Energy RecoveryERII +0.23%71 Return-on-Tangible-Equity is -26.74% as of Mar. 2026. GuruFocus rates ERII with a GF Score™ of 71/100 and a GF Value™ of $14.78 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 2,971 Industrial Products companies, Energy Recovery ranks better than 68.33% on this metric.
Return-on-Tangible-Equity is calculated as Net Income divided by its average total shareholder tangible equity. Total shareholder tangible equity equals to Total Stockholders Equity minus Intangible Assets. Energy Recovery's annualized net income for the quarter that ended in Mar. 2026 was $-49.0 Mil. Energy Recovery's average shareholder tangible equity for the quarter that ended in Mar. 2026 was $183.3 Mil. Therefore, Energy Recovery's annualized Return-on-Tangible-Equity for the quarter that ended in Mar. 2026 was -26.74%.
The historical rank and industry rank for Energy Recovery's Return-on-Tangible-Equity or its related term are showing as below:
ERII'
s Return-on-Tangible-Equity Range Over the Past 10 Years
Min: 7.53 Med: 11.58 Max: 28.62
Current: 11.54
During the past 13 years, Energy Recovery's highest Return-on-Tangible-Equity was 28.62%. The lowest was 7.53%. And the median was 11.58%.
ERII's Return-on-Tangible-Equity is ranked better than 68.33% of 2971
companies
in the Industrial Products industry
Industry Median: 6.74
vs ERII: 11.54
Energy Recovery (NAS:ERII) Return-on-Tangible-Equity Explanation
Return-on-Tangible-Equity measures the rate of return on the ownership interest (shareholder's tangible equity) of the common stock owners. It measures a firm's efficiency at generating profits from every unit of shareholders' tangible equity (shareholders equity minus intangibles). Return-on-Tangible-Equity shows how well a company uses investment funds to generate earnings growth. Return-on-Tangible-Equitys between 15% and 20% are considered desirable.
Be Aware
Net Income is used.
Because a company can increase its Return-on-Tangible-Equity by having more financial leverage, it is important to watch the leverage ratio when investing in high Return-on-Tangible-Equity companies. Like Return-on-Tangible-Asset, Return-on-Tangible-Equity is calculated with only 12 months data. Fluctuations in company's earnings or business cycles can affect the ratio drastically. It is important to look at the ratio from a long term perspective.
Asset light businesses require very few assets to generate very high earnings. Their Return-on-Tangible-Equitys can be extremely high.
Energy Recovery Return-on-Tangible-Equity Related Terms
Energy Recovery Return-on-Tangible-Equity Historical Data
* Premium members only.
The historical data trend for Energy Recovery's Return-on-Tangible-Equity 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.
ERII vs ARQ, FTEK, BCHT: Return-on-Tangible-Equity Comparison
For the Pollution & Treatment Controls subindustry, Energy Recovery's Return-on-Tangible-Equity, along with its competitors' market caps and Return-on-Tangible-Equity 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 Return-on-Tangible-Equity vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Energy Recovery's Return-on-Tangible-Equity distribution charts can be found below:
* The bar in red indicates where Energy Recovery's Return-on-Tangible-Equity falls into.
* 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.
In the calculation of annual Return-on-Tangible-Equity, the net income of the last fiscal year and the average total shareholder tangible equity over the fiscal year are used. In calculating the quarterly data,
the net income data used here is four times the quarterly (Mar. 2026) net income data.
Return-on-Tangible-Equity is displayed in the 10-year financial page.
What does a Return-on-Tangible-Equity of -26.74% mean?
Energy Recovery (ERII) has a Return-on-Tangible-Equity of -26.74% as of Mar. 2026. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Energy Recovery and its competitors. Over the past decade, Energy Recovery's Return-on-Tangible-Equity has ranged from 7.53 to 28.62. According to the industry distribution chart, Energy Recovery ranks #941 out of 2971 companies in the Industrial Products industry, placing it in the top 31.7%.
Is Energy Recovery's Return-on-Tangible-Equity too high?
Energy Recovery's current Return-on-Tangible-Equity is -26.74%. Over the past 10 years, this metric has ranged from a low of 7.53 to a high of 28.62. Based on the distribution chart, Energy Recovery ranks #941 out of 2971 companies in the Industrial Products industry, which is above the industry midpoint. Overall, Energy Recovery has a GF Score™ of 71/100 and is considered Significantly Undervalued, reflecting its overall financial health beyond just this single metric.
How does Energy Recovery's Return-on-Tangible-Equity compare to ARQ and FTEK?
According to the Industrial Products industry distribution chart, Energy Recovery ranks #941 out of 2971 companies for Return-on-Tangible-Equity. This puts Energy Recovery in the upper half of its industry. The industry median Return-on-Tangible-Equity is 6.74. Historically, Energy Recovery's own Return-on-Tangible-Equity has ranged from 7.53 to 28.62 over the past decade. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Return-on-Tangible-Equity for an Industrial Products company?
The median Return-on-Tangible-Equity among Industrial Products companies is 6.74, based on 2,971 companies in the industry. Companies in the top quartile (top 25%) have a Return-on-Tangible-Equity significantly above this median, while those in the bottom quartile fall well below. However, Return-on-Tangible-Equity should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Return-on-Tangible-Equity mean?
A high Return-on-Tangible-Equity can signal that a stock is expensive relative to its fundamentals. Return on tangible equity is the ratio of current-period net income to average two-period tangible equity. View historical data on Energy Recovery and its competitors. For the Industrial Products industry, the median Return-on-Tangible-Equity is 6.74 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Energy Recovery's current Return-on-Tangible-Equity is -26.74%. 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 $14.78, compared to a current price of $8.81 — trading 40.4% below its estimated fair value. The current Return-on-Tangible-Equity is -26.74%. Energy Recovery's overall GF Score™ is 71/100 with 5 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Return-on-Tangible-Equity calculated?
Return-on-Tangible-Equity is calculated from a company's financial statements. For Energy Recovery (ERII), the current Return-on-Tangible-Equity is -26.74% as of Mar. 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 $8.81 is trading 40.4% below its estimated GF Value™ of $14.78.
GuruFocus considers Energy Recovery to be Significantly Undervalued.
Key valuation signals for ERII:
Return-on-Tangible-Equity: -26.74%
GF Value™: $14.78 vs. price of $8.81 (40.4% below fair value)
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.
71GF Score
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