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 $342.5M against $104.8M — 3.3× the size. Arq, Inc. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 66.7×. Arq, Inc. grew revenue faster over the last twelve months: 7.32% against −26.2%. Energy Recovery, Inc. has the higher net margin (5.15% vs −38.6%) and the higher return on invested capital (0.59% vs −15.9%). 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 66.70 —
P/S 0.80 3.41 2.50
P/B 0.59 2.07 3.39
Price to free cash flow n/m 10.48 —
EV/EBITDA 22.94 15.10 18.45
EV/Sales 0.96 2.71 2.74
Earnings yield (49.58%) 1.50% (14.48%)
Free cash flow yield (4.33%) 9.55% (11.96%)

Profitability

Metric ARQ ERII Pollution & Treatment Controls median
Gross margin 32.08% 60.96% 32.15%
Operating margin (38.64%) 0.78% (17.50%)
Net margin (38.60%) 5.15% (17.98%)
Free cash flow margin 3.89% 35.25% (10.60%)
Return on equity (25.12%) 2.97% (36.99%)
Return on assets (19.11%) 2.56% (24.89%)
Return on invested capital (15.89%) 0.59% (0.06%)

Growth

Metric ARQ ERII Pollution & Treatment Controls median
Revenue growth (TTM) 7.32% (26.20%) 8.69%
EPS growth (last fiscal year) (807.14%) 5.00% 11.29%
Revenue growth, 5-year CAGR 12.30% 2.56% 12.30%
Net income growth, 5-year CAGR 0.00% (2.74%) 0.00%

Health

Metric ARQ ERII Pollution & Treatment Controls median
Debt to equity 0.16 0.00 0.07
Current ratio 1.20 7.22 1.84
Net debt to EBITDA 5.61 (2.75) 0.50

Dividend

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

Size

Metric ARQ ERII Pollution & Treatment Controls median
Market cap 104.81m 342.51m 62.87m

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