Breaking Down Zurn Elkay Water Solutions Corporation (ZWS) Financial Health: Key Insights for Investors

Are you keeping a close watch on companies dedicated to sustainable water solutions? Have you considered how their financial health impacts their ability to innovate and expand? Zurn Elkay Water Solutions Corporation (ZWS) reported impressive figures for 2024, including net sales of $1.41 billion, a 3.7% increase from the previous year, and an adjusted EBITDA of $371.9 million, marking a 7.5% rise. But what do these numbers really tell us about the company's stability and prospects? Let's delve into the key financial insights that investors should consider.

Zurn Elkay Water Solutions Corporation (ZWS) Revenue Analysis

To understand the financial health of Zurn Elkay Water Solutions Corporation (ZWS), a detailed analysis of its revenue streams is essential. This involves examining where the company's money comes from, how quickly its revenue is growing, and how different parts of the business contribute to the total revenue.

Zurn Elkay Water Solutions Corporation (ZWS) reported net sales of $1.42 billion for the fiscal year 2024. Here’s a breakdown:

• Zurn Water Solutions: Net sales were $1.1 billion, up 1.8% organically. This segment focuses on water safety and control.
• Elkay Interior Systems: Net sales totaled $324 million, reflecting a 4.8% organic decrease. This segment includes commercial interiors.

Here is a table summarizing the revenue streams for 2024:

Zurn Elkay Water Solutions Corporation (ZWS) saw a consolidated net sales increase of 0.4% organically in fiscal year 2024. The Zurn Water Solutions segment experienced growth, while Elkay Interior Systems faced a decline. Understanding these dynamics is crucial for investors. More information about the company's values can be found at Mission Statement, Vision, & Core Values of Zurn Elkay Water Solutions Corporation (ZWS).

Zurn Elkay Water Solutions Corporation (ZWS) Profitability Metrics

Analyzing the profitability of Zurn Elkay Water Solutions Corporation (ZWS) involves examining several key metrics that provide insights into the company's financial health and operational efficiency. These metrics include gross profit, operating profit, and net profit margins. By evaluating these figures, investors can gain a comprehensive understanding of ZWS's ability to generate profits from its revenue and manage its expenses effectively.

Gross profit is the profit a company makes after deducting the costs associated with producing and selling its goods or services. As of the fiscal year 2024, Zurn Elkay Water Solutions Corporation (ZWS) reported a gross profit of $798.2 million. This figure is derived from a revenue of $1.43 billion and a cost of goods sold (COGS) of $635.7 million.

The gross profit margin, calculated as gross profit divided by revenue, indicates the percentage of revenue remaining after accounting for the cost of goods sold. For ZWS in 2024, the gross profit margin stands at approximately 55.7%. This suggests that for every dollar of revenue, ZWS retains about 55.7 cents after covering its production costs.

Operating profit, also known as earnings before interest and taxes (EBIT), is calculated by deducting operating expenses from gross profit. Operating expenses include costs such as sales, general, and administrative expenses, as well as research and development costs. In 2024, Zurn Elkay Water Solutions Corporation (ZWS) reported an operating profit of $249.3 million.

The operating profit margin, calculated as operating profit divided by revenue, measures the percentage of revenue remaining after accounting for both production costs and operating expenses. For ZWS in 2024, the operating profit margin is approximately 17.4%. This indicates the company's efficiency in managing its operations and generating profit from its core business activities.

Net profit, also known as net income, is the profit a company makes after deducting all expenses, including interest and taxes, from its revenue. In 2024, Zurn Elkay Water Solutions Corporation (ZWS) reported a net profit of $148.8 million.

The net profit margin, calculated as net profit divided by revenue, represents the percentage of revenue remaining after all expenses have been paid. For ZWS in 2024, the net profit margin is approximately 10.4%. This figure reflects the company's overall profitability and its ability to convert revenue into profit for shareholders.

Here's a summary of Zurn Elkay Water Solutions Corporation (ZWS)'s profitability metrics for 2024:

Trends in profitability over time can reveal important insights into a company's performance and its ability to adapt to changing market conditions. By comparing profitability ratios over several periods, investors can identify patterns and assess the sustainability of a company's earnings.

Comparison of profitability ratios with industry averages provides a benchmark for evaluating a company's performance relative to its peers. If a company's profitability ratios are consistently higher than the industry average, it may indicate a competitive advantage or superior management practices.

Analysis of operational efficiency, such as cost management and gross margin trends, can provide insights into a company's ability to control its expenses and improve its profitability. Effective cost management can lead to higher gross margins and improved overall profitability.

Understanding these profitability metrics is crucial for investors seeking to make informed decisions about Zurn Elkay Water Solutions Corporation (ZWS). These metrics offer a clear view of the company's financial performance and its capacity to generate sustainable profits. You might also be interested in Mission Statement, Vision, & Core Values of Zurn Elkay Water Solutions Corporation (ZWS).

Zurn Elkay Water Solutions Corporation (ZWS) Debt vs. Equity Structure

Understanding how Zurn Elkay Water Solutions Corporation (ZWS) finances its operations and growth is crucial for investors. The balance between debt and equity reveals insights into the company's financial strategy, risk profile, and long-term sustainability. Let's delve into ZWS's debt levels, ratios, and financing activities.

Zurn Elkay Water Solutions Corporation (ZWS) showcases a strategic approach to managing its debt. As of December 31, 2023, the company reported total debt of $961.7 million. This debt is categorized into:

• Long-term debt: $958.7 million
• Short-term debt: $3.0 million

The company's approach to debt management can be further understood by examining its debt-to-equity ratio. As of December 31, 2023, the debt-to-equity ratio stood at 1.14. This ratio provides insight into how much debt Zurn Elkay Water Solutions Corporation (ZWS) uses to finance its assets relative to the value of shareholders' equity. Here's a snapshot of the company's debt and equity composition:

Zurn Elkay Water Solutions Corporation (ZWS) actively manages its debt through issuances and refinancing activities to optimize its capital structure. On February 14, 2023, ZWS issued $500 million aggregate principal amount of 5.000% Senior Notes due 2033. The proceeds from the 2033 Notes were used to repay amounts outstanding under the Existing Revolving Credit Facility and to pay related fees and expenses. This move aimed to extend debt maturities and reduce borrowing costs, reflecting a proactive approach to financial management.

The company balances debt financing with equity funding to maintain financial flexibility and support growth initiatives. While debt can provide leverage and potentially enhance returns, equity funding strengthens the balance sheet and reduces financial risk. Zurn Elkay Water Solutions Corporation (ZWS)'s strategy involves:

• Strategic debt issuances to fund specific projects or acquisitions.
• Maintaining a healthy debt-to-equity ratio to ensure financial stability.
• Utilizing equity offerings to strengthen the capital base and support long-term growth.

For more insights into Zurn Elkay Water Solutions Corporation (ZWS), check out: Exploring Zurn Elkay Water Solutions Corporation (ZWS) Investor Profile: Who’s Buying and Why?

Zurn Elkay Water Solutions Corporation (ZWS) Liquidity and Solvency

Liquidity and solvency are vital indicators of a company's financial health, revealing its ability to meet short-term obligations and sustain long-term operations. For investors and stakeholders in Zurn Elkay Water Solutions Corporation (ZWS), a thorough examination of these metrics provides crucial insights into the company's stability and risk profile. Here's an analysis of ZWS's liquidity, working capital, and cash flow trends.

Assessing Zurn Elkay Water Solutions Corporation (ZWS)'s Liquidity:

Liquidity ratios offer a snapshot of Zurn Elkay Water Solutions Corporation’s capacity to cover its immediate liabilities. Key ratios include the current ratio and the quick ratio.

• Current Ratio: The current ratio, calculated by dividing current assets by current liabilities, indicates whether a company has enough short-term assets to cover its short-term debts.
• Quick Ratio: The quick ratio, also known as the acid-test ratio, is a more conservative measure that excludes inventories from current assets to provide a clearer view of a company's ability to meet its short-term obligations with its most liquid assets.

Analysis of Working Capital Trends:

Working capital, the difference between a company's current assets and current liabilities, is a fundamental measure of its short-term financial health. Monitoring trends in working capital provides insights into Zurn Elkay Water Solutions Corporation's operational efficiency and liquidity management. Declining working capital may signal potential challenges in meeting short-term obligations, while increasing working capital could indicate improved liquidity and operational performance.

Cash Flow Statements Overview:

Cash flow statements provide a detailed view of how Zurn Elkay Water Solutions Corporation (ZWS) generates and uses cash through its operations, investments, and financing activities.

• Operating Cash Flow: Cash flow from operating activities reflects the cash generated from the company's core business operations.
• Investing Cash Flow: Cash flow from investing activities includes transactions related to the purchase and sale of long-term assets, such as property, plant, and equipment (PP&E).
• Financing Cash Flow: Cash flow from financing activities involves transactions related to debt, equity, and dividends.

Analyzing these cash flow trends helps in understanding Zurn Elkay Water Solutions Corporation's ability to fund its operations, invest in growth opportunities, and return value to shareholders.

Potential Liquidity Concerns or Strengths:

Based on the analysis of liquidity ratios, working capital trends, and cash flow statements, it’s essential to identify potential liquidity concerns or strengths for Zurn Elkay Water Solutions Corporation (ZWS). Consistent positive operating cash flow, healthy liquidity ratios, and effective working capital management would indicate financial strength. Conversely, declining cash flow, deteriorating liquidity ratios, or inefficient working capital management could raise concerns about the company's ability to meet its financial obligations.

Here you can find more about Zurn Elkay Water Solutions Corporation (ZWS)'s Financial Health: Breaking Down Zurn Elkay Water Solutions Corporation (ZWS) Financial Health: Key Insights for Investors

Zurn Elkay Water Solutions Corporation (ZWS) Valuation Analysis

Determining whether Zurn Elkay Water Solutions Corporation (ZWS) is overvalued or undervalued involves analyzing several key financial metrics and market indicators. These include price-to-earnings (P/E), price-to-book (P/B), and enterprise value-to-EBITDA (EV/EBITDA) ratios, stock price trends, dividend yield and payout ratios (if applicable), and analyst consensus.

As of April 21, 2025, up-to-date valuation data for Zurn Elkay Water Solutions Corporation (ZWS) is essential for an accurate assessment. Investors should consider the following factors:

• Price-to-Earnings (P/E) Ratio: Compare ZWS's P/E ratio to its industry peers and historical average. A high P/E ratio might suggest overvaluation, while a low one could indicate undervaluation.
• Price-to-Book (P/B) Ratio: This ratio compares a company's market capitalization to its book value of equity. A lower P/B ratio can suggest undervaluation, but it should be assessed in conjunction with other metrics.
• Enterprise Value-to-EBITDA (EV/EBITDA) Ratio: This ratio is often used to value companies with significant debt. A lower EV/EBITDA ratio compared to peers could indicate undervaluation.

Analyzing the trend of ZWS's stock price over the last 12 months (or longer) provides insights into market sentiment and investor confidence. Significant price appreciation could indicate that the stock is becoming overvalued, while a decline might suggest undervaluation.

If ZWS distributes dividends, the dividend yield (annual dividend per share divided by the stock price) and payout ratio (percentage of earnings paid out as dividends) are important. A high dividend yield might attract investors, but a high payout ratio could be unsustainable.

Investors often consider the consensus of financial analysts covering ZWS. These analysts provide ratings (buy, hold, or sell) and price targets, reflecting their overall valuation assessment of the stock. The consensus can provide a summarized view of expert opinions.

Comprehensive valuation involves comparing these metrics against industry benchmarks, historical data, and future growth prospects. For deeper insights, explore: Breaking Down Zurn Elkay Water Solutions Corporation (ZWS) Financial Health: Key Insights for Investors

Zurn Elkay Water Solutions Corporation (ZWS) Risk Factors

Zurn Elkay Water Solutions Corporation (ZWS) faces a variety of internal and external risks that could significantly impact its financial health. These risks span industry competition, regulatory changes, and overall market conditions. Understanding these factors is crucial for investors assessing the company’s stability and growth potential. For further insights, explore Exploring Zurn Elkay Water Solutions Corporation (ZWS) Investor Profile: Who’s Buying and Why?

Here's an overview of key risks:

• Industry Competition: The markets for water safety and control products are highly competitive. Zurn Elkay Water Solutions Corporation (ZWS) competes with a range of global and regional players. Increased competition could lead to price pressures, reduced margins, and loss of market share.
• Regulatory Changes: The company operates in an industry subject to environmental and safety regulations, which are constantly evolving. Changes in these regulations can increase compliance costs, necessitate product modifications, and potentially expose the company to liabilities.
• Market Conditions: Economic downturns, fluctuations in construction activity, and changes in infrastructure spending can significantly impact the demand for Zurn Elkay Water Solutions Corporation (ZWS) products. A slowdown in these areas could lead to decreased sales and profitability.

Operational, financial, and strategic risks are often highlighted in earnings reports and filings. These include:

• Supply Chain Disruptions: Disruptions in the supply chain, whether due to geopolitical events, natural disasters, or other factors, can impact the availability and cost of raw materials and components, affecting production and profitability.
• Financial Risks: Fluctuations in currency exchange rates, rising interest rates, and access to capital markets can all pose financial risks. For instance, unfavorable currency movements can reduce the value of international sales, while higher interest rates can increase borrowing costs.
• Strategic Risks: Strategic risks include challenges related to acquisitions, integrations, and the execution of long-term growth plans. Failure to successfully integrate acquired businesses or adapt to changing market dynamics can hinder the company’s performance.

Mitigation strategies and plans are essential for managing these risks. While specific details can vary, common strategies include:

• Diversification: Diversifying product offerings and expanding into new geographic markets can reduce reliance on any single product or region, mitigating the impact of market-specific downturns.
• Operational Efficiency: Improving operational efficiency through lean manufacturing, automation, and supply chain optimization can help reduce costs and improve margins, providing a buffer against competitive pressures.
• Financial Management: Prudent financial management, including hedging currency risks, maintaining a strong balance sheet, and managing debt levels, can help mitigate financial risks.
• Compliance Programs: Robust compliance programs and proactive engagement with regulatory bodies can help ensure adherence to environmental and safety standards, minimizing the risk of fines and penalties.

Understanding and monitoring these risks and mitigation strategies is crucial for investors seeking to make informed decisions about Zurn Elkay Water Solutions Corporation (ZWS). The ability of the company to effectively manage these challenges will play a significant role in its long-term financial health and performance.

Zurn Elkay Water Solutions Corporation (ZWS) Growth Opportunities

Zurn Elkay Water Solutions Corporation (ZWS) has several key drivers that are expected to contribute to its future growth. These include product innovations, market expansions, and strategic acquisitions. The company's focus on providing water solutions and its ability to adapt to changing market needs are also important factors.

Here's a breakdown of potential growth areas:

• Product Innovations: Investing in research and development to create new and improved water solutions.
• Market Expansions: Extending the reach to new geographic areas and customer segments.
• Acquisitions: Acquiring other companies to expand product offerings and market share.

While specific future revenue growth projections and earnings estimates are subject to market conditions and company performance, analysts often provide insights based on current trends and company strategies. For example, one source mentions that analysts predict the company's revenue will increase in the near term, with estimates suggesting revenue of $394.1 million for the current quarter. However, it's important to note that these are estimates and actual results may vary.

Strategic initiatives and partnerships can also play a significant role in driving future growth. For example, Zurn Elkay Water Solutions Corporation (ZWS) may focus on developing partnerships with other companies to expand its product offerings or enter new markets. These initiatives can help the company to achieve its growth objectives and create value for shareholders.

Zurn Elkay Water Solutions Corporation (ZWS) possesses several competitive advantages that position it for growth. These may include its strong brand reputation, its established distribution network, and its ability to provide innovative and cost-effective water solutions. These advantages can help the company to maintain its market share and attract new customers.

Here is a table summarizing potential growth drivers for Zurn Elkay Water Solutions Corporation (ZWS):

For more detailed insights into the company and its investors, you can explore: Exploring Zurn Elkay Water Solutions Corporation (ZWS) Investor Profile: Who’s Buying and Why?

Keep in mind that investing in the stock market involves risks, and past performance is not indicative of future results. Investors should conduct their own research and consult with a financial advisor before making any investment decisions.