Is Energy Recovery, Inc. overvalued or undervalued?

As of 13 May 2025, the valuation grade for Energy Recovery, Inc. has moved from attractive to fair, indicating a shift in its perceived value. The company appears to be fairly valued given its current P/E ratio of 31, which is in line with its peer group, as well as an EV to EBITDA ratio of 25.21. Additionally, the PEG ratio stands at 1.03, suggesting that the stock is reasonably priced relative to its growth prospects.
In comparison to peers, Energy Recovery, Inc. has a P/E ratio of 31.92, while its closest competitor shows an EV to EBITDA of 25.75 and a PEG of 0.84, indicating that Energy Recovery is on par with its industry but not significantly undervalued. Notably, the company's recent stock performance has been mixed; it has returned -10.10% over the past year compared to a 17.14% return for the S&P 500, highlighting a lag in performance relative to the broader market.