Zurn Elkay Water Solutions Corp. (ZWS)
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
$47.61-0.02%
Close 2026-09-04 · 1-day change
NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-04
Intact: The reason to own it still holds.
Zurn Elkay grows revenue about 8-9% yearly. Profit margins stay near 27%. Free cash flow is strong at $335 million. The company steadily raises dividends to reward shareholders.
Revenue growth could slow below 5%. Profit margins might fall under 27%. Dividend increases may stall if cash flow weakens.
The price is about 9% above our fair value near $44. Analysts expect about 5.5% revenue growth, which is slightly below our 8-9% target. Our fair value is 22% below the Street median, reflecting a more cautious view.
Breaks if: dividend per share growth stalls or declines in FY26
Grow the quarterly dividend per share, reflecting confidence in cash flow and capital allocation discipline.
This is not a price target or investment advice.
A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.
This investment represents a stable growth opportunity with a focus on revenue and margin expansion. The current thesis state is intact, supported by recent strong financial results, but confidence has shifted to medium due to potential sector challenges.
The market appears to have priced in a low level of fragility, reflecting a justified valuation. There is a slight expectations gap, indicating that investors may anticipate continued stable performance without significant surprises.
Management is on track with priorities to increase revenue growth, enhance operating income, and increase dividends. Recent financial performance has been strong, with core sales growth and improved margins, although there is a moderate risk of missing future guidance.
The thesis hinges on the performance of sector bellwethers like GEV, PH, and TT. If these companies continue to perform well, ZWS may benefit from sector momentum. Conversely, any negative guidance from these peers could impact ZWS negatively.
The most important moves since the prior daily snapshot.
Our read on the company is unchanged since the prior snapshot.
as of 2026-09-04
Review the evidence to watch, what would become a concern, and what would make it less concerning.
Not investment advice. Scores describe historical and current data; they are not forecasts of future returns. Consult a licensed advisor before making investment decisions.
Stated as a priority in 4 of last 4 quarters. Dividend per share increased from $0.08 in 2025-Q1 to $0.11 in 2026-Q4, with $37 million paid in dividends in first half 2026. This reflects management's consistent commitment to returning capital to shareholders and disciplined capital allocation.
“Paid $37 million in dividends in first half of 2026; dividend per share increased to $0.11 in Q4 2026.”
“Dividend per share was $0.09 in Q1 2026, up from $0.08 in 2025-Q1.”
“Dividend per share was $0.09 in Q4 2025, up from $0.08 in 2025-Q1.”
“Dividend per share was $0.09 in Q2 2025, up from $0.08 in 2025-Q1.”
Breaks if: free cash flow falls below $300 million in FY26
Breaks if: gross margin falls below 26% next quarter
Breaks if: YoY revenue growth falls below 5% in FY26
Drive mid-single digit core sales growth for the full year 2026 and continue above-market growth through new products and acquisitions.
Stated as a priority in 4 of last 4 quarters. Core sales grew 11% in 2026-Q1 and 10% in 2026-Q2 year over year. Management expects mid-single digit core sales growth for full year 2026, consistent with the trajectory of above-market growth and new product launches. The company is delivering on revenue growth commitments.
“Core sales (1) grew 10% and adjusted EBITDA margins expanded by 120 basis points over prior year Q2.”
“First quarter core sales (1) grew 11% year over year.”
“Core sales (1) growth of 10% in Q4 2025.”
“We are confident in our ability to drive mid-single digit core sales (1) growth for full year 2026.”
Over the next 1 to 3 years, ZWS's performance will depend on both its execution and the broader industrial sector's health. Not investment advice.