Is Energy Recovery, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Energy Recovery, Inc. moved from expensive to fair. The company is currently fairly valued based on its financial metrics. Key ratios include a P/E ratio of 31, an EV to EBITDA ratio of 25.21, and a PEG ratio of 1.03, which suggests that the stock is reasonably priced relative to its growth prospects.
In comparison to its peers, Energy Recovery, Inc. has a P/E ratio of 31.92, which is slightly higher than the industry average, while its EV to EBITDA ratio of 25.75 indicates it is in line with industry valuations. Notably, the company has a ROCE of 18.40% and a ROE of 12.38%, reflecting solid profitability. Over the past year, the stock has underperformed the S&P 500, returning -4.20% compared to the index's 19.89%, which may indicate potential for improvement as the valuation appears justified.