TGM's two-stage DCF values Energy Recovery, Inc. (ERII) between $6.30 and $10.59 depending on assumptions, with a base case of $8.03. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth), fading to 2.5% long-run; the discount rate (8.6%) reflects its beta.
What would today's price require?
$7.06 is justified only if free cash flow grows about +3.1% a year (fading to 2.5% long-run) at a 8.6% required return — slower than the company has actually grown.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 3.6%/yr | 9.6% | $6.30 |
| Base case | 6.6%/yr | 8.6% | $8.03 |
| Optimistic | 9.6%/yr | 7.6% | $10.59 |
| Third-party model estimate (FMP) | independent reference · retrieved Oct 6, 2026 · assumptions not provided | $8.76 | |
The FMP figure is a third-party point estimate. Its cash-flow forecast, discount rate, terminal growth, and valuation date are not included in the stored response, so TGMCharts presents it only as a reference—not as an intrinsic-value conclusion or price target.
Current Price
$7.06
Market-Implied Growth
+3.1%/yr
vs +10.1% 5Y actual
Model Scenario Range
$6.30 – $10.59
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for ERII (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $18.3M · 0.05B shares · net cash $48.1M
Estimated Fair Value
$8.03
+13.7% vs $7.06
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 6.6%/yr FCF growth and 10-year horizon fixed. Green = above today's $7.06; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 6.6% | $9.75 | $10.56 | $11.57 | $12.86 | $14.56 |
| 7.6% | $8.27 | $8.81 | $9.45 | $10.23 | $11.20 |
| 8.6% | $7.21 | $7.59 | $8.03 | $8.55 | $9.17 |
| 9.6% | $6.41 | $6.69 | $7.01 | $7.37 | $7.80 |
| 10.6% | $5.79 | $6.00 | $6.24 | $6.51 | $6.81 |
