Zurn Elkay Water Solutions Corp. (ZWS)

NYSEIndustrialsIndustrial - MachinerySnapshot 2026-09-09

$46.63-1.48%

Close 2026-09-09 · 1-day change

Standing thesis

The standing, falsifiable read: what has to stay true, and what would break it.

Compounder

Intact: The reason to own it still holds.

The bull case

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.

The bear case

Revenue growth could slow below 5%. Profit margins might fall under 27%. Dividend increases may stall if cash flow weakens.

What's priced in

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.

What has to stay true

steady dividend per share increaseIntact
Capital Allocationsupportingdividend per share increases by at least 10% annually · FY26 (qualitative)
Breaks if: dividend per share growth stalls or declines in FY26
Are they delivering?On Track this quarter· 1 tracked commitment
- Increase dividend per shareCapital allocation
  Grow the quarterly dividend per share, reflecting confidence in cash flow and capital allocation discipline.
  On Track

Source: QuarterlyIQ research model· Written 2026-07-08· Health checked 2026-09-09· Version 1· Status: Intact· Reviewed when the evidence changes

This is not a price target or investment advice.

Current Outlook

Week of Sep 5, 2026

A long-form read on the 1–3 year hold thesis. It updates when the weekly evidence changes.

ZWS shows strong recent performance but faces sector headwinds and execution risks.

What kind of bet this is

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.

What's priced into Zurn Elkay Water Solutions Corp. (ZWS)

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.

What the fundamentals likely do

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.

What Zurn Elkay Water Solutions Corp. (ZWS) hinges on

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.

What changed in the latest read

What changed

The most important moves since the prior daily snapshot.

Short-term · Daily

label change · confidence_label
small change
Confidence changed from 'high' to 'medium'.

No, our read on the company is unchanged. The recent financial performance remains strong. The confidence label changed from 'high' to 'medium'. This indicates a slight increase in uncertainty about the company's outlook.

as of 2026-09-09

See upcoming information that could change the risk

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.