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Energy Recovery, Inc. (ERII)

NasdaqGS - NasdaqGS Real Time Price. Currency in USD
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18.98-0.44 (-2.27%)
As of 11:12AM EDT. Market open.
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  • M
    Mac
    Nice article, looks like Turbos have a future. Maybe this is the reason for the nice bounce but to me it feels like somebody is accumulating a very large position: https://www.waterworld.com/drinking-water/treatment/article/14276480/desalinating-a-moving-target
  • R
    Ryan
    Interesting price action leading up to the annual meeting. Hoping for a good call.
  • R
    Ryan
    Did anyone listen in to the shareholders meeting this morning? Anything of substance?
  • R
    Ryan
    They installed a turbocharger in Saudi Arabia. The story is way too technical for me to understand...

    https://www.linkedin.com/company/energyrecovery/posts/?feedView=all
  • H
    Halevay
    Slam!

    Great report. Record quarter
    “Just the beginning”
    Beat on revs and EPS
  • R
    Ryan
    I loved the question about Mao's CEO tenure. He's sticking around until 2026, at the least! Music to my ears!
  • J
    Joseph
    I'm starting to like this stock but the PE ratio seems extremely high isn't it? Happy to discuss this
  • M
    Mac
    Are you doing your part, I know I am? I love Tequila and over the years I have done my fair share, actually way more than my fair share, of consuming it. Now the Mexican Government is enacting a law that the waste water from the production of Tequila (and other big users of water) will now have to be treated to the point of making it potable: "From Agave Crisis to Water Crisis?
    A newly-enacted Mexican regulation on permissible levels of pollution in wastewater has left many tequila brands scrambling. The standard (NOM-001 SEMARNAT-2021, in case you want to read it) strictly limits the amount of toxicity, oxygen levels, color and other non-biodegradable contaminants that could potentially affect national waterways. Furthermore, it calls for all wastewater to be made potable."
    So come on people, get out there and support Energy Recovery's Waste Water Treatment by having some Tequila, Cinco de Mayo is just a couple of weeks away!
  • R
    Ryan
    If tradition holds, there should be a positive report towards the end of April, 1 week prior to the earnings call. I'm hoping they will announce who the OEM refrigeration company is, that is the building the new rack with using the PX 1300.
  • M
    Mac
    Here is my take away, or summary, from yesterday’s call: Looking at the numbers and reading the prepared notes what jumps out to me is that they are expecting a great 4th qtr. They said they reaffirmed 2021 guidance of 10% growth over 2020. While doing that they expect 3rd qtr to have similar numbers as the second qtr. If so that would mean that at the end of September sales would be around $70 million. With the year expected to be 10% over 2020 that would mean that 4th qtr sales of around $31.5 million and would be a substantial increase, 13%, over 3rd qtr 2020 which was a record for a qtr (these numbers leave out the SLB lic. Revenue). They seemed very confident of the 10% and I assume that is because they have some mega orders on the books that are easy to time. Also I liked that they said they bought another new kiln, demand must be there.
    Desalination looks real good and they are seeing a rebound in OEM sales, China looking to increase Desal 75%. “Backlog strong..growth remains robust at 10% this year and 25% in 2022”…“bullish on the potential of the desalination not only for the next two years, but for many years to come” that is much different than prior years when they were looking for 2 year cycles.
    Industrial Wastewater looks very promising but significant revenue is probably at least a year out.
    Vorteq reminds me of a relative with a substance problem, it will get better, patience. At least, I guess, they are keeping the patient alive, and as with many relationships, diamonds (Kobe) can help.
    Refrigeration could be the diamond in the rough. With the “bolt on” option not much expense or risk for customers and sounds like it is ready to go. “building our first commercial ready system as we speak.” Looks to be a 2022 product that could get some real good PR.
    They bought back 657,000 shares for an average price of $17.60, could be a floor in the stock going forward. Share count went up with all the stock options being exercised.
    Being a long term investor I am ok with the call, refrigeration looks like the area where we could get some excitement but we could have a couple of sloppy months ahead. Always the tease: “As we look to next quarter’s update…”.
  • R
    Ryan
    From Liberty's earnings call.

    Operator

    Our next question is from Thomas Curran from B. Riley FBR. Go ahead.

    Thomas Curran -- B. Riley FBR -- Analyst

    The morning, thanks for taking my questions. On Liberty's YouTube channel, I noticed that you posted a series of promo videos to introduce and explain various completion technologies that you can or expect to offer. The set included a video on which Ron took a turn as the star, providing an overview of Energy Recovery's VorTeq system. Would you update us on your latest thinking on and expectations for VorTeq. What's the earliest we might see you commercially introduce the first system? And then how many VorTeq units do you ultimately plan to deploy?

    Ron Gusek -- President

    Oh, that's a good question. We're always a little careful about what we say there. Of course, Energy Recovery is a public company as well, and they have not reported yet this quarter, so I have not provided any updated commentary. I will go so far as to say that, that testing is ongoing. We continue to pump sand through the VorTeq assembly in their test facility in Katy. And we continue to be happy with the progress that they are making there. So at this point in time, I'm not going to comment on a potential time for commercialization, but certainly I would go so far as to say that when and if we get to a point where we're happy with that technology commercially, we'll deploy it rapidly across our fleets, starting with those areas where we feel that benefit is going to be realized as quickly as possible.

    https://www.fool.com/earnings/call-transcripts/2020/02/06/liberty-oilfield-services-inc-lbrt-q4-2019-earning.aspx
    LBRT earnings call for the period ending December 31, 2019.
    LBRT earnings call for the period ending December 31, 2019.
    www.fool.com
  • B
    Bob Finkelstein
    Well, the quarterly report didn't really show much progress, but at least in conference call management seems like they have a grip on what they are doing and are taking proactive steps to ensure they can test vorteq in a more timely fashion on the way to commercialization. They didn't really give a clear answer on whether there still needs to be significant design or material improvements to get the vorteq operational. other than to say they need log more mileage in testing under real world conditions. To my mind, and completely subjective thing, at least the management sounds like they speak confidently and pragmatically about plans and progress, unlike under previous CEO management.
  • H
    Halevay
    Loved the part of today’s press release where Gannon says:
    We currently have the most significant backlog and pipeline in the Company's history, with activity and awards spanning 2019 and 2020, Project activity continues to expand with little signs of slowing, driven in part by growing global demand for potable water.
  • M
    Mac
    "Energy Recovery (NASDAQ:ERII) Price Target Increased to $23.00 by Analysts at Raymond James ". My guess would be that Raymond James would be the firm with the closest ties to ERII, and to potential Vorteq news. The Annual Meeting, June 10th, will be here before you know it. My guess is that it will be good news on Vorteq. I think the only reason that they are extending it the couple of months like they have done is because of very favorable test results on the prior fracks.
  • J
    Jays00270
    Evercore ISI upgrades ERII, RNGR
    Monday, January 04, 2021 02:00:00 PM (GMT)

    Energy Recovery (ERII $13.64) upgraded to outperform from in line; target increased to $16 from $12 (FactSet average target ~$12; range $11-16)
    Ranger Energy Services (RNGR $3.64) upgraded to outperform from in line; target is $6 (FactSet average target ~$5; range $4-7)
    Upgrades in conjunction with a transfer in analyst coverage
    Analyst is Jason Bandel
  • E
    ED SCHULTHEIS
    I believe that this is the largest water project that they ever received.
    16.6mm with 77% gross margins will give them nearly 13mm in gross profit. If you assume marginable SG&A of 3mm then you get 10mm to the bottom line. 50mm shares or 20 cents a share marginable income. 20x earnings and this stock could rise quite a bit just on this contract.
    Company is priced just on the water business and cash. The oil business is a free option at these prices (8.68 as of posting).

    Added more shares this morning
    good luck
  • R
    Ryan
    Yahoo won't let me attach the link about the refrigeration, so here is the article. The key nugget is “We are very close to going to market.”

    Energy Recovery, Inc., a San Leandro, California (U.S.)-based manufacturer of pressure-exchanger devices, is “very close” to marketing a pressure exchanger designed to significantly improve the efficiency of transcritical CO2 refrigeration systems in high-ambient-temperature locations.

    The transcritical CO2 pressure exchanger device, model PX G1300, uses high-pressure gas from the gas cooler to boost the pressure of low-pressure flash bypass gas, explained K.C. Chen, vice president of engineering for Energy Recovery. The now higher pressure gas can then be channeled back to the gas cooler rather than to the medium-temperature compressor, thereby saving energy.

    Energy Recovery has determined that the PX G1300 can boost the efficiency (COP) of a standard transcritical CO2 system by up to 50% at 90°F (32.2°C).

    The device consists of only four pieces, a rotor and three stators containing an array of channels arranged around the axis of the rotor.

    With the design of the system in place, the company is in “the early stages of engagement” with potential commercial partners – CO2 refrigeration OEMs,” said Chen. “We are very close to going to market.” He added that the PX G1300 will be “competitively priced.”

    Energy Recovery has marketed its pressure exchanger technology over the past 30 years in the desalination industry. The device can recover up to 60% of otherwise wasted energy in the seawater reverse osmosis (SWRO) desalination process, noted Chen.

    Approached by national lab
    Energy Recovery decided to develop the refrigeration application after being approached by Oak Ridge National Laboratory, which had done research into using a pressure exchanger to improve the efficiency of a CO2 refrigeration system.

    Chen describes the PX G1300 as “almost like a revolving door” facilitating a direct pressure-to-pressure exchange of energy, with a high pressure stream elevating the pressure of a low-pressure stream. “And you can adjust how fast the door turns to accommodate different cooling capacities,” he said.

    At the same time, high-pressure gas is also allowed to become low-pressure coolant channeled to the liquid receiver.

    The PX G1300 would be an alternative to existing technologies that enhance the efficiency of transcritical CO2 systems in warm climates, such as an ejector or a parallel compressor. According to Efficient Energy, ejector technology typically manages “less than 200psi (14bar) of pressure differential boost,” the PX G1300 “is able to manage an unlimited differential boost as required by the system, and therefore continues to perform as temperatures rise.”

    Chen said that the PX G1300, by reducing energy use on transcritical CO2 refrigeration, “aligns with our ESG [environmental, social and governance] initiative completely.” Energy Recovery’s inaugural ESG report was recently shortlisted shortlisted for “Best 1st Time Sustainability Report” by Corporate Register Reporting Awards, along with eight other corporations.
  • N
    Nikolas
    Strong revenue/earnings growth, high margins, low price and a great product. What isn’t to like here
  • R
    Resry
    Very good call with some caveats.
    Projecting 20% revenue growth for 2020. Margins will be reduced due to China tariffs. Supply chain OK for now. They use some parts from China, but so far no disruption. No disruption from virus as yet.
    Expect Vorteq testing at live well with Liberty. Seems they are trying to test at Liberty customer's well.
    Here's the big one. They expect to complete M1 this year. I'll believe it when I see it, but Mr. Mao stated it. They apparently have made a lot of progress in this
    No news on CEO