Is Energy Recovery, Inc. overvalued or undervalued?

As of 31 October 2025, the valuation grade for Energy Recovery, Inc. moved from expensive to fair, indicating a more favorable assessment of its stock price. The company appears fairly valued based on its current metrics. Key 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 stock is not cheap, it is not excessively priced relative to its growth potential.
In comparison to its peers, Energy Recovery, Inc. has a P/E ratio of 31.92, slightly higher than the industry average, while its EV to EBITDA ratio of 25.75 is also indicative of a competitive position within the sector. Notably, the company's ROCE stands at 18.40%, reflecting efficient capital use. Although specific return data is not available, the absence of a strong return comparison against the S&P 500 suggests that the stock's performance may not have significantly outpaced the benchmark recently.