Technicals Say Energy Recovery Inc. (ERII) Is Worth Holding


As of Wednesday close, Energy Recovery Inc.’s (NASDAQ:ERII) stock was up $0.67, moving up 3.11 percent to $22.20. The average number of shares traded per day over the past five days has been 317,620 shares. 2 times new highs have been achieved over the past 5 days, with a $1.27 gain in that time frame. In the last twenty days, the average volume was 602,130, while in the previous 50 days, it was 545,368.

Since last month, ERII stock retreated -9.17%. Shares of the company fell to $17.32 on 11/07/22, the lowest level in the past month. A 52-week high of $26.34 was reached on 11/02/22 after having rallying from a 52-week low of $16.92. Since the beginning of this year, ERII’s stock price has risen by 3.30% or $0.71, and marked a new high 16 times. However, the stock has declined by -15.72% since its 52-week high.

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ERII stock investors should be aware that Energy Recovery Inc. (ERII) stock had its last reported insider trading activity 8 days ago on Nov 16. Hanstveit Arve, the Director of the company, disposed of 17,236 shares for $20.93 on Nov 16. It resulted in a $360,808 divestment by the insider. Foda Sherif sold 15,879 shares at an average price of $25.50 on Sep 14. The insider now owns 9,619 shares following the transaction. On Aug 09, President and CEO MAO ROBERT YU LANG sold 2,000 shares at $22.46 apiece. The transaction was valued at $44,927.

Valuation Metrics

Right now, Energy Recovery Inc. (ERII) has a P/E ratio of about 83.15. The stock’s beta is 1.13. Besides these, the trailing price-to-sales (P/S) ratio of 10.51, the price-to-book (PB) ratio of 7.33, and the price-to-cash flow ratio of 159.55 may also be considered.

Financial Health

In the three months ended June 29, Energy Recovery Inc.’s quick ratio stood at 6.30, while its current ratio was 8.20, showing that the company is able to pay off its debt. On the profitability front, the trailing twelve-month gross margin is 69.00% percent. In the year ended June 29, operating margins totaled 13.90%. Based on annual data, ERII earned $71.23 million in gross profit and brought in $103.9 million in revenue.

A company’s management is another factor that investors consider when determining the profitability of an investment. In the past year, return on investment (ROI) was 7.90%. Return on equity (ROE) for the past 12 months was 9.00%.

According to the earnings report, the company had a higher net income in the recent quarter than it did in the previous quarter. ERII’s revenue rose 31.78% to $20.29 million during the quarter, while net income inched up to $30.46 million. While analysts expected Energy Recovery Inc. to report -$0.04 quarterly earnings, the actual figure was -$0.04 per share. During the quarter, the company generated $6.34 million in EBITDA. The liabilities of Energy Recovery Inc. were 30.82 million at the end of its most recent quarter ended June 29, and its total debt was $15.68 million. The value of shareholders’ equity is $56.0 million.

Technical Picture

This quick technical analysis looks at Energy Recovery Inc.’s (ERII) price momentum. With a historical volatility rate of 25.77%, the RSI 9-day stood at 57.46% on 23 November.

With respect to its five-day moving average, the current Energy Recovery Inc. price is up by +6.07% percent or $1.27. At present, ERII shares trade -10.09% below its 20-day simple moving average and +15.81% percent above its 100-day simple moving average. However, the stock is currently trading approximately -12.63% below its SMA50 and +15.69% above its SMA200.

Stochastic coefficient K was 67.59% and Stochastic coefficient D was 53.42%, while ATR was 0.95. Given the Stochastic reading of 98.99% for the 14-day period, the RSI (14) reading has been calculated as 52.71%. As of today, the MACD Oscillator reading stands at 0.41, while the 14-day reading stands at 1.00.

Analyst Ratings

B. Riley Securities launched its rating on Energy Recovery Inc. (NASDAQ: ERII) to a Buy in a note to investors on November 17, 2022. Energy Recovery Inc. (ERII) has been rated Overweight by analysts. According to 0 brokerage firms, ERII is a sell, and 1 firms recommend it is a Hold. There are 0 analysts who say the stock is underweight. A total of 1 analyst rate Energy Recovery Inc. stock as buy, with 2 recommending it as overweight.

With a median target price of $24.50, the current consensus forecast for the stock is $22.00 – $28.00. Based on these forecasts, analysts predict Energy Recovery Inc. (ERII) will achieve an average price target of $24.75.


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