Arq, Inc. (ARQ) vs Energy Recovery, Inc. (ERII)

Arq, Inc. and Energy Recovery, Inc. are both Pollution & Treatment Controls companies. Energy Recovery, Inc. is the larger, with a market value of $353.2M against $87.8M — 4.0× the size. Arq, Inc. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 23.5×. Arq, Inc. grew revenue faster over the last twelve months: 4.93% against −15.0%. Energy Recovery, Inc. has the higher net margin (12.7% vs −42.1%) and the higher return on invested capital (11.2% vs −16.7%). Across the 20 metrics below, Energy Recovery, Inc. leads on 14 and Arq, Inc. on 6.

Valuation

Metric ARQ ERII Pollution & Treatment Controls median
P/E n/m 23.48 —
P/S 0.69 2.91 3.64
P/B 0.51 2.03 2.08
Price to free cash flow n/m 9.08 —
EV/EBITDA 21.73 15.16 17.68
EV/Sales 0.93 2.25 4.26
Earnings yield (62.16%) 4.26% (18.01%)
Free cash flow yield (11.06%) 11.02% (5.86%)

Profitability

Metric ARQ ERII Pollution & Treatment Controls median
Gross margin 28.80% 64.01% 34.73%
Operating margin (42.84%) 11.81% (29.01%)
Net margin (42.14%) 12.72% (31.94%)
Free cash flow margin (0.09%) 32.02% (12.20%)
Return on equity (27.02%) 8.58% (38.24%)
Return on assets (20.10%) 7.48% (26.06%)
Return on invested capital (16.69%) 11.20% 0.00%

Growth

Metric ARQ ERII Pollution & Treatment Controls median
Revenue growth (TTM) 4.93% (14.95%) 9.79%
EPS growth (last fiscal year) (807.14%) 5.00% —
Revenue growth, 5-year CAGR 12.30% 2.56% 8.56%
Net income growth, 5-year CAGR 0.00% (2.74%) 0.00%

Health

Metric ARQ ERII Pollution & Treatment Controls median
Debt to equity 0.18 0.00 0.03
Current ratio 1.03 8.05 1.90
Net debt to EBITDA 5.61 (2.75) 0.30

Dividend

Metric ARQ ERII Pollution & Treatment Controls median
Dividend yield — — —
Payout ratio 0.00 0.00 0.00

Size

Metric ARQ ERII Pollution & Treatment Controls median
Market cap 87.77m 353.23m 48.08m

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