MeritValue

Zurn Elkay Water Solutions Corp

ZWSdata completeness 88%18 fiscal years on file
The thesis, from the filings

Zurn Elkay Water Solutions Corp earns about 6% on invested capital, but has diluted owners by 37% over 5 years — worth asking whether the growth reaches owners. The applicable estimate puts fair value near $7.32 a share.Whether it’s worth owning at today’s price is the last question — and yours to answer, below.

i. The business — what you’d actually own
FigureFY 2021FY 2022FY 2023FY 2024FY 2025
Revenue$910.9M1$1.28B2$1.53B3$1.57B3$1.7B3
Net income$120.9M4$61.7M5$112.7M6$160.2M6$198M6
Operating cash flow$223.6M7$97M8$253.9M9$293.5M9$346.5M9
Capital expenditure—————
Free cash flow (derived)—————
Total debt$1.08B10$1.07B11$990.6M12$991.2M13$993M13
Cash & equivalents$96.6M14$124.8M15$136.7M16$198M17$300.5M17
Diluted shares125.1M153.8M177.3M174.7M171.3M

Superscripts are receipts. Each links to the SEC filing the number came from (full list at the bottom).

ii. Your slice — ownership made literal
If you owned
shares
Net assets behind them
$93.62
your share of equity
Profit it earned you last year
$11.56
Free cash flow it threw off
—
Debt you’d be carrying
$57.98

10 shares is a claim on $93.62 of net worth that earned you $11.56 last year, against $57.98 of debt.

iii. Is this a good business?
Moat signal · return on invested capital
6% avg · 5y
FY21 7%FY22 3%FY23 5%FY24 7%FY25 8%

It earned an average 6% on invested capital over 5 years. Compare that to what it costs to fund the business.

seeing a moat in the numbers →
Management signal · capital allocation
+37% shares · 5y

Share count is up 37% over 5 years — owners have been diluted. Worth asking what they got for it. Total debt has held roughly steady.

reading capital allocation →

Signals, not verdicts — read from the filings above. Numbers don’t prove a moat; they show its footprint. You decide.

iv. What it’s worth — engine v0.1.0
DCF · Growth Exit 10Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
DCF · Growth Exit 5Y
not applicable
only 0 years of FCF (need ≥3) — model not applicable
Earnings Power Value
$7.32
assumptions (8)
  • riskFreeRate4.7%
  • equityRiskPremium5.0%
  • beta100.0%
  • equityWeight85.0%
  • costOfDebtSpread1.5%
  • taxRate21.0%
  • normalizedEarnings$120.9M
  • growthAssumed0.0%
Graham Number
$15.56
assumptions (1)
  • grahamMultiplier2250.0%

Different models answer different questions — which to trust when →

Sources — the receipts
  1. 10-K · period ending 2021-12-31 · accession 0001439288-24-000016 (RevenueFromContractWithCustomerExcludingAssessedTax)
  2. 10-K · period ending 2022-12-31 · accession 0001439288-25-000019 (RevenueFromContractWithCustomerExcludingAssessedTax)
  3. 10-K · period ending 2023-12-31 · accession 0001628280-26-006372 (RevenueFromContractWithCustomerExcludingAssessedTax)
  4. 10-K · period ending 2021-12-31 · accession 0001439288-24-000016 (NetIncomeLoss)
  5. 10-K · period ending 2022-12-31 · accession 0001439288-25-000019 (NetIncomeLoss)
  6. 10-K · period ending 2023-12-31 · accession 0001628280-26-006372 (NetIncomeLoss)
  7. 10-K · period ending 2021-12-31 · accession 0001439288-24-000016 (NetCashProvidedByUsedInOperatingActivities)
  8. 10-K · period ending 2022-12-31 · accession 0001439288-25-000019 (NetCashProvidedByUsedInOperatingActivities)
  9. 10-K · period ending 2023-12-31 · accession 0001628280-26-006372 (NetCashProvidedByUsedInOperatingActivities)
  10. 10-K · period ending 2021-12-31 · accession 0001439288-23-000017 (LongTermDebtNoncurrent)
  11. 10-K · period ending 2022-12-31 · accession 0001439288-24-000016 (LongTermDebtNoncurrent)
  12. 10-K · period ending 2023-12-31 · accession 0001439288-25-000019 (LongTermDebtNoncurrent)
  13. 10-K · period ending 2024-12-31 · accession 0001628280-26-006372 (LongTermDebtNoncurrent)
  14. 10-K · period ending 2021-12-31 · accession 0001439288-23-000017 (CashAndCashEquivalentsAtCarryingValue)
  15. 10-K · period ending 2022-12-31 · accession 0001439288-24-000016 (CashAndCashEquivalentsAtCarryingValue)
  16. 10-K · period ending 2023-12-31 · accession 0001439288-25-000019 (CashAndCashEquivalentsAtCarryingValue)
  17. 10-K · period ending 2024-12-31 · accession 0001628280-26-006372 (CashAndCashEquivalentsAtCarryingValue)