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Everpure (P): analysis traps
Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q2 FY27, to Aug 2, 2026, filed Sep 4, 2026; rules v1.1
Everpure (P): 3 rules of 10 triggered on the filings to Aug 2, 2026: stock compensation added back = no economic cost; receivables growing = future cash is certain; adjusted profit = economic profit. 2 to review; 1 with insufficient data; 2 not applicable. Each is a question to verify, with the normal explanation that would produce the same figures.
Check these first
Stock compensation added back = no economic cost Triggered · severity high · confidence high
Stock compensation was $482M, 13.1% of revenue, in FY26; buybacks were $343M (0.7× the SBC) and buybacks did not cover it. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
Innocent reading: A young company paying in equity while it scales; intensity falls as revenue grows.
Receivables growing = future cash is certain Triggered · severity high · confidence medium
Receivables grew 94% year over year in Q2 FY27 against revenue growth of 38%, and the quarter before 116% against 35%; days sales outstanding is 73 against a median of 64 over the eight quarters before. More of each quarter's revenue is still owed by customers.
Innocent reading: Seasonality: a quarter that always ends with big shipments.
Adjusted profit = economic profit Triggered · severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 76% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
Innocent reading: A genuine one-off this year (an impairment, a settlement) that happens to span several quarters.
Every rule
A01 FCF growth = the business improved Not triggered confidence high
Free cash flow rose $89M to $616M; working capital and lower capex explain 0% of it, so most of the gain is in operating cash flow itself.
The figures and how they are read
| Fiscal year before | FY25 |
| Fiscal year | FY26 |
| Operating cash flow, year before | $754M |
| Operating cash flow | $880M |
| Capex, year before | $227M |
| Capex | $264M |
| Free cash flow, year before | $527M |
| Free cash flow | $616M |
| Change in FCF | $89M |
| Change in capex | $38M |
| Working capital: change in its cash contribution | −$80M |
| Of which: capex cut | 0.00 |
| Of which: working capital released | 0.00 |
| Share of the increase that need not repeat | +0.0% |
| Operating cash flow before working capital: change | 206196000.00 |
FCF = operating cash flow − cash capex; ΔFCF = ΔOCF − ΔCapEx; the working-capital part is the change in the cash-bridge items (receivables, inventory, payables, accruals), with the sign of the cash flow statement
Source: FY26 (cash flow statement, fiscal year) · FY25 (cash flow statement, fiscal year before)
A07 Stock compensation added back = no economic cost Triggered severity high · confidence high
Stock compensation was $482M, 13.1% of revenue, in FY26; buybacks were $343M (0.7× the SBC) and buybacks did not cover it. 'Adjusted' figures that add SBC back treat pay in shares as free; the cost is borne by every shareholder as dilution, or by the cash spent to buy the shares back.
The figures and how they are read
| Fiscal year | FY26 |
| Stock compensation | $482M |
| Revenue | $3.7B |
| SBC / revenue | +13.2% |
| Buybacks | $343M |
| Buybacks / SBC | 0.7 |
| Diluted shares, year before | 342.7M shares |
| Diluted shares | 343.0M shares |
| Diluted shares: change | +0.1% |
SBC / revenue from the cash flow statement's add-back; the diluted weighted share count year over year; buybacks from the financing section
Source: FY26 (stock compensation, buybacks and the diluted share count, fiscal year)
What would explain it innocently
- A young company paying in equity while it scales; intensity falls as revenue grows
- Buybacks at prices below intrinsic value make up for the dilution over time
- A one-off grant (an acquisition, a founder award) rather than a steady level
What to look for in the filing
- The share count after the latest buybacks (the next 10-Q's cover)
- The price paid for the buybacks against the shares' value
- Unvested awards outstanding
What would show the trap does not apply
- The diluted share count falls over two years with buybacks at least equal to the stock compensation
- Stock compensation falls as a share of revenue in each of the next two years
Look again: next filing.
B02 Receivables growing = future cash is certain Triggered severity high · confidence medium
Receivables grew 94% year over year in Q2 FY27 against revenue growth of 38%, and the quarter before 116% against 35%; days sales outstanding is 73 against a median of 64 over the eight quarters before. More of each quarter's revenue is still owed by customers.
The figures and how they are read
| Quarter | Q2 FY27 |
| Revenue, year over year | +37.7% |
| Receivables, year over year | +93.7% |
| Quarter before | Q1 FY27 |
| Revenue y/y, quarter before | +35.2% |
| Receivables y/y, quarter before | +115.6% |
| Days sales outstanding | 73.5 |
| DSO, median of eight quarters | 63.8 |
| Receivables | $1.0B |
| Revenue | $1.2B |
receivables and revenue against the same quarter a year earlier; DSO = receivables / quarterly revenue × days, against the median of the eight quarters before
Source: Q2 FY27 (receivables and revenue) · Q2 FY26 (the same quarter a year earlier)
What would explain it innocently
- Seasonality: a quarter that always ends with big shipments
- An acquisition brought its own receivables
- New business with longer standard terms (government, large enterprise)
- Currency: receivables booked in a strengthening currency
What to look for in the filing
- The receivables ageing and the allowance for credit losses
- Any factoring or receivables sold (and whether with recourse)
- Credit terms by customer group
What would show the trap does not apply
- Receivables fall back in line with revenue in the next quarter and DSO returns to its history
- The 10-Q attributes the increase to a disclosed one-off (a large customer's timing, an acquisition) and the allowance for doubtful accounts did not rise
Look again: next filing.
B08 Adjusted profit = economic profit Triggered severity high · confidence low
Adjusted EPS was at least 10% above GAAP in 3 of the last 3 quarters (on average 76% above). Costs excluded every quarter (restructuring, stock compensation, amortisation of acquired intangibles, litigation) are a recurring cost of the business, not a one-off.
The figures and how they are read
| Quarter / adjusted EPS / GAAP EPS / gap | 2025-10-31 / 0.58 / 0.16 / 0.724; 2026-04-30 / 0.47 / 0.07 / 0.851; 2026-07-31 / 0.7 / 0.21 / 0.7 |
| Quarters with adjusted ≥ 10% above GAAP | 3 |
| Quarters compared | 3 |
| Latest gap | +70.0% |
the analysts' 'actual' (usually the company's adjusted EPS) against GAAP net income ÷ diluted shares for the matching quarter; a gap of 10% or more counts (the stand-in until three releases' reconciliation tables are on file)
Source: 2025-10-31 (adjusted 0.58 vs GAAP 0.16) · 2026-04-30 (adjusted 0.47 vs GAAP 0.07) · 2026-07-31 (adjusted 0.70 vs GAAP 0.21)
What would explain it innocently
- A genuine one-off this year (an impairment, a settlement) that happens to span several quarters
- Amortisation of acquired intangibles, which many investors also exclude by choice
- The analysts' 'actual' is not the company's own adjusted figure
What to look for in the filing
- The reconciliation table in the earnings release: which items, how much, how often
- Whether the same items were excluded in earlier years
What would show the trap does not apply
- The reconciliation shows the excluded items ending (a restructuring with its final charge, a settlement paid) and the gap to GAAP closes in the next quarters
- The excluded items are only amortisation of acquired intangibles and the cash paid for the deals is in the investing cash flow
Look again: next filing.
C02 Low net debt = no refinancing risk Insufficient data
no debt figure could be read from the balance sheet (the filing may tag it in other lines)
D03 EPS growth = profit growth Not triggered confidence high
EPS rose 54% and net income rose 57% in Q2 FY27; the share count rose 2.3%: EPS growth follows profit growth.
The figures and how they are read
| Quarter | Q2 FY27 |
| Quarter before | Q2 FY26 |
| EPS, year before | $0.14 |
| EPS | $0.21 |
| Net income, year before | $47M |
| Net income | $74M |
| Diluted shares, year before | 337.7M shares |
| Diluted shares | 345.6M shares |
| EPS growth | +53.6% |
| Net income growth | +57.4% |
| Diluted shares: change | +2.3% |
| eps from profit | $0.08 |
| eps from share count | -$0.01 |
EPS and net income against the same quarter a year earlier; the EPS bridge attributes the change to profit first, then to the share count (the order is fixed and disclosed)
Source: Q2 FY27 (net income, diluted shares, EPS) · Q2 FY26 (the same quarter a year earlier)
E02 Low P/E at a cyclical peak = undervalued To review confidence medium
Net income of $253M is at a high against a median of $61M over eight years; at 132.0× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (545.3×).
The figures and how they are read
| market value | $33.4B |
| net income ttm | $253M |
| pe ttm | 132.00 |
| net income median fy | $61M |
| pe mid cycle | 545.30 |
| net income peak fy | $188M |
| years | FY19 / -178.0; FY20 / -201.0; FY21 / -282.0; FY22 / -143.0; FY23 / 73.0; FY24 / 61.0; FY25 / 107.0; FY26 / 188.0 |
| down years in window | 3 |
P/E on the trailing twelve months' net income against the P/E on the median net income of the last eight fiscal years (a mid-cycle stand-in); 'at a peak' = this year's profit at or above 90% of the best year and at least 1.3× the median
Source: Q2 FY27 (net income, trailing twelve months)
What would show the trap does not apply
- Profit holds at this level through the next two years (the eight-year peak was a new base, not a top)
- The industry's capacity and prices stay where they are rather than reverting
Look again: next filing.
E07 A precise DCF value = the true value To review confidence high
The DCF's point value is 7.22 a share (price 96.75); 89% of it is the terminal value, a number about years no one has seen. Moving operating margin by ±3 pts alone takes it from 2.10 to 12.33; across every method the research ran the range is -14 to 215. The value is a range; the decimals are not information.
The figures and how they are read
| dcf value | 7.22 |
| price | 96.75 |
| terminal value share | +89.4% |
| swing by input | Operating margin / ±3 pts / 2.1 / 12.33; Working capital per $ of growth / ±10 pts / 6.16 / 8.28; Revenue growth (each year) / ±5 pts / 6.28 / 8.33; WACC / ±1 pt / 6.53 / 8.06 |
| range all methods | -13.8; 215.0 |
the DCF's point value against the share of it that is the terminal value and the value at each input moved by one step (growth ±5 pts, WACC ±1 pt, margin ±3 pts …); the range across every method the research ran
Source: 2026-11-08 (valuation research)
What would explain it innocently
- A stable, mature business with a narrow range of outcomes, where the point value is a fair summary
- The inputs that matter most are themselves well known (a regulated return, a long contract)
What to look for in the filing
- Which input you believe differs from the research's and why
- What the price implies for growth (the reverse DCF on the fair-value page)
What would show the trap does not apply
- The DCF's value is robust to the terminal growth and discount rate (the range's low end is still above the price)
- The company's cash flows over the next three years track the DCF's early years
Look again: next filing.
J06 A bank's low P/E and high profit = safe Not applicable
not a bank
J08 A REIT's low net income = the dividend is unsafe Not applicable
not a REIT
What the statuses mean
Triggered: the filings show the pattern; read the normal explanations and the missing evidence before concluding anything. To review: one quarter or a weak signal; a reader's judgement, not a pattern. Not triggered: the pattern is absent on these figures. Insufficient data: the filings read so far do not hold what the rule needs; this is not a clean bill. Not applicable: the rule is not meant for this kind of company (a bank's working capital, a loss-making quarter's EPS growth). Out of date: the latest filing is more than fifteen months old.
Severity is what the pattern could mean for cash, value or solvency; confidence is how reliable the inputs and the reading are. The two are kept apart.
Record a view
A reader's judgement, grounds, what would change it and the next review; kept in the browser (needs JavaScript).
Every rule and the companies it triggers on → Everpure: cash flow → Earnings quality score →
Each rule reads the company's own filings by a fixed formula and says what would explain the same figures innocently. A triggered rule is a question to verify, not a finding of manipulation, and not a view on the stock. Missing data is shown as missing, never as clear. Not investment advice.