Flowserve Corporation Common Stock (FLS)

FairStock Score: 45/100 — MIXED

Key Financials

Strengths

• Generates $384 million in annual free cash flow (3.6% yield on market cap)
• Solid return on equity of 17.2% above cost of capital
• Established organization with 16,000 employees providing operational scale

Concerns

• Trades significantly above Graham Number ($32) with negative 162% margin of safety—limited downside protection
• Currently unprofitable—sustained losses could lead to dilutive capital raises or balance sheet deterioration

AI Analysis

Flowserve Corporation Common Stock is a mid-cap industrials company valued at $10.7 billion. Revenue stands at $4.7 billion, though the company is currently unprofitable. From a quality standpoint, Flowserve shows healthy Altman Z-Score of 3.5 and adequate 17% ROE. On valuation, the stock is trading at a premium 31.0x earnings, with trades far above its Graham Number ($32) with no margin of safety. Growth dynamics show revenue growing at 3.5% and profit growth of -137.4%. The 1.1% dividend yield adds an income component for patient holders. Our composite FairStock Score of 45/100 reflects mixed fundamentals overall. Without profitability, this remains speculative—suitable only for those with high risk tolerance and a long time horizon.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $384 million in annual free cash flow (3.6% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 31x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Sluggish 4% growth in a large-cap company leaves the stock vulnerable to de-rating if the market rotates toward higher-growth opportunities.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer