Energy Recovery, Inc. (ERII) vs 374Water Inc. (SCWO)

Energy Recovery, Inc. and 374Water Inc. are both Pollution & Treatment Controls companies. Energy Recovery, Inc. is the larger, with a market value of $353.2M against $54.8M — 6.5× the size. 374Water Inc. has negative trailing earnings, so its P/E is not meaningful; Energy Recovery, Inc. trades at 23.5×. 374Water Inc. grew revenue faster over the last twelve months: 53.5% against −15.0%. Energy Recovery, Inc. has the higher net margin (12.7% vs −1,056.2%) and the higher return on invested capital (11.2% vs −297.2%). Across the 19 metrics below, Energy Recovery, Inc. leads on 16 and 374Water Inc. on 3.

Valuation

Metric ERII SCWO Pollution & Treatment Controls median
P/E 23.48 n/m —
P/S 2.91 28.04 3.64
P/B 2.03 17.75 2.08
Price to free cash flow 9.08 n/m —
EV/EBITDA 15.16 n/m 17.68
EV/Sales 2.25 28.90 4.26
Earnings yield 4.26% (40.81%) (18.01%)
Free cash flow yield 11.02% (21.42%) (5.86%)

Profitability

Metric ERII SCWO Pollution & Treatment Controls median
Gross margin 64.01% 6.25% 34.73%
Operating margin 11.81% (1,002.21%) (29.01%)
Net margin 12.72% (1,056.18%) (31.94%)
Free cash flow margin 32.02% (595.30%) (12.20%)
Return on equity 8.58% (335.45%) (38.24%)
Return on assets 7.48% (157.47%) (26.06%)
Return on invested capital 11.20% (297.16%) 0.00%

Growth

Metric ERII SCWO Pollution & Treatment Controls median
Revenue growth (TTM) (14.95%) 53.49% 9.79%
EPS growth (last fiscal year) 5.00% (53.33%) —
Revenue growth, 5-year CAGR 2.56% 19.95% 8.56%
Net income growth, 5-year CAGR (2.74%) 0.00% 0.00%

Health

Metric ERII SCWO Pollution & Treatment Controls median
Debt to equity 0.00 0.93 0.03
Current ratio 8.05 1.67 1.90
Net debt to EBITDA (2.75) 0.12 0.30

Dividend

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

Size

Metric ERII SCWO Pollution & Treatment Controls median
Market cap 353.23m 54.75m 48.08m

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