Energy Recovery Q4 Revenue Flat at $66.9M, EPS Miss Spurs 18.7% Stock Drop
Energy Recovery reported flat Q4 revenue of $66.87 million, missing analyst estimates by 19%, while non-GAAP EPS of $0.53 fell 20.9% short of expectations. Operating margin rose to 46.8% year-on-year, but free cash flow margin declined to 9.6%, and shares plunged 18.7% post-release.
1. Q4 Revenue and EPS Miss
Energy Recovery’s fourth-quarter sales were flat at $66.87 million, 19% below analyst forecasts, while adjusted EPS of $0.53 missed estimates by 20.9%.
2. Margin Performance
Operating margin increased to 46.8% from 41.9% a year earlier, yet gross margin contracted by 300 basis points to 67.2% and free cash flow margin fell to 9.6%.
3. Market Reaction
Shares declined 18.7% following the results, reflecting investor concerns over the revenue and earnings shortfall despite margin improvements.
4. Analyst Outlook
Sell-side analysts anticipate 17% revenue growth and 51.9% EPS growth over the next 12 months as new products enter the market.