Latest news with #XYL
Yahoo
5 days ago
- Business
- Yahoo
Here's Why Hold Strategy is Apt for Xylem Stock Right Now
Xylem Inc. XYL is benefiting from solid momentum in the Measurement & Control Solutions segment, driven by robust demand for advanced technology solutions like smart metering and other applications. The Water Infrastructure segment is witnessing strength in the transport application business, supported by increased infrastructure projects in the United States. Recovery in the Applied Water segment, driven by higher demand for building solutions applications, also holds first-quarter 2025, the company's backlog totaled $5.1 billion, backed by strength across utilities, industrial and building solutions end markets. For 2025, Xylem expects to generate revenues of $8.7-$8.8 billion, indicating an increase of 1-2% on a year-over-year company intends to strengthen and expand its businesses through acquisitions. For instance, in December 2024, XYL completed the acquisition of a majority stake in Idrica. The inclusion of Idrica's technology expanded growth opportunities for Xylem and enabled it to penetrate new markets and deliver intelligent solutions to its it completed the buyout of Evoqua (in May 2023), a mission-critical water treatment solutions and services provider. Evoqua's advanced water and wastewater treatment capabilities and exposure to key industrial markets complement XYL's portfolio of solutions across the water cycle. Acquisitions contributed $786 million to the company's total revenues in remains focused on rewarding its shareholders through dividend payouts. For instance, in the first quarter 2025, Xylem paid dividends of $98 million and repurchased shares worth $12.9 million. Also, in February 2025, the company hiked its dividend rate by 11%. Image Source: Zacks Investment Research In the past month, the Zacks Rank #3 (Hold) company has gained 4% compared with the industry's 1.9% the positives, Xylem's high debt levels may raise its financial obligations and drain profitability. It exited the first quarter with long-term debt of $1.97 billion. Considering its high debt level, its cash and cash equivalents of $1.06 billion do not look company has been dealing with escalating operating costs and expenses. After witnessing a surge of 15.1% year over year in 2024, its cost of revenues increased 1.6% in the first quarter. Also, in 2024, its selling, general and administrative expenses surged 8.8% due to additional operational expenditure from the acquisition of Evoqua. Some better-ranked stocks from the same space are discussed Signal Corporation FSS currently carries a Zacks Rank #2 (Buy). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks delivered a trailing four-quarter average earnings surprise of 6.4%. In the past 60 days, the Zacks Consensus Estimate for Federal Signal's 2025 earnings has increased 1.6%.H2O America HTO currently carries a Zacks Rank of 2. HTO delivered a trailing four-quarter average earnings surprise of 23.3%. In the past 60 days, the consensus estimate for HTO's 2025 earnings has increased 1.4%.AptarGroup, Inc. ATR presently carries a Zacks Rank of 2. ATR delivered a trailing four-quarter average earnings surprise of 7.3%. In the past 60 days, the consensus estimate for AptarGroup's 2025 earnings has increased 5.4%. Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report AptarGroup, Inc. (ATR) : Free Stock Analysis Report Federal Signal Corporation (FSS) : Free Stock Analysis Report Xylem Inc. (XYL) : Free Stock Analysis Report H2O America (HTO) : Free Stock Analysis Report This article originally published on Zacks Investment Research ( Zacks Investment Research
Yahoo
7 days ago
- Business
- Yahoo
Xylem (XYL): Buy, Sell, or Hold Post Q1 Earnings?
Since December 2024, Xylem has been in a holding pattern, posting a small loss of 1.6% while floating around $125.70. Given the underwhelming price action, is now a good time to buy XYL? Or should investors expect a bumpy road ahead? Find out in our full research report, it's free. Formed through a spinoff, Xylem (NYSE:XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector. A company's long-term sales performance can indicate its overall quality. Any business can have short-term success, but a top-tier one grows for years. Luckily, Xylem's sales grew at an impressive 10.9% compounded annual growth rate over the last five years. Its growth beat the average industrials company and shows its offerings resonate with customers. We track the long-term change in earnings per share (EPS) because it highlights whether a company's growth is profitable. Xylem's solid 10.1% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable. A company's ROIC, or return on invested capital, shows how much operating profit it makes compared to the money it has raised (debt and equity). We like to invest in businesses with high returns, but the trend in a company's ROIC is what often surprises the market and moves the stock price. Over the last few years, Xylem's ROIC averaged 4.4 percentage point decreases each year. If its returns keep falling, it could suggest its profitable growth opportunities are drying up. We'll keep a close eye. Xylem has huge potential even though it has some open questions, but at $125.70 per share (or 26.4× forward P/E), is now the right time to buy the stock? See for yourself in our in-depth research report, it's free. The market surged in 2024 and reached record highs after Donald Trump's presidential victory in November, but questions about new economic policies are adding much uncertainty for 2025. While the crowd speculates what might happen next, we're homing in on the companies that can succeed regardless of the political or macroeconomic environment. Put yourself in the driver's seat and build a durable portfolio by checking out our Top 5 Strong Momentum Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025). Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-small-cap company Exlservice (+354% five-year return). Find your next big winner with StockStory today. Sign in to access your portfolio
Yahoo
13-05-2025
- Business
- Yahoo
XYL Q1 Earnings Call: Xylem Lifts Revenue Outlook Amid Tariff Pressures and Operational Restructuring
Water technology company Xylem (NYSE:XYL) beat Wall Street's revenue expectations in Q1 CY2025, with sales up 1.8% year on year to $2.07 billion. The company expects the full year's revenue to be around $8.75 billion, close to analysts' estimates. Its non-GAAP profit of $1.03 per share was 7.9% above analysts' consensus estimates. Is now the time to buy XYL? Find out in our full research report (it's free). Revenue: $2.07 billion vs analyst estimates of $2.04 billion (1.8% year-on-year growth, 1.5% beat) Adjusted EPS: $1.03 vs analyst estimates of $0.95 (7.9% beat) Adjusted EBITDA: $470 million vs analyst estimates of $403.7 million (22.7% margin, 16.4% beat) The company lifted its revenue guidance for the full year to $8.75 billion at the midpoint from $8.65 billion, a 1.2% increase Management reiterated its full-year Adjusted EPS guidance of $4.60 at the midpoint Operating Margin: 11.2%, in line with the same quarter last year Free Cash Flow was -$38 million, down from $15 million in the same quarter last year Organic Revenue rose 3.3% year on year (7.1% in the same quarter last year) Market Capitalization: $30.97 billion Xylem's first quarter results reflected broad-based demand across its business segments, with management attributing performance to operational discipline, simplification initiatives, and continued progress in integrating recent acquisitions. CEO Matthew Pine underscored that the company's diversified water solutions portfolio and exposure to stable customer operating budgets helped Xylem navigate ongoing volatility, while productivity gains and targeted pricing actions offset inflation and mix challenges. Pine stated, "We are leaning into our high-impact culture, simplifying processes and systems, and reorienting our structure to improve customer focus." Looking ahead, Xylem's leadership maintained its full-year earnings outlook and lifted its revenue guidance, citing a strong backlog, the effects of recent price increases, and anticipated benefits from ongoing restructuring. However, management also acknowledged uncertainty around tariffs and potential softening in demand later this year. CFO Bill Grogan explained, "We have pricing and supply chain programs in place designed to offset the majority of the impacts from the current tariff scheme," but noted that the ultimate demand response remains a key variable for the coming quarters. Management highlighted that the first quarter's results were shaped by pricing discipline, productivity initiatives, and continued organizational changes. Several key business trends and market developments were discussed: Pricing Strategies Offset Headwinds: Leadership attributed margin stability and revenue gains to swift implementation of both price increases and surcharges across the portfolio, mitigating inflation and tariff impacts. Organizational Simplification Progress: The ongoing restructuring—moving to a more focused divisional model and streamlining management—was identified as a factor in improved productivity and customer responsiveness. Management reported that decision-making speed and focus had already improved across global teams. Evoqua Integration Momentum: The integration of Evoqua, acquired in 2023, continues to deliver cost synergies ahead of plan and is now beginning to generate revenue synergies, particularly in industrial verticals like microelectronics and energy. Tariff Mitigation Measures: Management detailed actions such as dual sourcing and reducing exposure to Chinese imports, alongside leveraging trade agreements like USMCA, to manage the incremental cost from tariffs. Pricing actions are expected to continue adapting to changes in the trade environment. Segment-Specific Trends: Measurement & Control Solutions (MCS) saw mixed results due to energy/water mix, with management noting near-term margin pressure but expected normalization in the second half. Orders in Applied Water and Water Infrastructure were supported by building solutions and treatment demand, respectively, except for ongoing weakness in China. Xylem's outlook for the year is shaped by expectations of continued demand resilience, execution of restructuring initiatives, and the uncertain effects of tariffs on pricing and end-market demand. Tariff and Pricing Dynamics: Management expects ongoing tariffs to be manageable through further price actions and supply chain adjustments, but acknowledged some risk of demand softening in the second half of the year as higher prices work through the system. Operational Restructuring Benefits: The simplification of Xylem's operating model is anticipated to yield further productivity gains and margin improvements, especially as segment leaders gain greater accountability and decision-making power. M&A and Portfolio Optimization: Continued integration of acquisitions, such as Evoqua, and potential divestitures of non-core assets are expected to enhance Xylem's focus on advanced treatment and intelligent solutions, supporting both growth and profitability goals. Deane Dray (RBC Capital Markets): Asked whether Xylem or its customers were prepositioning inventory ahead of tariffs and about assumptions for price elasticity; management replied there was minimal inventory pull-forward and that some demand decline is expected but is manageable. Mike Halloran (Baird): Inquired about the mechanics and timing of price increases and surcharges, and their impact on the second quarter; CEO Pine explained that actions were already in place with effects skewed to the back half of the year. Scott Davis (Melius Research): Questioned whether the current environment accelerates Xylem's M&A strategy and portfolio optimization; Pine confirmed active M&A pursuits and ongoing divestitures of non-core assets, emphasizing strategic fit and financial discipline. Nathan Jones (Stifel): Asked how tariffs influence Xylem's competitive positioning and the impact of organizational realignment; management cited portfolio diversification and a new divisional structure as key strengths in facing economic and competitive pressures. Sara Borodinski (Jefferies): Sought clarity on the trajectory of Measurement & Control Solutions margins and order growth; CFO Grogan indicated that margin pressure from mix would bottom in the second quarter and improve sequentially, with order activity expected to normalize in the second half. Looking forward, the StockStory team will closely monitor (1) the extent to which Xylem's price increases affect customer demand, particularly in the second half of the year as tariff impacts flow through, (2) the pace and effectiveness of operational restructuring and integration of Evoqua, and (3) order trends in Measurement & Control Solutions and Water Infrastructure segments. Developments in global trade policy and the company's ability to execute on M&A and portfolio optimization will also be important to track. Xylem currently trades at a forward P/E ratio of 26.7×. In the wake of earnings, is it a buy or sell? Find out in our free research report. Market indices reached historic highs following Donald Trump's presidential victory in November 2024, but the outlook for 2025 is clouded by new trade policies that could impact business confidence and growth. While this has caused many investors to adopt a "fearful" wait-and-see approach, we're leaning into our best ideas that can grow regardless of the political or macroeconomic climate. Take advantage of Mr. Market by checking out our Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 176% over the last five years. Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Tecnoglass (+1,754% five-year return). Find your next big winner with StockStory today.
