Xylem Inc. (XYL)

FairStock Score: 51/100 — MIXED

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

I approach Xylem as a water infrastructure asset: it designs, makes, and services pumps, treatment, and measurement equipment for utilities, industry, and buildings. That is a necessary, replacement-driven business, which can create a modest moat through installed base and service relationships. The filed numbers show FY2025 revenue of $9.0B, net income of $957.0M, and diluted EPS of $3.92. In fiscal Q2 2026, the quarter ended 2026-06-30, revenue was $2.3B, net income $263.0M, and diluted EPS $1.11, up from net income of $226.0M and EPS of $0.93 in fiscal Q2 2025. That profit growth is encouraging. The balance sheet is conservative, with debt-to-equity of 0.29, and FairStock’s Piotroski F-Score is 8/9. Free cash flow is $960.0M, a 4.0% FCF yield. But quality has limits: FairStock calculates ROE of 9.18% and ROCE of 5.11%, and revenue growth is only 1.52%. At the close on 2026-10-13, the price was $102.54, giving a P/E of 24.47, P/B of 2.18, PEG of 1.49, and EV/EBITDA of 13.82. The Graham Number is $64.87, so the margin of safety is -58.07%. Xylem is a FAST GROWER by FairStock’s rule—profit 30.4% a year over five years, revenue 14.1%—but the current price already reflects much of that. I see a durable but not fortress-like business, fairly to fully valued, with modest current growth and returns.

In plain English: Xylem makes and services pumps, treatment equipment, and measurement systems used to move and clean water for utilities, industry, and buildings. The business is profitable and carries little debt, but sales are growing slowly and the profits earned on the money invested in it are only moderate. At the 2026-10-13 close of $102.54, the shares look full or expensive compared with the company's recent profits and accounting value.

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Data as of 2026-10-13 close · note generated 2026-10-15 · model deepseek-flash

Sources (SEC EDGAR): fiscal Q2 2026 10-Q (period ended 2026-06-30) · fiscal Q1 2026 10-Q (period ended 2026-03-31) · fiscal Q3 2025 10-Q (period ended 2025-09-30) · fiscal Q2 2025 10-Q (period ended 2025-06-30) · FY2025 10-K (period ended 2025-12-31) · FY2024 10-K (period ended 2024-12-31) · FY2023 10-K (period ended 2023-12-31)

Fundamentals from company filings and market-data providers; prices are end-of-day, not real-time. AI-generated analysis is general and educational — not personal investment advice. Scoring methodology · Score test · Disclaimer