ZWS Should I Buy
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Zurn Elkay Water Solutions Corp (ZWS) is not a strong buy for a beginner investor with a long-term strategy at the moment. While the company has demonstrated strong financial performance and positive analyst sentiment, insider selling and the lack of significant trading signals suggest caution. Additionally, technical indicators show no strong momentum for immediate entry, and the stock's short-term trend indicates potential downside risk.
The technical indicators show a mixed picture. The MACD is positive at 0.365, indicating bullish momentum, but it is contracting. The RSI at 64.533 is neutral, showing no overbought or oversold conditions. Moving averages are bullish (SMA_5 > SMA_20 > SMA_200), suggesting an upward trend. However, the stock is near resistance levels (R1: 52.737), which may limit further immediate upside. Short-term candlestick analysis indicates a 60% chance of a -1.03% drop in the next day and -4.43% in the next week.
Strong Q4 financial performance with revenue up 9.85% YoY, net income up 15.66% YoY, and EPS up 19.05% YoY.
Analysts have raised price targets, with several maintaining positive ratings.
The company has demonstrated robust organic sales growth and effective margin management.
Insider selling has increased significantly (1671.78% over the last month), which could indicate a lack of confidence from those closest to the company.
Hedge funds remain neutral, showing no significant interest in the stock.
Short-term stock trend analysis predicts potential downside risk over the next week and month.
In Q4 2025, Zurn Elkay Water Solutions Corp reported revenue of $407.2M, up 9.85% YoY. Net income increased by 15.66% YoY to $42.1M, and EPS rose by 19.05% YoY to $0.25. Gross margin improved to 40.79%, up 3.29% YoY, reflecting strong operational efficiency and profitability.
Analysts are generally positive on ZWS, with multiple firms raising price targets following strong Q4 results. Oppenheimer raised the target to $57 with an Outperform rating, and Stifel raised it to $59 with a Buy rating. However, some firms, like Baird and Goldman Sachs, maintain Neutral ratings, indicating mixed sentiment on the stock's immediate upside potential.
