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]

Financial Performance - Energy Recovery (ERII) reported a quarterly loss of $0.13 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.01, and compared to a loss of $0.08 per share a year ago, indicating a significant earnings surprise of -1,200% [1] - The company posted revenues of $8.07 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 56.31%, and down from $12.09 million in the same quarter last year [2] - Over the last four quarters, Energy Recovery has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Market Performance - Energy Recovery shares have increased by approximately 1.2% since the beginning of the year, contrasting with the S&P 500's decline of -4.7% [3] - The current consensus EPS estimate for the upcoming quarter is $0.12 on revenues of $31.6 million, while for the current fiscal year, it is $0.80 on revenues of $159.56 million [7] Industry Outlook - The Pollution Control industry, to which Energy Recovery belongs, is currently ranked in the bottom 18% of over 250 Zacks industries, suggesting potential challenges ahead [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact Energy Recovery's stock performance [5]