Energy Recovery Inc. (ERII) exhibits 65.1% gross margins and 11.9% return on invested capital within Technology (Industrial Machinery/Components), balanced against a 12.6x enterprise multiple and 4.8% implied options volatility.
Sustained 65.1% gross profitability converts into 17.7% operating margin and 11.9% ROIC, outpacing sector cost of capital.
ROIC: 11.9% // GM: 65.1%YoY revenue trajectory of -6.9% paired with 4.80% free cash flow yield supports self-funded R&D and capital return.
REV YOY: -6.9% // FCF YLD: 4.80%Altman Z-Score of 11.16 and Piotroski F-Score of 5/9 indicate low near-term refinancing stress.
ALTMAN Z: 11.16 // F-SCORE: 5/9Trading at 15.8x trailing P/E (14.7x Fwd P/E) leaves valuation vulnerable if real 10Y TIPS yields spike.
P/E: 15.8x // EV/EBITDA: 12.6xOptions market prices a ±5.2% implied move with a 0.85 put/call ratio around $7.12 max pain.
IMPL MOVE: ±5.2% // P/C: 0.85Elevated industry capital intensity and customer concentration in Industrial Machinery/Components require continuous execution to defend 17.0% net margins.
NET MARGIN: 17.0% // D/E: 0.45x| FILER | SIDE | $ VALUE |
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| INSPECT FULL OWNERSHIP LEDGER IN OWN <GO> | ||
| STRIKE / EXP | TYPE | PREMIUM |
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| INSPECT GEX & CHAIN IN OPT <GO> | ||
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