MILWAUKEE—Timothy J. Jahnke, a director at Zurn Elkay Water Solutions Corp (NYSE:ZWS), recently sold 20,000 shares of the company's common stock. The transaction, which took place on October 16, was executed under a Rule 10b5-1 trading plan. The shares were sold at a weighted average price of $37.59 per share, amounting to a total value of approximately $751,800.
Following this transaction, Jahnke holds 345,017 shares directly. Additionally, he has an indirect ownership of 200,000 shares through an irrevocable trust. The sale was conducted in multiple trades, with prices ranging from $37.50 to $37.85. This activity was disclosed in a filing with the Securities and Exchange Commission on October 17.
In other recent news, Zurn Water Solutions has been making notable strides in its financial performance. The company's second-quarter reports reveal a 20% increase in adjusted EBITDA, significant margin expansion, and a core growth marked at 3%. Additionally, Zurn Elkay generated $80 million in free cash flow and repurchased nearly two million shares, leading to an EBITDA increase of $35 million for the first half of the year. The company also exceeded $250 million in free cash flow for the full year.
In light of these developments, Baird has revised its outlook on Zurn Water Solutions, raising the price target from $36 to $37 while maintaining a Neutral rating. The firm attributes this adjustment to Zurn Water's recent performance, which aligns with its preliminary announcement, showing a slight increase in sales and margins. Furthermore, Baird notes that the company's management has upgraded its 2024 guidance based on better-than-expected margin results.
These are the recent developments for Zurn Water Solutions, which is also expecting to see more flexibility within the company due to a recent change in leadership. The firm's strong balance sheet positions it well for strategic capital deployment, and it has shown commendable internal execution amidst a varied market environment. This has contributed to the gradual increase in estimates, driven by the company's margin execution.
InvestingPro Insights
The recent insider sale by Timothy J. Jahnke comes at a time when Zurn Elkay Water Solutions Corp (NYSE:ZWS) is experiencing notable market performance. According to InvestingPro data, the company's stock is trading near its 52-week high, with a strong return of 18.84% over the last three months and an impressive 39.29% over the past year.
Despite the insider sale, several InvestingPro Tips suggest a positive outlook for ZWS. The company is expected to see net income growth this year, and it's trading at a low P/E ratio relative to its near-term earnings growth potential. This is reflected in the PEG ratio of 0.31 for the last twelve months as of Q2 2024, indicating that the stock may be undervalued relative to its growth prospects.
Financially, ZWS appears to be on solid footing. The company operates with a moderate level of debt, and its liquid assets exceed short-term obligations. This financial stability is complemented by a profitable performance over the last twelve months, with a gross profit margin of 44.27% and an operating income margin of 15.53%.
For investors seeking more comprehensive analysis, InvestingPro offers 12 additional tips for ZWS, providing a deeper understanding of the company's financial health and market position.
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