XYL changes
Pick any two versions below to diff them.
- Price
- $104.05 → $95.11(−8.6%)
- Discount category
- Below intrinsic value → Well below intrinsic value
- Next earnings
- Oct 27, 2026 → Jan 27, 2027
- Next earnings is estimate
- No → Yes
- About
- Xylem makes pumps, treatment equipment, meters, sensors and software for water and wastewater, and it provides water services. It has four segments: Water Infrastructure, Applied Water, Measurement and Control Solutions, and Water Solutions and Services. added: From January 1, 2027, it will have three: Treatment and Services, Flow Solutions, and Measurement and Analytics. Its customers are utilities, industrial companies and commercial buildings. Revenue was $9 billion in 2025, and it has about 22,000 employees. Its headquarters are in Washington, D.C. Matthew Pine is CEO.
- Thesis
- The market prices Xylem for removed: slow revenue removed: growth. Revenue rose only 1% organically added: that does not grow. Organic revenue was flat in removed: Q2 added: Q3 2026, and Xylem removed: lowered its 2026 added: now expects flat organic revenue removed: growth added: for 2026, down from its earlier outlook removed: to about added: of 2% to 3% added: growth. It cut its 2026 adjusted EPS guidance to $5.40 to $5.45 from removed: 2% added: $5.55 to removed: 4%. added: $5.70. Xylem said that customers spend with more caution and that project timing moved revenue. Margins still rise: adjusted EBITDA margin was 23.9% in Q3 2026, and Xylem expects about 23.2% for 2026. The company is also changing its removed: portfolio: it sold its international metering business in May 2026, added: portfolio fast. It bought TriOS removed: in July 2026 and added: WaterFleet, agreed to buy removed: WaterFleet. added: the Cornell Pump and Roper Pump businesses for about $1.46 billion, and plans to sell Applied Water International and Specialty Flow Control. It bought back removed: $1.24 added: $1.58 billion of shares in the first removed: half added: nine months of 2026 and issued $2.5 billion of new notes in removed: May and September 2026. For the gap to close, three things must be true. Orders, which rose removed: 42% added: 10% organically in removed: Q2 added: Q3 2026, must turn into added: organic revenue growth in 2027. Adjusted EBITDA margin must removed: reach 23.1% to 23.5% in 2026 and keep rising. removed: Adjusted EPS must reach added: The pump purchase and the removed: raised 2026 guidance of $5.55 added: two sales must add to removed: $5.70. added: adjusted EPS. The removed: Q3 added: Q4 2026 report removed: on October 27, 2026 gives added: and the removed: first test. The 2027 removed: guidance added: guidance, expected in early removed: 2027 shows whether growth speeds up. added: 2027, give the next test. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is weak removed: demand from added: spending by utilities removed: or added: and industrial customers, which would keep removed: growth low. added: revenue flat.
- Risks
- Revenue removed: growth is slow: added: does not grow: organic removed: growth added: revenue was removed: 1% added: flat in removed: Q2 added: Q3 2026, and removed: the 2026 outlook is about 2% to 3%. added: Xylem expects flat organic revenue for 2026. Utility budgets and industrial spending can delay projects. Xylem bought back removed: $1.24 added: $1.58 billion of shares in the first removed: half added: nine months of 2026 and issued $2.5 billion of notes in 2026. added: It also agreed to pay about $1.46 billion for the Cornell Pump and Roper Pump businesses. More debt increases interest costs and reduces the room for added: more acquisitions. Tariffs, inflation and supply problems can increase costs. If price increases do not cover them, margins fall. Xylem changed its CFO in September removed: 2026 added: 2026, moves to three segments in January 2027 and removed: is buying added: plans to buy and removed: selling added: sell several businesses. Integration problems added: or low sale prices can reduce the expected benefits.
- Balance sheet
- Cash: removed: $1.3B added: $708M Debt: $2.9B Net debt: removed: $1.7B added: $2.2B Debt due within 12 months: removed: $531M added: $530M Xylem funds its business with senior removed: notes added: notes, commercial paper and a revolving credit facility. At removed: June added: September 30, 2026, total debt was removed: $2.93 added: $2.90 billion, including removed: $531 added: $530 million due within 12 months, and cash was removed: $1.28 billion. added: $708 million. Cash fell from $1.48 billion at December 31, 2025, because Xylem bought back $1.58 billion of shares in the first nine months of 2026 and paid for TriOS and WaterFleet. Debt rose from about $1.94 billion at December 31, 2025, after Xylem issued $1.0 billion of notes due 2033 and 2036 in May 2026. removed: In added: The 10-Q records the removed: first half of 2026, Xylem bought back $1.24 billion of shares. On September 29, 2026, it issued $1.5 billion removed: more of notes due 2029, 2032 and removed: 2037, added: 2037 in the fourth quarter of 2026, so they are not in the September 30 debt. Xylem will use part of these notes to pay about $1.46 billion for the Cornell Pump and removed: on added: Roper Pump businesses. No commercial paper was outstanding at September added: 30, 2026. On September 8, 2026, removed: it added: Xylem signed a new $1.5 billion five-year revolving credit facility. added: Its debt to EBITDA must stay at or below 4.0 times for four quarters after a large purchase. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: orders and margins. removed: Pending. added: Failed. Watch: Organic revenue growth in line with the 2% to 3% outlook, adjusted EPS guidance kept or raised and orders above revenue pass; a lower outlook or weak orders fail. removed: Feb added: Outcome: Orders rose 10% organically, but organic revenue was flat and Xylem cut its 2026 revenue outlook and adjusted EPS guidance. Q4 2026 (estimate): Cornell Pump and Roper Pump purchase closes. Pending. Watch: A close in Q4 2026 at about $1.46 billion passes; a delay past August 10, 2027 added: or an end of the deal fails. Jan 27, 2027 (estimate): added: Q4 2026 earnings and 2027 guidance. Pending. Watch: 2027 guidance for faster organic revenue growth than in 2026 and higher margins passes; flat growth guidance fails.
- Recent events
- added: Oct 27, 2026: Xylem reported Q3 2026 results. Orders rose 7% to $2.3 billion, or 10% organically. Revenue fell 3% to $2.2 billion and was flat organically. EPS rose 34% to $1.25, and adjusted EPS rose 5% to $1.44. Adjusted EBITDA margin rose 70 basis points to 23.9%. Xylem cut its 2026 revenue outlook to about $8.95 billion, flat organically, and its adjusted EPS guidance to $5.40 to $5.45 from $5.55 to $5.70. Oct 27, 2026: Xylem announced that it plans to sell its Applied Water International and Specialty Flow Control businesses. From January 1, 2027, it will have three segments instead of four. Hayati Yarkadas, the head of Water Infrastructure, stops being an executive officer on that date and leads the planned sales. Sep 29, 2026: Xylem completed the sale of $500 million of 5.250% senior notes due 2029, $500 million of 5.450% senior notes due 2032 and $500 million of 5.850% senior notes due 2037. Sep 8, 2026: Xylem entered into a new five-year senior unsecured revolving credit facility of up to $1.5 billion. added: Sep 2, 2026: Xylem completed the purchase of WaterFleet, a provider of mobile water and wastewater services, for $217 million. Aug 13, 2026: CFO William Grogan said he will resign on August 31, 2026. The board appointed Andrea van der Berg, Senior Vice President, Finance of the Water Infrastructure segment, as CFO from September 1, 2026. added: Aug 10, 2026: Xylem agreed to buy the Cornell Pump and Roper Pump businesses from Indicor for about $1.46 billion. It expects to close the deal in Q4 2026 after regulatory approvals. If the deal does not close by August 10, 2027, Xylem must redeem the $1.5 billion of notes that it sold in September 2026. Jul 28, 2026: Xylem reported Q2 2026 results. Orders rose 42% to $3.1 billion, and revenue rose 2% to $2.3 billion, or 1% organically. EPS was $1.11 and adjusted EPS was $1.46, up 16%. Adjusted EBITDA margin rose 150 basis points to 23.3%. Xylem raised its 2026 adjusted EPS guidance to $5.55 to $5.70 and lowered its revenue outlook to about $9.2 billion. Jul 24, 2026: Xylem agreed to buy WaterFleet, a provider of mobile water and wastewater services, for about $200 million. It expects to close the deal in 2026. Jul 1, 2026: Xylem bought TriOS Mess- und Datentechnik for about EUR 190 million ($216 million).