Score: 4.8/10

Value: 3.1

Growth: 4.9

Quality: 7.9

Yield: 3.0

Momentum: 2.0

Volatility: 8.0

1-Year Total Return ->

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Nordson

A-Score: 4.7/10

Value: 2.4

Growth: 5.0

Quality: 6.8

Yield: 2.0

Momentum: 3.0

Volatility: 8.7

1-Year Total Return ->

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Flowserve

A-Score: 4.7/10

Value: 4.7

Growth: 4.6

Quality: 7.4

Yield: 3.0

Momentum: 4.0

Volatility: 4.3

1-Year Total Return ->

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Kadant

A-Score: 4.2/10

Value: 2.4

Growth: 6.4

Quality: 7.0

Yield: 0.0

Momentum: 3.5

Volatility: 6.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

72.04$

Current Price

72.04$

Potential

-0.00%

Expected Cash-Flows