Highlights

  • ZWS’ net sales increased 2.9% to USD 410 million in Q3FY24.
  • In Q32024, the gross profit margin increased from 38.96% in Q3FY23 to 42.59%
  • The company announced a quarterly dividend of USD 0.09 per share, representing a 12.5% increase from the previous dividend of USD 0.08 per share.

Zurn Elkay Water Solutions Corp (NYSE:ZWS) provides clean water solutions. The pure-play water management company has a market cap of USD 6.73bn.

In third quarter of the financial year 2024 (Q3FY24), ZSW saw notable improvements in profitability compared to Q3FY23, with gross profit margin rising from 38.96% to 42.59%, EBITDA margin increasing from 21.08% to 23.12%, and operating margin climbing from 15.64% to 17.78%. Income before tax margin grew from 11.97% to 14.73%, and net margin increased from 8.84% to 10.61%.

Further, net sales for the period increased by 2.9% to USD 410.0 million. Net income rose by 4.8% to USD 43.5 million, due to higher revenue though it was partially compensated by increased operating expenses. Net operating cash inflows grew by 17.5% to USD 229.9 million, supported by the increased net income, though partially offset by changes in net working capital. Cash and cash equivalents surged 37.5% to USD 187.9 million, driven by cash inflows from operating activities, partly offset by outflows from investing and financing activities.

Recent Business Update

On October 7, 2024, ZSW announced that it was recognised as one of America’s Greenest Companies for 2025 by Newsweek and Plant-A Insights Group. In the same month, the company also announced a quarterly dividend of USD 0.09 per share, representing a 12.5% increase from the previous dividend of USD 0.08 per share.

Company Outlook

Looking ahead, the company expects low single-digit growth in core net sales for Q42024. Adjusted EBITDA is projected to range between USD 88 million and USD 90 million in Q42024. Furthermore, ZWS has raised its full-year free cash flow outlook to around USD 260 million.

Top 10 Shareholders

The top 10 shareholders of ZWS hold around 51.34% of the total shares, indicating concentrated ownership. BlackRock Institutional Trust Company, N.A. is the largest shareholder with a 12.30% stake. The Vanguard Group, Inc. follows with a 9.28% stake in the company.

Stock Performance:

ZWS’ stock price has increased by approximately 24.42% over the past three months. In the last six months, of the share price has increased by 30.27%. As of November 27, 2024, the stock’s closing price is USD 39.68, which is higher than the average of its 52-week range, which spans from USD 27.55 to USD 40.67.

Note 1: Past performance is not a reliable indicator of future performance.
Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is November 27, 2024. The reference data in this report has been partly sourced from EODHD/Others.