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Flowserve Corp (FLS)
NYSE:FLS
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Flowserve
(NYSE:FLS)68Neutral
Positive Factors
Bookings and Orders
Bookings remain strong, above $1B for 12th straight quarter.
Energy Transition
FLS is a major beneficiary of the global energy transition story and the need to invest materially in power capacity for broad electrification and datacenter trends.
Negative Factors
Earnings Performance
Fourth-quarter earnings per share was below expectations.
Flowserve (FLS) vs. S&P 500 (SPY)
Market Cap
$6.65B
Dividend Yield1.66%
Average Volume (3M)1.44M
Price to Earnings (P/E)23.6
Beta (1Y)1.15
Revenue Growth5.49%
EPS Growth51.02%
CountryUS
Employees16,000
SectorIndustrials
Sector Strength66
IndustryIndustrial Goods
Share Statistics
EPS (TTM)2.14
Shares Outstanding131,745,180
10 Day Avg. Volume1,663,656
30 Day Avg. Volume1,443,577
Financial Highlights & Ratios
PEG Ratio0.46
Price to Book (P/B)N/A
Price to Sales (P/S)1.46
Price to Cash Flow (P/CF)8.40
P/FCF Ratio7.80
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$72.67Price Target Upside42.94% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering9
Flowserve Business Overview & Revenue Model
Company DescriptionFlowserve Corporation (FLS) is a leading manufacturer and provider of industrial and environmental machinery, with a strong focus on pumps, valves, seals, automation, and services that are crucial for the movement, control, and protection of fluids in some of the world's most critical industries. The company serves a diverse range of sectors including oil and gas, chemical, power generation, and water management, offering tailored solutions that enhance operational efficiency and safety.
How the Company Makes MoneyFlowserve generates revenue primarily through the sale of its widely recognized brands of pumps, valves, seals, and associated services. The company's financial model relies on a combination of product sales, aftermarket services, and customer support. Significant revenue streams include the manufacture and sale of engineered and industrial products to end-users and distributors, as well as providing maintenance, repair, and engineering services. Flowserve's earnings are bolstered by long-term service agreements and a strong aftermarket business that supports a large installed base of equipment. Key partnerships with industry leaders and strategic acquisitions also play a vital role in expanding its market reach and enhancing its technological capabilities.
Flowserve Financial Statement Overview
Summary
Flowserve presents a robust financial position with steady revenue and profit growth, improved profitability margins, and strong cash flow generation. The balance sheet reflects a solid equity base with reduced leverage, enhancing financial stability. While liabilities have increased, the company's operational efficiency and cash management remain strong, positioning it well for future growth in the industrial goods sector.Income Statement
Flowserve has demonstrated strong revenue growth with a 5.48% increase from 2023 to 2024, and a substantial 19.51% increase from 2022 to 2023. Gross profit margins have been consistently healthy, maintaining around 31.5% in 2024. Net profit margins showed improvement, growing from 4.32% in 2023 to 6.20% in 2024, indicating enhanced profitability. The EBIT margin also improved significantly to 10.14% in 2024. However, the EBITDA margin in 2024 remains consistent with the EBIT margin, indicating stable operational efficiency. Overall, the income statement reflects solid profitability and growth trends.85
Very Positive
Balance Sheet
The company has maintained a moderate debt-to-equity ratio, improving from 0.73 in 2023 to 0.11 in 2024, reflecting reduced leverage. The ROE improved to 14.09% in 2024, signaling effective utilization of equity to generate profit. The equity ratio stands at 36.49% in 2024, indicating a stable financial structure. However, the total liabilities have increased over time, which should be monitored for potential risks.75
Positive
Cash Flow
Flowserve's free cash flow showed a robust growth of 33.19% from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio improved significantly, demonstrating effective cash management. The free cash flow to net income ratio increased to 1.22 in 2024, reflecting a healthy conversion of profits into cash. These metrics illustrate strong cash flow management and operational efficiency.80
Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 4.56B | 4.32B | 3.62B | 3.54B | 3.73B | Gross Profit |
| 1.43B | 1.30B | 994.29M | 1.05B | 1.12B | EBIT |
| 462.28M | 333.55M | 197.22M | 270.76M | 250.28M | EBITDA |
| 541.05M | 374.42M | 291.58M | 385.19M | 351.06M | Net Income Common Stockholders |
| 282.76M | 186.74M | 188.69M | 125.95M | 130.42M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 675.44M | 545.68M | 434.97M | 658.45M | 1.10B | Total Assets |
| 5.50B | 5.11B | 4.79B | 4.75B | 5.31B | Total Debt |
| 227.46M | 1.40B | 1.46B | 1.50B | 1.94B | Net Debt |
| -447.99M | 858.92M | 1.03B | 843.79M | 842.87M | Total Liabilities |
| 3.45B | 3.13B | 2.93B | 2.91B | 3.55B | Stockholders Equity |
| 2.01B | 1.94B | 1.82B | 1.80B | 1.73B |
| Cash Flow | Free Cash Flow | |||
| 344.29M | 258.41M | -116.30M | 195.18M | 253.13M | Operating Cash Flow |
| 425.31M | 325.77M | -40.01M | 250.12M | 310.54M | Investing Cash Flow |
| -387.21M | -68.58M | -6.09M | -59.48M | -41.70M | Financing Cash Flow |
| 117.50M | -153.01M | -150.01M | -599.71M | 147.59M |
Flowserve Technical Analysis
Negative
50.84
Price Trends
59.53
Negative
58.58
Negative
53.35
Negative
Market Momentum
-2.57
Positive
25.75
Positive
8.64
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLS, the sentiment is Negative. The current price of 50.84 is below the 20-day moving average (MA) of 58.31, below the 50-day MA of 59.53, and below the 200-day MA of 53.35, indicating a bearish trend. The MACD of -2.57 indicates Positive momentum. The RSI at 25.75 is Positive, neither overbought nor oversold. The STOCH value of 8.64 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLS.
Flowserve Risk Analysis
Flowserve disclosed 30 risk factors in its most recent earnings report. Flowserve reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Flowserve Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $10.93B | 21.32 | 18.76% | 0.95% | 10.59% | 27.04% | |
77 Outperform | $25.26B | 9.47 | 24.30% | 1.12% | -2.99% | 159.26% | |
74 Outperform | $64.30B | 27.12 | 9.66% | 1.85% | 10.29% | 22.72% | |
74 Outperform | $30.94B | 34.84 | 8.55% | 1.14% | 16.23% | 34.42% | |
68 Neutral | $6.65B | 23.58 | 14.34% | 1.66% | 5.49% | 51.02% | |
66 Neutral | $30.29B | 33.33 | 26.22% | 1.91% | -11.28% | -23.69% | |
62 Neutral | $8.11B | 13.34 | 1.17% | 3.02% | 4.16% | -15.14% |
* Industrials Sector Average
Performance Comparison
FLS
Flowserve
50.84
9.04
21.63%
DOV
Dover
189.73
20.64
12.21%
EMR
Emerson Electric Company
115.84
7.99
7.41%
ITT
ITT
139.01
12.90
10.23%
ROK
Rockwell Automation
273.66
-12.17
-4.26%
XYL
Xylem
129.67
4.72
3.78%
Flowserve Earnings Call Summary
Earnings Call Date: Feb 18, 2025 | % Change Since: -19.43% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call reflects a strong performance for Flowserve in 2024 with significant achievements in bookings, cash flow generation, and margin expansion. The company's strategic initiatives in diversification, decarbonization, and the aftermarket have shown robust growth. However, there were challenges such as currency headwinds, interest expenses, and ongoing softness in the European chemicals market. Overall, the positive aspects significantly outweigh the negatives.Highlights
Strong Bookings and Margin Expansion
Bookings for Q4 2024 were nearly $1.2 billion, with a book-to-bill ratio of 1.0 times. Adjusted gross margins expanded by 300 basis points to 32.8%, marking the eighth consecutive quarter of year-over-year margin expansion. The company also delivered an adjusted operating margin of 12.6%.
Significant Cash Flow Generation
Flowserve generated $197 million in operating cash flow for Q4 and $425 million for the full year, with a free cash flow conversion ratio of 99%, the highest in more than a decade.
Aftermarket and Nuclear Power Growth
Aftermarket bookings exceeded $600 million for the third consecutive quarter. Nuclear awards for the quarter totaled over $110 million, marking the second consecutive quarter of nuclear bookings greater than $100 million.
3D Strategy and Diversification Success
The company's 3D strategy drove a 36% growth in diversified and decarbonization bookings, with significant progress in nuclear and new energy markets.
Lowlights
Currency and Interest Expense Headwinds
Strengthening of the US dollar caused incremental currency translation headwinds, and higher interest expenses were related to the MoGas acquisition.
Sales Growth Impacted
Overall revenue growth was muted at 1% for Q4, impacted by the phasing of large projects and negative foreign currency translation.
Challenges in Chemicals Market
The chemical market in Europe remains soft, continuing a trend of softness for about a year and a half.
Company Guidance
In the Flowserve Fourth Quarter and Year End 2024 Earnings Conference Call, several key metrics were highlighted to showcase the company's strong performance and future guidance. Flowserve reported nearly $1.2 billion in bookings for the fourth quarter, with adjusted gross margins expanding by 300 basis points to 32.8%, marking the eighth consecutive quarter of year-over-year margin expansion. The company achieved an adjusted operating margin of 12.6% and maintained a book-to-bill ratio of 1.0 times, exiting the year with a near-record backlog of $2.8 billion. Operational cash flow was robust at $197 million for the quarter. For 2025, Flowserve anticipates organic sales growth of 3 to 5%, with additional contributions from the MoGas acquisition, which is expected to add approximately 300 basis points to sales growth. The company also expects adjusted earnings per share to range from $3.10 to $3.30, representing a 22% increase compared to the previous year. Additionally, Flowserve aims to improve its gross and operating margins through its ongoing operational and portfolio excellence programs, which include initiatives like the 80/20 complexity reduction strategy.Flowserve Corporate Events
Business Operations and StrategyFinancial Disclosures
Flowserve Reports Strong Q4 and Full-Year Results
Positive
Feb 18, 2025
Flowserve Corporation reported robust financial results for the fourth quarter and full year ending December 31, 2024, with key highlights including a 12.6% increase in bookings and a significant rise in operating income and cash flow. The company’s strategic initiatives, including the 3D strategy and Flowserve Business System, have driven sales and earnings growth, positioning Flowserve for continued momentum and long-term value creation for stakeholders in 2025.
Executive/Board Changes
Flowserve Updates Board Structure After Director Resignation
Neutral
Feb 11, 2025
On February 6, 2025, Flowserve Corporation’s Board of Directors accepted Carlyn R. Taylor’s resignation from her director position due to her new role as CEO of Sirva Worldwide, Inc. Her departure was amicable and not due to any disagreements with Flowserve. The company expressed appreciation for her contributions. The following day, on February 7, 2025, the Board amended the company’s Bylaws to reduce the number of directors from eleven to ten, reflecting this change in leadership structure.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.