Zurn Elkay Stock Plunges 8%, Wiping Out $690 Million, After Fourth-Quarter Sales Forecast Falls Short
The water-products maker guided fourth-quarter sales to $430 million to $437 million and sees a softer 2027 market.
Zurn Elkay Water Solutions, which makes filtered drinking water stations, valves, drains and restroom fixtures, saw its shares fall 8.46% to $44.99 in Wednesday trading as of 10:22 a.m. ET, erasing about $690 million in market value. The drop came the session after the company guided fourth-quarter sales below its third-quarter pace and said it sees no lift from end markets next year.
A fourth-quarter step down
The company guided fourth-quarter net sales of $430 million to $437 million and adjusted EBITDA of $120 million to $123 million. Management set a 40% incremental margin goal.
On the earnings call, management called the 2027 market "a couple points" lower. Its 2027 plan leans on price, share gains and new products rather than market growth.
The shares were on pace for their biggest one-day drop in at least 275 trading sessions, since Sept. 24, 2025.
A better third quarter
The guidance followed third-quarter revenue of $495.1 million, up 8.7% from a year earlier. The company also raised its dividend 18% to $0.52 per share.
In its earnings release, management said it believes it expanded its served markets by $400 million in 2026, in part through a new digital mixing valve.
Little cushion near the low
Zurn Elkay was up about 6% year to date as of Tuesday's close, trailing the S&P 500's gain of about 13%. Before Wednesday's slide the stock sat 18% below its 52-week high of $55.00; it now trades about 4% above its 52-week low of $43.06.
The company's market value was about $7.5 billion. Its customers are mainly institutional and commercial building projects such as schools, hospitals and offices, sold through reps, wholesalers and distributors.
Fourth-quarter results will show whether sales land inside the $430 million to $437 million range.
Sources
- Zurn Water (ZWS) Q3 Earnings and Revenues Surpass Estimates — Yahoo Finance
- Zurn Elkay Water Solutions Non-GAAP EPS of $0.52 beats by $0.02, revenue of $495.1M beats by $1.73M (NYSE:ZWS) — seekingalpha.com
- Zurn Elkay Water Solutions Reports Third Quarter 2026 Financial Results – Company Announcement - FT.com — Financial Times
- Select Water Solutions (WTTR) Stock Looks Above Fair Value After Its 261% Run — Yahoo Finance
- Document — sec.gov
- Zurn Elkay Posts Higher Profit, Lifts Dividend 18%, But Guides Fourth-Quarter Sales Lower — SEC filing
- Zurn Elkay Water Solutions — Form 10-Q for the quarter ended 2026-09-30 (quarterly results) — SEC EDGAR
