Xylem Inc.
Xylem Inc. Fundamental Analysis
Xylem Inc. (XYL) shows moderate financial fundamentals with a PE ratio of 32.50, profit margin of 10.59%, and ROE of 8.59%. The company generates $9.0B in annual revenue with strong year-over-year growth of 16.27%.
Key Strengths
Areas of Concern
The stock receives a Fundamental Health Score of 64.8/100 based on profitability, valuation, growth, and balance sheet metrics. The C+ grade reflects average fundamentals, with notable risks in certain areas.
Fundamental Health Score
We analyze XYL's fundamental strength across five key dimensions:
Efficiency Score
WeakXYL struggles to generate sufficient returns from assets.
Valuation Score
WeakXYL trades at a premium to fair value.
Growth Score
ExcellentXYL delivers strong and consistent growth momentum.
Financial Health Score
ExcellentXYL maintains a strong and stable balance sheet.
Profitability Score
WeakXYL struggles to sustain strong margins.
Key Financial Metrics
Is XYL Expensive or Cheap?
P/E Ratio
XYL trades at 32.50 times earnings. This suggests a premium valuation.
PEG Ratio
When adjusting for growth, XYL's PEG of 42.25 indicates potential overvaluation.
Price to Book
The market values Xylem Inc. at 2.71 times its book value. This may indicate undervaluation.
EV/EBITDA
Enterprise value stands at 25.06 times EBITDA. This signals the market has high growth expectations.
How Well Does XYL Make Money?
Net Profit Margin
For every $100 in sales, Xylem Inc. keeps $10.59 as profit after all expenses.
Operating Margin
Core operations generate 13.54 in profit for every $100 in revenue, before interest and taxes.
ROE
Management delivers $8.59 in profit for every $100 of shareholder equity.
ROA
Xylem Inc. generates $5.43 in profit for every $100 in assets, demonstrating efficient asset deployment.
Following the Money - Real Cash Generation
Operating Cash Flow
Xylem Inc. produces operating cash flow of $1.24B, showing steady but balanced cash generation.
Free Cash Flow
Xylem Inc. generates strong free cash flow of $910.26M, providing ample flexibility for dividends, buybacks, or growth.
FCF Per Share
Each share generates $3.74 in free cash annually.
FCF Yield
XYL converts 2.93% of its market value into free cash.
Financial Ratios Analysis
Valuation Ratios
P/E Ratio
Price to earnings ratio
32.50
vs 25 benchmark
PEG Ratio
Price/earnings to growth ratio
42.25
vs 25 benchmark
P/B Ratio
Price to book value ratio
2.71
vs 25 benchmark
P/S Ratio
Price to sales ratio
3.44
vs 25 benchmark
Financial Health
Debt/Equity
Total debt to shareholders' equity
0.17
vs 25 benchmark
Current Ratio
Current assets to current liabilities
1.63
vs 25 benchmark
Efficiency Ratios
ROE
Return on equity percentage
0.09
vs 25 benchmark
ROA
Return on assets percentage
0.05
vs 25 benchmark
ROCE
Return on capital employed
0.08
vs 25 benchmark
How XYL Stacks Against Its Sector Peers
| Metric | XYL Value | Sector Average | Performance |
|---|---|---|---|
| P/E Ratio | 32.50 | 26.49 | Worse (Expensive) |
| ROE | 8.59% | 1307.00% | Weak |
| Net Margin | 10.59% | -5131.00% (disorted) | Strong |
| Debt/Equity | 0.17 | 0.81 | Strong (Low Leverage) |
| Current Ratio | 1.63 | 10.48 | Neutral |
| ROA | 5.43% | -1549793.00% (disorted) | Weak |
XYL outperforms its industry in 2 out of 6 key metrics, particularly excelling in Net Margin, but lagging in P/E Ratio.
Historical Growth Performance
5-Year Growth Trajectory
This section reviews Xylem Inc.'s 5-year compound annual growth rate (CAGR) and compares its performance against the typical investment style of its industry.
Revenue CAGR
21.02%
Industry Style: Cyclical, Value, Infrastructure
High GrowthEPS CAGR
64.66%
Industry Style: Cyclical, Value, Infrastructure
High GrowthFCF CAGR
11.68%
Industry Style: Cyclical, Value, Infrastructure
High Growth