Abstract
Zurn Water Solutions will report fiscal results on February 03, 2026 Post Market, and expectations point to year-over-year growth in revenue and earnings, with analysts signaling constructive views on margin resilience and demand across institutional and commercial channels.
Market Forecast
Consensus for the current quarter indicates revenue of USD 400.97 million, an adjusted EPS of USD 0.34, and EBIT of USD 77.25 million, with year-over-year growth of 9.44% for revenue, 21.93% for adjusted EPS, and 13.36% for EBIT; gross profit margin and net profit margin are expected to remain resilient, supported by a favorable mix and pricing. The company’s main business remains weighted to institutional customers, with recent momentum in commercial solutions; outlook highlights continued uptake of specification-driven products and water management systems. The most promising segment is institutional customers, where revenue last quarter was USD 223.50 million, with solid sequential demand and specification wins that should support year-over-year expansion.
Last Quarter Review
In the previous quarter, Zurn Water Solutions delivered revenue of USD 455.40 million, a gross profit margin of 44.07%, GAAP net profit attributable to the parent company of USD 61.80 million, a net profit margin of 13.57%, and adjusted EPS of USD 0.43, representing year-over-year growth of 11.07% for revenue and 26.47% for adjusted EPS. A notable highlight was outperformance versus forecasts, with revenue and EPS surpassing estimates on better-than-expected operational execution and price realization. Main business highlights included institutional revenue of USD 223.50 million, commercial revenue of USD 128.30 million, and other revenue of USD 103.60 million, reflecting balanced growth across end markets and sustained demand from building upgrades and retrofit activity.
Current Quarter Outlook
Main Business: Institutional Solutions
Institutional customers form the largest revenue base for Zurn Water Solutions, and their spend patterns are anchored by multi-year capital programs in education, healthcare, and public sector facilities. The current quarter’s setup suggests that specification strength and retrofit cycles continue to backstop volumes, while pricing and mix from higher-value plumbing and water safety products sustain margins. With institutional revenue of USD 223.50 million last quarter, management’s focus on project execution, channel availability, and lead-time discipline should help maintain order conversion rates. The quarter-on-quarter net profit growth of 22.38% in the previous period and the 44.07% gross margin baseline imply stable cost absorption, and lower input cost volatility may further support gross profit capture. Attention will center on the cadence of project releases and the rate of specification wins, which can shift quarterly revenue timing but typically underpin full-year growth trajectories.
Most Promising Business: Commercial Solutions
Commercial solutions showed strong engagement last quarter with revenue of USD 128.30 million, benefitting from tenant improvement spending, compliance-driven upgrades, and the continued adoption of water-efficient fixtures. For the current quarter, expectations are that commercial orders remain healthy in regions with steady construction activity, while pricing actions taken through the last two quarters flow through to margins. The revenue forecast suggests overall company growth of 9.44%, and this segment can contribute meaningfully if retrofit demand holds and supply chain execution remains clean. Product differentiation—particularly in backflow prevention, drainage, and hygienic solutions—has historically supported cross-sell opportunities, helping expand average order value. The mix within commercial tends to be slightly more sensitive to macro sentiment; however, diversified exposure across sub-verticals can reduce single-point risk and support stable margin delivery near the 44.07% prior quarter level.
Stock Price Drivers This Quarter
Three core factors are likely to influence the stock this quarter: margin trajectory, order quality in institutional projects, and the pace of EPS delivery relative to guidance. The estimated adjusted EPS of USD 0.34 implies year-over-year growth of 21.93%, which investors will compare with the prior quarter’s USD 0.43 outperformance and the 13.57% net profit margin baseline to assess sustainability. If the gross profit margin profile remains close to 44.07%, the market should view pricing discipline and input cost management as intact, reinforcing valuation support. Revenue timing within larger projects is a recurring point of scrutiny; clarity on backlog conversion and specification wins in education and healthcare can reassure investors that the 9.44% revenue growth estimate is achievable. Any commentary on mix shifts toward higher-value systems and the leverage on SG&A could further shape views on incremental EBIT performance, with USD 77.25 million projected for the quarter and year-over-year growth of 13.36%.
Analyst Opinions
The prevailing institutional stance is bullish. A top sell-side analyst at Stifel Nicolaus, Nathan Jones, maintained a Buy rating on Zurn Water Solutions, with a price target of USD 54.00, reflecting confidence in revenue expansion and margin stability into the current quarter. The majority positive view centers on consistent execution across institutional channels, specification-driven demand, and resilient gross margins anchored by product mix and pricing. Analysts point to the last quarter’s beat on revenue and EPS versus estimates as validating operational momentum, and they project that the company can deliver the forecasted USD 400.97 million in revenue and USD 0.34 EPS while maintaining EBIT around USD 77.25 million. The bullish case emphasizes durable project pipelines, continued adoption of water management solutions across public and private buildings, and the benefits of scale in procurement and manufacturing that support earnings quality. Market watchers will parse the February 03, 2026 Post Market commentary for backlog visibility and margin cadence; constructive signals on these fronts would reinforce the favorable outlook among institutions.Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
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