Energy RecoveryERII -1.19%71 Altman Z-Score is 13.62 as of Jun. 24, 2026, which is 17% below its 10-year median of 16.45. GuruFocus rates ERII with a GF Score™ of 71/100 and a GF Value™ of $14.81 (Significantly Undervalued). The stock has 5 warning signs investors should review. Among 3,013 Industrial Products companies, Energy Recovery ranks better than 91.77% on this metric.
The Altman Z-Score is a model designed to predict the likelihood of a company going bankrupt within the next two years. Created by American finance professor Edward Altman in 1968, the model is specifically designed for publicly traded manufacturing companies with assets greater than $1 million.
Good Sign:
Altman Z-score of 13.75 is strong.
Energy Recovery has a Altman Z-Score of 13.62, indicating it is in Safe Zones. This implies the Altman Z-Score is strong.
The zones of discrimination were as such:
When Altman Z-Score <= 1.8, it is in Distress Zones.
When Altman Z-Score >= 3, it is in Safe Zones.
When Altman Z-Score is between 1.8 and 3, it is in Grey Zones.
The historical rank and industry rank for Energy Recovery's Altman Z-Score or its related term are showing as below:
ERII'
s Altman Z-Score Range Over the Past 10 Years
Min: 3.87 Med: 16.45 Max: 35.73
Current: 13.75
During the past 13 years, Energy Recovery's highest Altman Z-Score was 35.73. The lowest was 3.87. And the median was 16.45.
Energy Recovery (NAS:ERII) Altman Z-Score Explanation
X1: The Working Capital/Total Assets (WC/TA) ratio is a measure of the net liquid assets of the firm relative to the total capitalization. Working capital is defined as the difference between current assets and current liabilities. Ordinarily, a firm experiencing consistent operating losses will have shrinking current assets in relation to total assets. Altman found this one proved to be the most valuable liquidity ratio comparing with the current ratio and the quick ratio. This is however the least significant of the five factors.
X2: Retained Earnings/Total Assets: the RE/TA ratio measures the leverage of a firm. Retained earnings is the account which reports the total amount of reinvested earnings and/or losses of a firm over its entire life. Those firms with high RE, relative to TA, have financed their assets through retention of profits and have not utilized as much debt.
X3, Earnings Before Interest and Taxes/Total Assets (EBIT/TA): This ratio is a measure of the true productivity of the firm's assets, independent of any tax or leverage factors. Since a firm's ultimate existence is based on the earning power of its assets, this ratio appears to be particularly appropriate for studies dealing with corporate failure. This ratio continually outperforms other profitability measures, including cash flow.
X4, Market Value of Equity/Book Value of Total Liabilities (MVE/TL): The measure shows how much the firm's assets can decline in value (measured by market value of equity plus debt) before the liabilities exceed the assets and the firm becomes insolvent.
X5, Revenue/Total Assets (S/TA): The capital-turnover ratio is a standard financial ratio illustrating the sales generating ability of the firm's assets.
Altman Z-Score does not apply to financial companies.
Energy Recovery Altman Z-Score Related Terms
Energy Recovery Altman Z-Score Historical Data
* Premium members only.
The historical data trend for Energy Recovery's Altman Z-Score 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: Altman Z-Score Comparison
For the Pollution & Treatment Controls subindustry, Energy Recovery's Altman Z-Score, along with its competitors' market caps and Altman Z-Score 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 Altman Z-Score vs Industrial Products Industry
For the Industrial Products industry and Industrials sector, Energy Recovery's Altman Z-Score distribution charts can be found below:
* The bar in red indicates where Energy Recovery's Altman Z-Score falls into.
Altman Z-Score model is an accurate forecaster of failure up to two years prior to distress. It can be considered the assessment of the distress of industrial corporations.
Energy Recovery's Altman Z-Score for today is calculated with this formula:
Z
=
1.2
*
X1
+
1.4
*
X2
+
3.3
*
X3
+
0.6
*
X4
+
1.0
*
X5
=
1.2
*
0.6877
+
1.4
*
0.5571
+
3.3
*
0.1199
+
0.6
*
18.2682
+
1.0
*
0.6538
=
13.62
* 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. GuruFocus does not calculate Altman Z-Score when X4 or X5 value is 0.
Energy Recovery (ERII) has a Altman Z-Score of 13.62 as of Jun. 24, 2026. The Altman Z-score measures a company's bankruptcy risk. View historical data on Energy Recovery and its competitors. This is 17% below median its historical median of 16.45. Over the past decade, Energy Recovery's Altman Z-Score has ranged from 3.87 to 35.73. According to the industry distribution chart, Energy Recovery ranks #248 out of 3013 companies in the Industrial Products industry, placing it in the top 8.2%.
Is Energy Recovery's Altman Z-Score too high?
Energy Recovery's current Altman Z-Score of 13.62 is 17% below median its 10-year median of 16.45. Over the past 10 years, this metric has ranged from a low of 3.87 to a high of 35.73. The Industrial Products industry median Altman Z-Score is 3.42. Energy Recovery's value of 13.62 is 298.2% above this industry median. Based on the distribution chart, Energy Recovery ranks #248 out of 3013 companies in the Industrial Products industry, which is in the top quartile — a strong position relative to peers. 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 Altman Z-Score compare to ARQ and FTEK?
According to the Industrial Products industry distribution chart, Energy Recovery ranks #248 out of 3013 companies for Altman Z-Score. This places Energy Recovery in the top 8% of its industry — outperforming the majority of peers. The industry median Altman Z-Score is 3.42. Energy Recovery's value of 13.62 is 298.2% above this benchmark. Historically, Energy Recovery's own Altman Z-Score has ranged from 3.87 to 35.73 over the past decade. While the company's 10-year median is 16.45 vs. the industry median of 3.42, 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 Altman Z-Score for an Industrial Products company?
The median Altman Z-Score among Industrial Products companies is 3.42, based on 3,013 companies in the industry. Companies in the top quartile (top 25%) have a Altman Z-Score significantly above this median, while those in the bottom quartile fall well below. However, Altman Z-Score should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Energy Recovery's current Altman Z-Score of 13.62 is 298.2% 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 Altman Z-Score mean?
A high Altman Z-Score can signal that a stock is expensive relative to its fundamentals. The Altman Z-score measures a company's bankruptcy risk. View historical data on Energy Recovery and its competitors. For the Industrial Products industry, the median Altman Z-Score is 3.42 — values significantly above this may indicate overvaluation, while values below may suggest a bargain or underlying issues. Energy Recovery's current Altman Z-Score is 13.62, which is 17% below median its own 10-year median of 16.45. 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 $14.81, compared to a current price of $8.77 — trading 40.8% below its estimated fair value. The current Altman Z-Score is 13.62, which is 17% below median its 10-year median of 16.45 and 298.2% above the Industrial Products industry median of 3.42. 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 Altman Z-Score calculated?
Altman Z-Score is calculated from a company's financial statements. For Energy Recovery (ERII), the current Altman Z-Score is 13.62 as of Jun. 24, 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 $8.77 is trading 40.8% below its estimated GF Value™ of $14.81.
GuruFocus considers Energy Recovery to be Significantly Undervalued.
Key valuation signals for ERII:
Altman Z-Score: 13.62 (17% below median its 10-year median of 16.45)
GF Value™: $14.81 vs. price of $8.77 (40.8% below fair value)
Industry Position: 298.2% above the Industrial Products median (#248 of 3013)
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
Get the complete analysis for ERII
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