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1. Company Snapshot

1.a. Company Description

Zurn Elkay Water Solutions Corporation designs, procures, manufactures, and markets water system solutions that provide and enhance water quality, safety, flow control, and conservation in and around non-residential buildings.It offers finish plumbing, drainage and interceptors, water control and backflow, fire protection, PEX pipe fittings and accessories, and repair parts under the Zurn brand name; and hand and hair dryers, and baby changing stations under the World Dryer brand name.The company also offers stainless steel products under the Just Manufacturing brand name, which include stainless steel sinks for classrooms and academic institutions; ADA commercial stainless-steel sinks and plumbing fixtures for assisted living; faucets, bubblers, drains, and accessories; and stainless steel fixtures and related products for food services, government, healthcare, hospitality, institutional, and residential markets.


It serves higher education, healthcare, retail, restaurant, hospitality, education, government, and fire protection markets.The company was formerly known as Zurn Water Solutions Corporation.Zurn Elkay Water Solutions Corporation was incorporated in 2006 and is headquartered in Milwaukee, Wisconsin.

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1.b. Last Insights on ZWS

Zurn Elkay Water Solutions Corporation's recent performance was driven by strong Q2 earnings, with a 27% jump in EPS, beating estimates. The company's solid financial results and growing optimism about its earnings prospects led to a rating upgrade to Strong Buy. Additionally, Zurn Elkay's strong efficiency ratios and growth characteristics make it an attractive stock for investors seeking solid gains amid market volatility.

1.c. Company Highlights

2. Zurn Elkay's Strong Q3 2025 Earnings Beat Expectations

Zurn Elkay Water Solutions Corporation reported a robust Q3 2025, with an 11% organic sales growth year-over-year, resulting in $455 million in sales and $122 million in EBITDA, representing a 16% growth and 26.8% margin. The company's EPS came in at $0.43, beating estimates of $0.4. The strong financial performance was accompanied by a healthy free cash flow of $94 million, which was utilized to repurchase 600,000 shares, bringing the year-to-date repurchases to $135 million or 3.8% of total shares outstanding.

Publication Date: Nov -02

📋 Highlights
  • Strong Q3 2025 Performance: Achieved $455M sales (+11% organic Y/Y) and $122M EBITDA (26.8% margin), up 16% Y/Y.
  • Share Repurchase Momentum: Repurchased 600,000 shares ($94M) in Q3, with $135M in year-to-date repurchases covering 3.8% of shares.
  • Full-Year Guidance Raised: Projects 8% core sales growth, $437–$440M EBITDA, and >$300M free cash flow for 2025.
  • Debt Reduction & Pension Progress: Net debt leverage fell to 0.6x, lowest since IPO, with $200M U.S. pension liability eliminated.
  • Sustainability & Market Expansion: Delivered 1.8B gallons of filtered water; leveraged $50M Michigan/NJ programs for school filtration growth.

Financial Performance

The company's net debt leverage ended at 0.6x, the lowest as a public company, indicating a strong balance sheet. The company's President and CEO, Todd Adams, mentioned that almost all core categories are experiencing solid unit growth on top of a little bit of market, on top of a little bit of price, highlighting the company's ability to drive growth through a combination of volume, price, and market share gains.

Outlook and Guidance

The company raised its full-year estimates for growth, profitability, and cash flow, projecting core sales growth to approximately 8%, adjusted EBITDA to $437 million to $440 million, and free cash flow greater than $300 million. For Q4 2025, it projects year-over-year core sales growth in the high single digits and adjusted EBITDA between $99 million and $102 million.

Valuation

With a P/E Ratio of 41.19, P/B Ratio of 5.06, and EV/EBITDA of 22.91, the company's valuation appears to be premium. However, its strong track record of consistent growth, with 55 out of 59 quarters of year-over-year growth, and its unique positioning across the construction cycle, may justify the premium. Analysts estimate next year's revenue growth at 5.1%, which may not be enough to justify the current valuation.

Growth Opportunities

The company is well-positioned to capitalize on growth opportunities, particularly in the drinking water segment, with the launch of new products such as the Elkay Liv built-in filtered bottle fillers. The company's flow systems business has grown at or above the fleet average throughout the year, indicating a relatively stable market with opportunities for acceleration. Additionally, the company is poised to benefit from legislative initiatives, such as the Filter First program in Michigan, which aims to eliminate lead and contaminants in schools' drinking water.

3. NewsRoom

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Zurn Elkay Water Solutions Cor $ZWS Holdings Lifted by Fisher Asset Management LLC

Dec -03

Source: defenseworld.net

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Zurn Elkay Water Solutions Cor $ZWS Shares Acquired by Creative Planning

Nov -26

Source: defenseworld.net

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Creative Planning Buys 15,729 Shares of Zurn Elkay Water Solutions Cor $ZWS

Nov -26

Source: defenseworld.net

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3 Stocks to Consider From the Growing Waste Removal Services Market

Nov -24

Source: zacks.com

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Zurn Elkay Water Solutions Again Named to TIME's List of World's Best Companies for Sustainable Growth

Nov -19

Source: businesswire.com

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Carillon Eagle Small Cap Growth Fund Q3 2025 Portfolio Update

Nov -13

Source: seekingalpha.com

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Best Growth Stocks to Buy for Nov. 12

Nov -12

Source: zacks.com

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Best Growth Stocks to Buy for Nov. 5

Nov -05

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (4.00%)

6. Segments

Water Management

Expected Growth: 4.0%

Zurn Elkay Water Solutions Corporation's 4.0% growth in Water Management is driven by increasing demand for water conservation, stringent government regulations, and rising adoption of smart water management systems. Additionally, growing concerns over water scarcity, aging infrastructure, and the need for efficient irrigation systems in agriculture also contribute to this growth.

7. Detailed Products

Water Conservation Fixtures

Low-flow faucets, toilets, and urinals designed to reduce water consumption while maintaining performance

Plumbing Fixtures

Sinks, toilets, and lavatories designed for durability and ease of maintenance

Water Filtration Systems

Point-of-use and point-of-entry water filtration systems for clean drinking water

Water Heaters

Energy-efficient electric, gas, and heat pump water heaters for residential and commercial applications

Pumps and Boosters

Centrifugal pumps, booster pumps, and accessories for water supply and pressure-boosting applications

Water Treatment Solutions

Water softening, conditioning, and purification systems for residential and commercial applications

8. Zurn Elkay Water Solutions Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Zurn Elkay Water Solutions Corporation is medium due to the availability of alternative products and services in the water solutions industry.

Bargaining Power Of Customers

The bargaining power of customers for Zurn Elkay Water Solutions Corporation is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Zurn Elkay Water Solutions Corporation is medium due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Zurn Elkay Water Solutions Corporation is high due to the relatively low barriers to entry in the water solutions industry.

Intensity Of Rivalry

The intensity of rivalry for Zurn Elkay Water Solutions Corporation is high due to the presence of several established players in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 26.09%
Debt Cost 6.94%
Equity Weight 73.91%
Equity Cost 9.07%
WACC 8.51%
Leverage 35.30%

11. Quality Control: Zurn Elkay Water Solutions Corporation passed 4 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

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Granite Construction

A-Score: 5.8/10

Value: 4.5

Growth: 7.9

Quality: 4.8

Yield: 1.0

Momentum: 8.0

Volatility: 8.7

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RBC Bearings

A-Score: 5.3/10

Value: 0.8

Growth: 7.4

Quality: 6.8

Yield: 0.0

Momentum: 8.5

Volatility: 8.3

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Zurn Elkay Water Solutions

A-Score: 5.0/10

Value: 1.9

Growth: 3.3

Quality: 7.1

Yield: 2.0

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

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Federal Signal

A-Score: 5.0/10

Value: 1.6

Growth: 7.6

Quality: 7.1

Yield: 0.0

Momentum: 7.5

Volatility: 6.0

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Kirby

A-Score: 4.3/10

Value: 6.3

Growth: 6.1

Quality: 6.7

Yield: 0.0

Momentum: 1.0

Volatility: 5.7

1-Year Total Return ->

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Atmus Filtration Technologies

A-Score: 4.0/10

Value: 2.7

Growth: 3.4

Quality: 6.2

Yield: 0.0

Momentum: 6.5

Volatility: 5.0

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

46.9$

Current Price

46.91$

Potential

-0.00%

Expected Cash-Flows