Is Xylem Inc. (XYL) Fairly Valued?
Xylem Inc. valuation review using P/E, fair value, revenue growth, EPS growth, net margin, and TGMCharts chart exhibits as of July 10, 2026.
By TGMCharts Research · Data as of · Updated
Xylem Inc. does not get a one-metric verdict. The stock trades at 30.15x trailing earnings and the analyst DCF (FMP) reference is $149, so the valuation read depends on whether growth and margins support that price.
The core evidence is the relationship between price, earnings, fair value, and business support. Five-year revenue CAGR is 13.13%, five-year EPS CAGR is 22.76%, and net margin is 10.70%. Those facts decide whether the multiple is defensible or stretched.
- Xylem Inc. closed at $121 on July 10, 2026.
- Trailing P/E is 30.15x and price-to-sales is 3.24x.
- Analyst DCF (FMP) is $149 with margin of safety at 22.75%.
- Five-year revenue CAGR is 13.13% and five-year EPS CAGR is 22.76%.
- Earnings yield is 3.32% and net margin is 10.70%.
Valuation Setup
The market price, model anchor, growth support, and profitability facts behind the valuation read.
The Read
Xylem Inc. should be read as a valuation question with a specific burden of proof: does the market price have enough earnings, growth, and margin support to justify the multiple? The stock closed at $121 on July 10, 2026, trades at 30.15x trailing earnings, and shows an analyst-DCF (FMP) margin of safety of 22.75% — an independent reference, not a TGMCharts model output.
The answer cannot come from one ratio. This note treats P/E, fair value, price-to-sales, earnings yield, revenue growth, EPS growth, and margin quality as a linked evidence set. If those lines reinforce each other, the valuation can be defended with more confidence; if they split, the final read has to stay cautious.
Price And Multiple Context
The price and multiple section asks what the market is paying before judging whether that price is justified. Price-to-sales is 3.24x and earnings yield is 3.32%, so the first chart group keeps the market price, P/E history, and sales multiple in the same frame rather than treating the headline P/E as the whole story.
XYL P/E ratio Chart
The trailing earnings multiple is the main valuation exhibit because it connects the market price to reported earnings.
Latest P/E ratio: 30.15x as of July 10, 2026.
A P/E ratio of 30.15x has to be judged against the company's five-year EPS CAGR of 22.76%. If the multiple is high while EPS support is ordinary, the valuation thesis becomes more dependent on investor confidence than on fresh earnings power.
XYL price-to-sales Chart
Price-to-sales gives a second valuation lens when margins and earnings can move around the cycle.
Latest price-to-sales ratio: 3.24x.
Price-to-sales at 3.24x is most useful beside net margin of 10.70%. A richer sales multiple is easier to defend when margin quality is durable rather than temporarily elevated.
Fair Value And Margin Of Safety
The fair-value section is a reference point beside the market multiple. The stored fair value comes from the analyst DCF (FMP) — an independent third-party model, not a TGMCharts output — at $149, with a margin of safety of 22.75%. Treat it as one input rather than a verdict: see the Xylem Inc. DCF page for TGMCharts' own scenario range, which can differ materially.
The valuation at a glance
Each input on its own line: what the stock costs against earnings and sales, the model's fair value and how far price sits from it, and the growth and margins behind the business.
XYL earnings yield Chart
Earnings yield reframes valuation from an owner's-yield perspective rather than a multiple perspective.
Latest earnings yield: 3.32%.
The earnings yield of 3.32% is the counterweight to the P/E ratio. If the yield is thin relative to the quality and growth profile, the valuation case needs more help from future compounding.
Growth Support
Growth support has to show up in both the top line and the per-share outcome. Five-year revenue CAGR is 13.13% and five-year EPS CAGR is 22.76%. The revenue and EPS exhibits sit here because this is where the valuation note decides whether the multiple is being supported by actual business expansion or mainly by investor willingness to pay more.
XYL revenue
Revenue history tests whether the valuation is being supported by real business expansion.
Five-year revenue CAGR: 13.13%. This is endpoint-to-endpoint from the fiscal years shown — a depressed start year can inflate it, so read it against the recent bars.
Revenue growth is the business-expansion evidence behind the valuation read. A five-year revenue CAGR of 13.13% helps show how much of the valuation story is coming from company growth instead of only multiple expansion.
XYL EPS
EPS history checks whether reported earnings are keeping pace with the market multiple.
Five-year EPS CAGR: 22.76%. This is endpoint-to-endpoint from the fiscal years shown — a depressed or negative start year can inflate it, so read it against the recent bars.
A five-year EPS CAGR of 22.76% is the clearest support figure for a P/E-based conclusion. If EPS growth slows while the multiple remains elevated, the article should become more cautious after refresh.
Margin Quality
Margin quality is the bridge between sales growth and earnings value. Net margin is 10.70% and price-to-sales is 3.24x, so this section reads profitability beside the sales multiple. A richer sales multiple is easier to defend when profitability is durable. If margins are already elevated, the valuation read should leave room for pressure even when the recent earnings record looks strong.
XYL net margin
Net margin shows whether the company has enough profitability quality to support its valuation.
Net margin (TTM): 10.70%. The bars below are annual fiscal years.
Net margin of 10.70% is a quality signal, not a valuation verdict by itself. It matters because a premium multiple is more defensible when margins are structurally strong and less defensible when margins are peaking.
Bull/Bear Valuation Case
The bull case is that revenue growth, EPS growth, and margin quality continue to support the current multiple. The bear case is that the P/E ratio and fair-value gap ask too much of the business if growth slows or margins normalize. Keeping both cases visible prevents the valuation note from becoming either a price chart recap or a model-output recap.
Bull and bear case
Valuation support
- Five-year revenue CAGR of 13.13% and five-year EPS CAGR of 22.76% support the business case.
- Net margin of 10.70% is the quality check behind the multiple.
Valuation pressure
- A P/E ratio of 30.15x can become demanding if EPS growth slows.
- The analyst-DCF (FMP) margin of safety at 22.75% should change the valuation read if it deteriorates after refresh.
What Could Change The View
The valuation read should change if the analyst-DCF (FMP) fair value moves, if the latest close moves materially toward or away from the analyst-DCF (FMP) reference of $149 (which would widen or close the margin of safety), or if revenue and EPS growth break from the stored trend. This note is re-checked after every daily market-data update; if its figures stop matching the company's reported data it is pulled rather than left to drift.
Final Read
The final read is that Xylem Inc. needs valuation support from more than one place: the market multiple, the analyst-DCF (FMP) reference, growth, and margin quality all have to keep pointing in the same direction. Every figure in this research note is checked against data we compute and store from the company's reported filings. It is general research context only, not personalized investment advice or a buy or sell call.
FAQ
Is XYL fairly valued?
Xylem Inc. trades at 30.15x trailing earnings with an analyst-DCF (FMP) margin of safety of 22.75%. The cleanest read comes from comparing that valuation to five-year revenue CAGR of 13.13% and five-year EPS CAGR of 22.76%.
What valuation metric matters most for XYL?
This article anchors on P/E, fair value, margin of safety, price-to-sales, earnings yield, revenue growth, and EPS growth. No single metric is treated as a recommendation.
How often should this XYL valuation view refresh?
We refresh this note after each daily market close, so the price, fair value, and every figure stay current. Numbers here are as of July 10, 2026.
What would change our mind
- A material move away from the analyst-DCF (FMP) reference of $149.
- A break in five-year EPS support, currently 22.76%.
- Margin quality drifting away from the latest net margin of 10.70%.
The bottom line
Xylem Inc. valuation research note from TGMCharts Research, grounded in precomputed fundamentals, chart exhibits, and a frozen claim ledger.
Read next: XYL fundamentalsContinue with Xylem Inc.'s full stock page.How we checked this researchShowHide
Data snapshot · By TGMCharts Research.
Every number in this note comes from data we compute and store ourselves from the company's reported figures, plus verbatim excerpts from its SEC filings. When a value isn't available we say so — we never fill gaps with estimates.
Latest filing excerpt
10-Q · filed 2026-04-28 · period 2026-03-31 · SEC EDGAR source
- “Earnings per share of $0.79, up 14.5% compared to prior year ($1.12, up 8.7% versus prior year, on an adjusted basis).”
- “Organic revenue decreased $9 million, or 0.4% for the three months ended March 31, 2026.”
- “Water Infrastructure Water Infrastructure revenue increased $22 million, or 3.8%, for the first quarter of 2026 as compared to the prior year.”
- “Applied Water Applied Water revenue increased $13 million, or 3.0% for the first quarter of 2026 as compared to the prior year.”
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Every number, checked
Every numeric or dated claim in this note was checked against our stored company data before publishing — each figure below links to the page it comes from.