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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' recent performance was driven by strong Q4 earnings, beating estimates with $0.36 per share, exceeding the Zacks Consensus Estimate of $0.34 per share. The company's resilient institutional customer base and upgrade cycle to filtered water stations created a recurring high-margin revenue stream. Additionally, the Michigan 'Filter First' law and similar legislation in other states are expected to accelerate demand. Institutional investors, such as Fisher Asset Management and Creative Planning, have increased their holdings, with ratings firms assigning an average "Moderate Buy" rating.

1.c. Company Highlights

2. Zurn Elkay Water Solutions Posts Strong Q4 2025 Earnings, Driven by Organic Sales Growth and Margin Expansion

Zurn Elkay Water Solutions reported a robust fourth quarter 2025, with sales growing 10% organically to $407 million, and EBITDA increasing 14% to $104 million, resulting in a margin expansion of 100 basis points to 25.6%. Earnings per share (EPS) came in at $0.36, beating analyst estimates of $0.34. The company's free cash flow generation was also impressive, with $83 million generated in the quarter, bringing the full-year total to $317 million, a 17% improvement over 2024. As CFO David Pauli noted, the company continued to deliver a positive price/cost position with respect to tariffs, with roughly 5 points of price benefit in the quarter from previously announced tariff-related pricing actions.

Publication Date: Feb -12

📋 Highlights
  • Q4 2025 Organic Sales Growth:: 10% year-over-year, with EBITDA rising 14% to $104 million and margins expanding 100 bps to 25.6%.
  • Free Cash Flow Performance:: Generated $83 million in Q4, totaling $317 million annually, a 17% improvement from 2024.
  • 2026 Guidance:: Core sales expected to grow mid-single digits, 35% incremental EBITDA margins, and $335 million in free cash flow.
  • Product Innovation & Sustainability:: Launched Pro Filtration with PFAS-capturing filters and partnered with TerraCycle for recycling programs.
  • Market Expansion Strategy:: Focused on adjacencies in North America, leveraging expertise in water and plumbing, with $335M FCF to support M&A opportunities.

Guidance and Outlook

For 2026, Zurn Elkay Water Solutions expects core sales to grow in the mid-single digits, with incremental adjusted EBITDA margins of approximately 35%, and free cash flow generation of around $335 million. Management is optimistic about beating its sales guidance for the year, driven by a strong start to 2026 and a favorable market outlook.

Growth Opportunities and Adjacencies

The company is exploring new adjacencies and verticals, leveraging its expertise and go-to-market strategy to become a formidable competitor in these spaces. With a focus on water and professional-grade plumbing, Zurn Elkay is identifying niche products and building a portfolio around them to drive growth. The company's data center business is also growing, with a strong suite of products that compete well in the space.

Valuation and Metrics

With a P/E Ratio of 43.67 and an EV/EBITDA multiple of 23.84, the market appears to be pricing in a certain level of growth and profitability for Zurn Elkay Water Solutions. The company's Return on Invested Capital (ROIC) of 8.83% and Return on Equity (ROE) of 12.56% suggest a relatively efficient use of capital. Analysts estimate revenue growth at 5.1% for next year, which is slightly below the company's guided mid-single digit growth range.

Inflation and Pricing

Zurn Elkay is watching metal prices closely and is prepared to take judicious price increases to maintain its margins. With supply chain optimization efforts reducing costs, the company is relatively well-positioned to navigate potential inflationary pressures. The company expects 4-5 points of price in the first quarter of 2026, followed by lapping of previous price increases in the back half of the year.

3. NewsRoom

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Todd Adams Sells 263,347 Shares of Zurn Elkay Water Solutions Cor (NYSE:ZWS) Stock

Feb -12

Source: defenseworld.net

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Todd Adams Sells 275,050 Shares of Zurn Elkay Water Solutions Cor (NYSE:ZWS) Stock

Feb -12

Source: defenseworld.net

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Zurn Elkay Water Solutions Corporation (ZWS) Q4 2025 Earnings Call Transcript

Feb -04

Source: seekingalpha.com

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Zurn Water (ZWS) Surpasses Q4 Earnings and Revenue Estimates

Feb -03

Source: zacks.com

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Zurn Elkay Water Solutions Reports Fourth Quarter and Full Year 2025 Financial Results

Feb -03

Source: businesswire.com

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Zurn Elkay Water Solutions Schedules Fourth Quarter 2025 Earnings Release and Investor Conference Call

Jan -21

Source: businesswire.com

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Bet on These 5 Low-Leverage Stocks to Avoid Industrial Volatilities

Jan -15

Source: zacks.com

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VEOEY vs. ZWS: Which Stock Is the Better Value Option?

Jan -13

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: 5.4/10

Value: 3.2

Growth: 7.9

Quality: 4.7

Yield: 1.0

Momentum: 7.0

Volatility: 8.7

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RBC Bearings

A-Score: 5.3/10

Value: 0.9

Growth: 7.3

Quality: 6.6

Yield: 0.0

Momentum: 8.5

Volatility: 8.7

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Federal Signal

A-Score: 5.1/10

Value: 2.4

Growth: 7.6

Quality: 7.3

Yield: 0.0

Momentum: 7.0

Volatility: 6.0

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Zurn Elkay Water Solutions

A-Score: 5.0/10

Value: 2.0

Growth: 3.3

Quality: 7.1

Yield: 2.0

Momentum: 8.0

Volatility: 7.7

1-Year Total Return ->

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Kirby

A-Score: 4.4/10

Value: 4.8

Growth: 6.1

Quality: 5.3

Yield: 0.0

Momentum: 4.0

Volatility: 6.3

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Atmus Filtration Technologies

A-Score: 4.1/10

Value: 2.3

Growth: 3.4

Quality: 6.9

Yield: 0.0

Momentum: 7.0

Volatility: 4.7

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

50.85$

Current Price

50.85$

Potential

-0.00%

Expected Cash-Flows