It's been a pretty great week for Zurn Elkay Water Solutions Corporation (NYSE:ZWS) shareholders, with its shares surging 12% to US$33.73 in the week since its latest first-quarter results. It looks like a credible result overall - although revenues of US$389m were in line with what the analysts predicted, Zurn Elkay Water Solutions surprised by delivering a statutory profit of US$0.26 per share, a notable 17% above expectations. Earnings are an important time for investors, as they can track a company's performance, look at what the analysts are forecasting for next year, and see if there's been a change in sentiment towards the company. So we gathered the latest post-earnings forecasts to see what estimates suggest is in store for next year.

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Taking into account the latest results, the consensus forecast from Zurn Elkay Water Solutions' eight analysts is for revenues of US$1.62b in 2025. This reflects a reasonable 2.4% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to accumulate 8.8% to US$1.07. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$1.61b and earnings per share (EPS) of US$1.06 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.

View our latest analysis for Zurn Elkay Water Solutions

It will come as no surprise then, to learn that the consensus price target is largely unchanged at US$36.14. That's not the only conclusion we can draw from this data however, as some investors also like to consider the spread in estimates when evaluating analyst price targets. The most optimistic Zurn Elkay Water Solutions analyst has a price target of US$40.00 per share, while the most pessimistic values it at US$30.00. Even so, with a relatively close grouping of estimates, it looks like the analysts are quite confident in their valuations, suggesting Zurn Elkay Water Solutions is an easy business to forecast or the the analysts are all using similar assumptions.

These estimates are interesting, but it can be useful to paint some more broad strokes when seeing how forecasts compare, both to the Zurn Elkay Water Solutions' past performance and to peers in the same industry. It's pretty clear that there is an expectation that Zurn Elkay Water Solutions' revenue growth will slow down substantially, with revenues to the end of 2025 expected to display 3.2% growth on an annualised basis. This is compared to a historical growth rate of 8.9% over the past five years. Compare this against other companies (with analyst forecasts) in the industry, which are in aggregate expected to see revenue growth of 5.2% annually. So it's pretty clear that, while revenue growth is expected to slow down, the wider industry is also expected to grow faster than Zurn Elkay Water Solutions.

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The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. On the plus side, there were no major changes to revenue estimates; although forecasts imply they will perform worse than the wider industry. The consensus price target held steady at US$36.14, with the latest estimates not enough to have an impact on their price targets.

With that in mind, we wouldn't be too quick to come to a conclusion on Zurn Elkay Water Solutions. Long-term earnings power is much more important than next year's profits. We have estimates - from multiple Zurn Elkay Water Solutions analysts - going out to 2027, and you can see them free on our platform here.

You still need to take note of risks, for example - Zurn Elkay Water Solutions has  1 warning sign  we think you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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