Why Energy Recovery (ERII) Stock Is Trading Lower Today

What Happened?

Shares of energy recovery device manufacturer Energy Recovery (NASDAQ:ERII) fell 35% in the morning session after the company reported disappointing fourth-quarter 2025 financial results that fell short of Wall Street's expectations. 

The energy recovery device manufacturer posted revenue of $66.87 million, which was flat year on year and missed analysts' forecasts of $82.59 million. The company's profitability also came under pressure, with adjusted earnings per share of $0.53 coming in 20.9% below the consensus estimate of $0.67. Furthermore, adjusted EBITDA was 15.6% below expectations. Overall, the significant misses on key financial metrics signaled a weaker-than-expected quarter, leading to a sharp sell-off in the stock.

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What Is The Market Telling Us

Energy Recovery’s shares are somewhat volatile and have had 10 moves greater than 5% over the last year. But moves this big are rare even for Energy Recovery and indicate this news significantly impacted the market’s perception of the business.

The previous big move we wrote about was 20 days ago when the stock gained 2.7% on the news that the broader market rebounded from a tech-driven sell-off, with investors taking the opportunity to buy stocks at lower prices. 

This rally was fueled by a recovery in technology stocks and a significant bounce in Bitcoin, which stabilized after losing over half its value from its October peak. Investor sentiment was also lifted by a surprising improvement in U.S. consumer sentiment and the realization that massive AI-related capital expenditure, such as Amazon's planned $200 billion, directly benefits chipmakers like Nvidia and Broadcom. These "pick-and-shovel" winners jumped as much as 7%, helping the S&P 500 edge back into positive territory for 2026. The highlight of the day was the Dow Jones Industrial Average, which surged and crossed the historic 50,000 threshold for the first time.

Energy Recovery is down 23.5% since the beginning of the year, and at $10.50 per share, it is trading 42% below its 52-week high of $18.11 from October 2025. Investors who bought $1,000 worth of Energy Recovery’s shares 5 years ago would now be looking at an investment worth $596.31.

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