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Energy RecoveryERII -3.26%64 Forward Rate of Return (Yacktman) % is 11.55% as of Jun. 2026, which is 252% above its 10-year median of 3.28. GuruFocus rates ERII with a GF Score™ of 64/100 and a GF Value™ of $13.06 (Significantly Undervalued). The stock has 6 warning signs investors should review. Among 2,145 Industrial Products companies, Energy Recovery ranks better than 60.42% on this metric.
Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. Energy Recovery's forward rate of return for was 11.55%.
The historical rank and industry rank for Energy Recovery's Forward Rate of Return (Yacktman) % or its related term are showing as below:
ERII'
s Forward Rate of Return (Yacktman) % Range Over the Past 10 Years
Min: -5.69 Med: 3.28 Max: 20.33
Current: 12.27
During the past 13 years, Energy Recovery's highest Forward Rate of Return was 20.33. The lowest was -5.69. And the median was 3.28.
ERII's Forward Rate of Return (Yacktman) % is ranked better than 60.42% of 2145
companies
in the Industrial Products industry
Industry Median: 7.37
vs ERII: 12.27
Unlike the Earnings Yield %, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
Energy Recovery (NAS:ERII) Forward Rate of Return (Yacktman) % Explanation
Unlike the Earnings Yield, the Forward Rate of Return uses the normalized Free Cash Flow of the past five years, and considers growth. The forward rate of return can be thought of as the return that investors buying the stock today can expect from it in the future.
For the growth part of the Forward Rate of Return calculation, GuruFocus uses the 5-year average growth rate of EBITDA per share as the growth rate, and the growth rate is always capped at 20%. For the Free Cash Flow we use per share data averaged over five years. The reason we use five years is to make it comparable to the growth rate.
Be Aware
In the Forward Rate of Return calculation, the growth rate is added directly to today's free cash flow yield. Therefore the calculation is reliable only if the company can grow at the same rate in the future as it did in the past. Investors should pay close attention to this when researching growth stocks. A more accurate measurement for return is Return on Capital.
Energy Recovery Forward Rate of Return (Yacktman) % Related Terms
Energy Recovery Forward Rate of Return (Yacktman) % Historical Data
* Premium members only.
The historical data trend for Energy Recovery's Forward Rate of Return (Yacktman) % can be seen below:
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Energy Recovery Forward Rate of Return (Yacktman) % Chart
ERII vs ZONE, ARQ, FTEK: Forward Rate of Return (Yacktman) % Comparison
For the Pollution & Treatment Controls subindustry, Energy Recovery's Forward Rate of Return (Yacktman) %, along with its competitors' market caps and Forward Rate of Return (Yacktman) % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Energy Recovery Forward Rate of Return (Yacktman) % vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Energy Recovery's Forward Rate of Return (Yacktman) % distribution charts can be found below:
* The bar in red indicates where Energy Recovery's Forward Rate of Return (Yacktman) % falls into.
Energy Recovery Forward Rate of Return (Yacktman) % Calculation
Forward Rate of Return is a concept that Don Yacktman uses in his investment approach. Yacktman explained the forward rate of return concept in detail in his interview with GuruFocus. Yacktman defines forward rate of return as the normalized free cash flow yield plus real growth plus inflation. He said in the interview (March 2012, when the S&P 500 was at about 1400):
If the business is stable, this calculation is fairly straightforward. For instance, on the S&P 500 we would normalize earnings. We would then calculate what percentage of those earnings are not reinvested in the underlying businesses and are therefore free. Historically, for the S&P 500, this has been just under 50% of earnings. Currently, we expect the S&P to earn about 70 on a normalized basis, a number which is far below reported earnings due to our adjusting for record high profit margins. $70 X ½ / 1400 gives you a normalized free cash flow yield of approximately 2.5%.
The historical real growth rate of the S&P 500 (companies) is about 1.5%. Assuming an inflation rate of 2.5%, the forward rate of return on an investment in the S&P 500 is about 6.5% today (2.5% free cash flow yield plus 1.5% real growth plus 2.5% inflation).
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
What does a Forward Rate of Return (Yacktman) % of 11.55% mean?
Energy Recovery (ERII) has a Forward Rate of Return (Yacktman) % of 11.55% as of Jun. 2026. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Energy Recovery and its competitors. This is 252% above median its historical median of 3.28. According to the industry distribution chart, Energy Recovery ranks #849 out of 2145 companies in the Industrial Products industry, placing it in the top 39.6%.
Is Energy Recovery's Forward Rate of Return (Yacktman) % too high?
Energy Recovery's current Forward Rate of Return (Yacktman) % of 11.55% is 252% above median its 10-year median of 3.28. The Industrial Products industry median Forward Rate of Return (Yacktman) % is 7.37. Energy Recovery's value of 11.55% is 56.7% above this industry median. Based on the distribution chart, Energy Recovery ranks #849 out of 2145 companies in the Industrial Products industry, which is above the industry midpoint. Overall, Energy Recovery has a GF Score™ of 64/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Energy Recovery's Forward Rate of Return (Yacktman) % compare to ZONE and ARQ?
According to the Industrial Products industry distribution chart, Energy Recovery ranks #849 out of 2145 companies for Forward Rate of Return (Yacktman) %. This puts Energy Recovery in the upper half of its industry. The industry median Forward Rate of Return (Yacktman) % is 7.37. Energy Recovery's value of 11.55% is 56.7% above this benchmark. While the company's 10-year median is 3.28 vs. the industry median of 7.37, Energy Recovery has consistently been above the industry average. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Forward Rate of Return (Yacktman) % for an Industrial Products company?
The median Forward Rate of Return (Yacktman) % among Industrial Products companies is 7.37, based on 2,145 companies in the industry. Companies in the top quartile (top 25%) have a Forward Rate of Return (Yacktman) % significantly above this median, while those in the bottom quartile fall well below. However, Forward Rate of Return (Yacktman) % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Energy Recovery's current Forward Rate of Return (Yacktman) % of 11.55% is 56.7% above the industry median. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Forward Rate of Return (Yacktman) % mean?
A high Forward Rate of Return (Yacktman) % can signal that a stock is expensive relative to its fundamentals. Yacktman's forward rate of return equals the sum of normalized free-cash-flow yield plus earnings growth. View historical data on Energy Recovery and its competitors. For the Industrial Products industry, the median Forward Rate of Return (Yacktman) % is 7.37 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Energy Recovery's current Forward Rate of Return (Yacktman) % is 11.55%, which is 252% above median its own 10-year median of 3.28. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Energy Recovery stock overvalued right now?
Based on GuruFocus' analysis, Energy Recovery (ERII) is currently considered Significantly Undervalued. The stock's GF Value™ is $13.06, compared to a current price of $7.72 — trading 40.9% below its estimated fair value. The current Forward Rate of Return (Yacktman) % is 11.55%, which is 252% above median its 10-year median of 3.28 and 56.7% above the Industrial Products industry median of 7.37. Energy Recovery's overall GF Score™ is 64/100 with 6 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Forward Rate of Return (Yacktman) % calculated?
Forward Rate of Return (Yacktman) % is calculated from a company's financial statements. For Energy Recovery (ERII), the current Forward Rate of Return (Yacktman) % is 11.55% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Energy Recovery (ERII) Overvalued in 2026?
Based on GuruFocus' analysis, Energy Recovery stock appears to be undervalued.
The current stock price of $7.72 is trading 40.9% below its estimated GF Value™ of $13.06.
GuruFocus considers Energy Recovery to be Significantly Undervalued.
Key valuation signals for ERII:
Forward Rate of Return (Yacktman) %: 11.55% (252% above median its 10-year median of 3.28)
GF Value™: $13.06 vs. price of $7.72 (40.9% below fair value)
Industry Position: 56.7% above the Industrial Products median (#849 of 2145)
No single metric tells the full story. See the ERII stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Energy Recovery Inc designs and manufactures energy-saving technologies. The firm uses its proprietary pressure exchanger technology to help customers in multiple industries improve their operations and lower their emissions. Using its proprietary technology, it offers energy recovery devices, including pressure exchangers, pumps, and turbochargers, mainly used for seawater desalination and wastewater treatment. Additionally, the company is involved in the development of emerging technologies, such as the PX G1300 used in industrial and commercial refrigeration applications. The firm's reportable operating segments are: Water, which generates maximum revenue, and Emerging Technologies. Geographically, it generates maximum revenue from the Middle East, and the rest from other markets.
64GF Score
Get the complete analysis for ERII
Forward Rate of Return (Yacktman) % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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