Is Energy Recovery, Inc. overvalued or undervalued?

As of 17 October 2025, the valuation grade for Energy Recovery, Inc. has moved from very attractive to fair, indicating a shift in its perceived value. The company appears to be fairly valued at this time. Key valuation ratios include a P/E ratio of 31, an EV to EBITDA of 25.21, and a PEG ratio of 1.03, which suggest that while the company is priced at a premium compared to some peers, it is not excessively so.
In comparison to its peers, Energy Recovery, Inc. has a P/E ratio of 31.92 and an EV to EBITDA of 25.76, indicating it is in line with industry standards. Notably, the company has demonstrated a strong ROCE of 18.40% and ROE of 12.38%. Over the past year, the stock has underperformed relative to the S&P 500, returning -6.94% compared to the index's 14.08%, but it has shown resilience with a 5-year return of 80.22%, albeit lower than the S&P's 91.29%.