Zurn Elkay Water Solutions Corporation research snapshot
ZWS AI stock analysis reads Zurn Elkay Water Solutions as a high-quality, specification-driven water-management business with strong brands, a large MRO and retrofit installed base, and a proven track record of margin expansion. At the August 3, 2026 data cutoff, the latest located close was $50.51 on July 31, with a market capitalization near $8.38 billion. The company beat expectations in Q2 2026, raised full-year guidance for adjusted EBITDA and free cash flow, and closed the Intellihot tankless water-heating acquisition. The ZWS AI stock forecast is constructive if margin gains, mid-single-digit to high-single-digit growth, and strong free cash flow continue, but the forward valuation near 26 times earnings and customer concentration still demand a margin of safety. This page is an informational research tool, not investment advice.
Current price
$50.51 July 31, 2026 close
Market cap
$8.38 billion
AI score
76 / 100
Rating
Quality water-management compounder, valuation still elevated despite improving fundamentals
Trend status
Constructive after a record-margin Q2; price sits above the 50-day and 200-day moving averages with RSI near 59
Data cutoff (updated monthly)
August 4, 2026
Informational use only. This page is not investment advice.
| Dimension | Conclusion | Confidence |
|---|---|---|
| Business quality | Zurn Elkay sells specification-driven water safety, control, flow, hygiene, environmental, and filtered drinking-water products that are mission-critical but usually a small part of a building project budget. About 50% of sales now come from MRO and retrofit-replace demand, which hedges against new-construction swings. | High |
| Moat | The moat combines recognized Zurn, Elkay, and Halsey Taylor brands, code and specification approvals, product breadth, distributor reach, a growing filtered-unit installed base, a proprietary filter head that blocks counterfeits, and scale-based operating improvement. It is meaningful but not impossible to replicate. | Medium-high |
| Management | CEO Todd A. Adams has led the company since 2009 and chairman since 2020, using the Zurn Elkay Business System to drive productivity and disciplined capital allocation. In H1 2026 the company deployed $100 million to buybacks, paid $37 million in dividends, and closed the Intellihot acquisition while keeping net leverage at 0.3x. | High |
| Financial trend | Adjusted EBITDA margin improved from 19.5% in Q1 2023 to a record 27.7% in Q2 2026. TTM free cash flow reached $378.5 million, revenue grew 10% in Q2 2026, and full-year adjusted EBITDA guidance was raised to $503 to $513 million. | High |
| Valuation | At $50.51, financial_rigor.py calculates about 31.42x TTM EPS, 25.84x forward earnings, 5.06x book value, 22.13x free cash flow, and a 0.87% dividend yield. The TTM multiple is flattered by a one-time tariff refund, so the forward multiple is the cleaner read and still assumes continued improvement. | High |
| Technical trend | The July 31 close was above the StockAnalysis 50-day moving average near $48.43 and the 200-day average near $47.96, with RSI near 59.42. The 52-week range was $42.39 to $55.00, and the stock gained about 17.6% over the trailing 52 weeks. | Medium-high |
| Risk level | The main risks are customer and distributor concentration, commercial construction weakness, tariff policy and refund timing, raw-material costs, Intellihot integration, product liability, cybersecurity, and multiple compression. | High |
| AI confidence | Confidence is high for historical facts and calculations, but only medium for the forecast because a quality industrial stock can still be hurt by a cyclical slowdown, a slower Intellihot ramp, or a lower earnings multiple. | High data confidence |
| Investment certainty | Investment certainty is medium. The business quality and financial trend are clearer than the future share-price return, and the forward valuation requires continued execution to compound. | Medium |
ZWS AI stock forecast
The ZWS AI stock forecast uses the $50.51 reference price and the FY2026 consensus adjusted EPS near $1.83. A three-year financial_rigor.py sensitivity using 13%, 8%, and 2% annual EPS growth with 30x, 25x, and 18x terminal multiples produced mechanical values near $79, $58, and $35. These are scenario ranges, not price promises, and they exclude dividends, acquisition surprises, tariff refunds, and changes in working capital. The average sell-side target is $58.10.
$74 to $84 before dividends
More likely if core sales keep growing in the high single digits or better, adjusted EBITDA margins stay near or above 28%, Intellihot scales toward $100 million of sales, free cash flow stays well above $350 million, and the market holds a premium industrial multiple.
$55 to $62 before dividends
More likely if sales grow at a mid-single-digit to high-single-digit rate initially and then normalize, operating margins hold near recent levels, debt stays low, and the valuation settles near the current forward multiple in the mid-20s earnings range.
$33 to $39 before dividends
More likely if commercial and institutional construction weakens, tariffs or material costs pressure margins, major customers or distributors reduce orders, Intellihot integration disappoints, or investors reprice the stock near a high-teens earnings multiple.
ZWS AI technical analysis
ZWS AI technical analysis turned constructive at the August 3, 2026 cutoff. StockAnalysis reported a $50.51 July 31 close, a 50-day moving average near $48.43, a 200-day average near $47.96, RSI near 59.42, beta near 0.78, and 20-day average volume near 1.05 million shares. The practical setup is a sustained hold above the moving-average band with volume, or a controlled pullback that holds the $48 zone. These static levels should be refreshed before any trade.
| Level | Value | Why it matters |
|---|---|---|
| Current price reference | $50.51 | StockAnalysis closing quote for July 31, 2026, the latest located completed trading session before the August 3 research cutoff. |
| Near support | $48.00 to $48.50 | A research reference zone around the StockAnalysis 50-day moving average near $48.43. It is a price-area estimate from recent range behavior, not a live exchange order level. |
| Secondary support | $45.50 to $47.00 | A broader downside reference that includes the 200-day moving average near $47.96. Recheck earnings, volume, and the 52-week range before treating it as durable support. |
| Near resistance | $52.00 to $53.00 | A band between the recent highs and the stock 52-week high near $55.00. A sustained close above the zone would improve trend evidence. |
| Breakout resistance | $54.00 to $55.00 | The upper part of the recent range, with StockAnalysis reporting a 52-week high near $55.00 and a 52-week low near $42.39. |
| 50-day moving average | $48.43 StockAnalysis snapshot | The July 31 close was above this intermediate trend measure, so the intermediate trend is constructive. |
| 200-day moving average | $47.96 StockAnalysis snapshot | The July 31 close was also above this longer trend measure, which supports the primary trend view. |
| Momentum | RSI near 59.42 | Momentum was positive but not overbought in the cited snapshot, leaving room before an extreme reading. |
| Volume | About 1.05 million shares, 20-day average | A move above the $52 to $53 zone is more credible when volume expands above the recent average. |
| Invalidation | Close below $47, then $45 | A sustained break below the $48 zone and then the 200-day area near $48 weakens the short-term setup. A move below $45 requires a fresh fundamental review. |
ZWS AI trading strategy
The ZWS AI trading strategy below is a rules-based research framework, not personalized advice. Pair price action with core sales, adjusted EBITDA margin, free cash flow, customer concentration, distributor health, tariff refunds, Intellihot integration, and valuation.
Watch for ZWS to hold above the $48.00 to $48.50 support zone on normal-to-expanding volume, with confirmation from stable sales guidance, margin expansion, and water-management peer breadth.
A failed hold followed by a close below $47 should invalidate the near-term trend setup.
If ZWS pulls back toward the $48 zone or the $45.50 to $47.00 band without a change in customer demand, tariffs, margins, or free cash flow, compare the lower price with the long-term earnings and moat case.
Do not treat a lower quote as value if backlog weakens, a major distributor changes behavior, Intellihot integration stalls, or operating margins fall faster than sales.
Track core sales by product category, adjusted EBITDA margin, operating margin, free cash flow, net debt leverage, buybacks, dividend growth, customer concentration, distributor concentration, material costs, tariff refunds, and Intellihot integration progress.
Lower confidence if sales growth slows, the largest customers reduce orders, tariffs persist without pricing recovery, free cash flow drops, or EPS growth cannot support the forward multiple.
Investment research summary
Customers pay Zurn Elkay for specification-driven products that control, conserve, filter, and safely deliver water in commercial, institutional, public, waterworks, and residential settings. The products are often project-critical, code-sensitive, and small enough as a percentage of project cost that reliability matters more than the lowest unit price. Roughly half of the business is MRO and retrofit-replace demand, which reduces dependence on new construction.
The moat is built from Zurn, Elkay, and Halsey Taylor brand recognition, regulatory and plumbing-code approvals, engineering specifications, product breadth, installed-base familiarity, distribution relationships, a proprietary filter head, and the ZEBS operating system. The advantage can widen through scale, product innovation, and the growing filtered-unit installed base, but regional competitors and large industrial rivals remain credible threats.
The thesis fails if construction activity contracts, customer concentration becomes a sales shock, distributors lose confidence, material costs or tariffs outrun pricing, Intellihot integration dilutes returns, a product-liability issue damages the brand, or acquisitions dilute margins. The FY2025 Form 10-K reported that the top five customers represented about 38% of sales and the largest customer 18%, and the three largest independent distributors generated about 32%.
Todd A. Adams became CEO in 2009 and chairman in 2020 after joining in 2004. The long tenure supports company knowledge and operating consistency. Management has used buybacks, dividends, productivity initiatives, and targeted growth adjacencies as capital-allocation tools. In H1 2026 it deployed $100 million to buybacks and closed the Intellihot acquisition while keeping net leverage at 0.3x. The key question is whether Intellihot and future adjacencies earn more than the cost of capital without weakening the core franchise.
Water conservation, contamination control, hygiene, building-code requirements, DOE condensing-efficiency mandates, Legionella concerns, infrastructure renewal, and the replacement of inefficient fixtures support a long-term demand trend. Intellihot expands the served market by about $1.1 billion, of which the tankless segment represents over $200 million today and is growing faster than the wider category. The counterweight is that commercial and institutional construction still has cycles.
At about 31.42x TTM EPS, 25.84x forward earnings, and 22.13x free cash flow, the market is paying for a durable margin and growth profile. The balance sheet is strong, with $365 million of cash against about $499 million of total debt and 0.3x net leverage, but the stock is not priced like a no-growth industrial. A larger margin of safety would require either a lower entry price or evidence that earnings can compound faster than the forward multiple implies.
Source-backed data
Every metric below includes a source and last verification date.
| Metric | Value | Source | Last verified |
|---|---|---|---|
| Current price | $50.51 July 31, 2026 close | StockAnalysis ZWS statistics | August 3, 2026 |
| Market capitalization | $8.38 billion | StockAnalysis statistics and market-cap math | August 3, 2026 |
| Shares outstanding | 165.86 million, down 1.34% year over year | ZWS Q2 2026 Form 10-Q and StockAnalysis statistics | August 3, 2026 |
| FY2025 revenue | $1.696 billion | ZWS 2025 Form 10-K and StockAnalysis financials | August 3, 2026 |
| Q2 2026 operating results | $491.0 million net sales with 10% core growth, $136.0 million adjusted EBITDA at a record 27.7% margin, and adjusted EPS of $0.50 | ZWS Q2 2026 financial results | August 3, 2026 |
| FY2026 outlook | Adjusted EBITDA of $503 to $513 million, free cash flow of at least $350 million excluding tariff refunds, and roughly 140 basis points of margin expansion | ZWS Q2 2026 financial results and earnings call | August 3, 2026 |
| Free cash flow | $378.5 million TTM, and $111.8 million in Q2 2026 | StockAnalysis cash flow and ZWS Q2 2026 release | August 3, 2026 |
| Cash and debt | $365.0 million cash and about $499.1 million total debt at June 30, 2026, with 0.3x net debt leverage | ZWS Q2 2026 Form 10-Q | August 3, 2026 |
| Intellihot acquisition | Closed July 21, 2026 for a preliminary cash purchase price of about $108.5 million net of cash acquired; expands the addressable market by about $1.1 billion | ZWS Q2 2026 Form 10-Q and earnings call | August 3, 2026 |
| Customer and distributor concentration | Top five customers were about 38% of FY2025 sales; the largest customer was 18%; the three largest independent distributors were about 32% | ZWS 2025 Form 10-K | August 3, 2026 |
| Valuation ratios | 31.42x P/E, 25.84x forward P/E, 5.06x P/B, 22.13x P/FCF, 4.52% FCF yield, and 0.87% dividend yield using financial_rigor.py | StockAnalysis statistics and financial_rigor.py | August 3, 2026 |
| Technical data | 50-day moving average $48.43, 200-day moving average $47.96, RSI 59.42, beta 0.78, and 20-day average volume 1.05 million shares | StockAnalysis ZWS statistics | August 3, 2026 |
| Analyst consensus | 11 analysts, Buy consensus, average price target $58.10 with a range of $52 to $65 | StockAnalysis ZWS forecast | August 3, 2026 |
| Management | Todd A. Adams has been CEO since 2009 and chairman since 2020 | ZWS 2025 Form 10-K | August 3, 2026 |
This ZWS AI stock analysis is an informational research tool only. It is not investment advice, financial planning, tax advice, or a recommendation to buy or sell Zurn Elkay Water Solutions. Forecast scenarios are based on available public data as of the stated cutoff date and can be wrong if earnings, construction demand, tariffs, customer concentration, material costs, valuation multiples, or market conditions change.
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