Core Insights - Energy Recovery's shares fell 11.6% following the release of disappointing earnings despite beating revenue and EPS estimates [1] - The company reported revenue of $32 million, a 17.1% decline year-over-year, and adjusted EPS of $0.12, surpassing the forecast of $0.10 [1] - Adjusted EBITDA of $6.8 million missed analyst expectations, and operating margin decreased to 11.4% from 18.3% year-over-year, raising investor concerns [1] Financial Performance - Revenue of $32 million exceeded the consensus estimate of $29.94 million but represented a significant decline from the previous year [1] - Adjusted EPS of $0.12 was above the forecast of $0.10, indicating some positive performance on the bottom line [1] - Adjusted EBITDA of $6.8 million fell short of analyst estimates, highlighting underlying weaknesses in profitability [1] Market Reaction - The stock experienced significant volatility, with 11 moves greater than 5% in the past year, indicating a strong market reaction to recent news [3] - The recent drop in share price reflects a shift in market perception regarding the company's performance and future prospects [3] Historical Context - The stock had previously gained 8.4% three months ago following the announcement of a $25 million share repurchase program, reflecting management's confidence in growth and cash generation [4] - The total share repurchase program reached $105 million over the past year, indicating a commitment to returning value to shareholders [4] Current Valuation - Energy Recovery's stock is trading at $14.99 per share, which is 24.8% below its 52-week high of $19.93 from November 2024 [5] - An investment of $1,000 in Energy Recovery's shares five years ago would now be worth $1,496, showing a moderate growth trajectory over the long term [5]