Zurn Elkay Water Solutions Corp Dossier - Source-backed chat

Zurn Elkay Water Solutions Corp

ZWSNYSE

SectorIndustrials

IndustryBuilding Products

Beta (adjusted)0.85

Intrinsic Value $36.91median of 6 methods · middle span $27-$54based on filings through 31 Mar 2026

Market Price $46.47Price as of 30 Sep 2026

OvervaluedIntrinsic value is 21% below the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $7.7B

Enterprise Value $7.9B

Shares Outstanding 168.7M diluted

Moat Rating Wide

Next Earnings Date27 Oct 2026

Last ex-dividend20 Aug 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Zurn Elkay Water Solutions Corp (ZWS) is a premier pure-play water management business with best-in-class unit economics, characterized by high gross margins and robust free cash flow generation. The company is uniquely positioned to benefit from secular tailwinds in North American institutional infrastructure, including lead-free water mandates in schools and the replacement cycle in commercial verticals. Despite trading at a premium valuation, its strong execution, conservative guidance, and successful integration of Elkay Manufacturing support a positive outlook.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets10 analysts · as of 18 Aug 2026

Low · most bearish analyst$52.00

Mean target$58.10

High · most bullish analyst$65.00

Street targets sit above today's price; our intrinsic value sits below it. Different horizons, different questions.

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 18 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Base CaseCentral scenario

The company continues to execute on its high-margin trajectory, driven by the rollout of the Elkay Pro Filtration platform and steady institutional demand. Core sales grow at mid-single digits, and adjusted EBITDA margins stabilize above 27%, supported by the current tariff structure and ongoing cost synergies.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Market leadership in specification-driven water safety, control, and filtration products.
High-margin recurring revenue streams from proprietary replacement filters (Elkay Pro Filtration platform).
Strong balance sheet with net debt leverage at 0.5x, providing ample financial flexibility for capital returns and M&A.

Key Investment Risks

Slower-than-expected non-residential and institutional construction market growth.
Potential changes to the current tariff structure that could impact product margins.
Tariff exposure and potential supply chain disruptions, particularly if the current tariff structure changes or if there are delays in transitioning the supply chain out of China.

Thesis Invalidation Triggers

Core sales growth turning negative or falling significantly below guidance.
Adjusted EBITDA margins compressing below 25% due to rising input costs or tariff reversals.
Free cash flow generation falling materially short of the $335 million full-year target.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.