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 appears to be fairly valued based on its current metrics. Key ratios include a P/E ratio of 31, an EV/EBITDA ratio of 25.21, and a PEG ratio of 1.03. In comparison, Modine Manufacturing Co. has a P/E ratio of 36.40 and an EV/EBITDA of 20.69, while Mueller Water Products, Inc. shows a lower P/E of 26.00 and an EV/EBITDA of 14.47.
Despite the fair valuation, Energy Recovery, Inc. has underperformed relative to the S&P 500, with a year-to-date return of 11.63% compared to the index's 16.30%. Over the last three years, the company has seen a decline of 10.28%, while the S&P 500 has gained 76.66%, indicating a potential need for improvement in performance to align with broader market trends.