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Zurn Elkay Water Solutions (ZWS): analysis traps

Where its figures could mislead a reader, and what to check before taking them at face value · Data: Q3 2026, to Sep 30, 2026, filed Oct 27, 2026; rules v1.1

Zurn Elkay Water Solutions (ZWS): 0 rules of 10 triggered on the filings to Sep 30, 2026. 2 to review; 2 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

Every rule

A01 FCF growth = the business improved Insufficient data

fewer than two fiscal years with operating cash flow and capital expenditure on file

A07 Stock compensation added back = no economic cost Not triggered confidence high

Stock compensation is 2.4% of revenue: small enough that adding it back changes little.

B02 Receivables growing = future cash is certain Not triggered confidence medium

Receivables grew 14% against revenue 9% in Q3 2026; DSO 50 against a median of 48: collections are keeping pace with sales.

B08 Adjusted profit = economic profit Insufficient data

no reconciliation table read from the releases yet and fewer than three quarters with both an adjusted and a GAAP EPS

C02 Low net debt = no refinancing risk Not triggered confidence medium

$900K comes due within a year, 799.3× covered by cash and investments of $307M plus $412M of free cash flow.

D03 EPS growth = profit growth Not triggered confidence high

EPS rose 25% and net income rose 23% in Q3 2026; the share count fell 1.3%: EPS growth follows profit growth.

E02 Low P/E at a cyclical peak = undervalued To review confidence medium

Net income of $291M is at a high against a median of $147M over eight years; at 25.1× the market is not pricing it as cheap, but a multiple on this year's profit still understates the mid-cycle one (49.8×).

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 35.10 a share (price 43.47); 69% of it is the terminal value, a number about years no one has seen. Moving revenue growth (each year) by ±5 pts alone takes it from 28.53 to 42.92; across every method the research ran the range is 13 to 99. The value is a range; the decimals are not information.

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

Record a view

Every rule and the companies it triggers on → Zurn Elkay Water Solutions: 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.