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Mueller Water Products (MWA)
:MWA
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Mueller Water Products
(NYSE:MWA)
76Outperform
Positive Factors
Financial Performance
Shares have responded to three consecutive quarters of positive earnings surprises.
Growth Potential
Mueller is well positioned for organic growth in its end-markets, with share gains further levered by pending IIJA tailwinds and stimulus-backed project activity.
Operational Efficiency
Strong operating momentum is anticipated due to the company's execution and operating efficiency as it approaches the completion of a multi-year manufacturing transformation.
Negative Factors
Cash Flow
Cash conversion remains on the lighter side, with a high target for FY25 free cash flow.
Market Challenges
Krausz comps and backlog normalization are expected headwinds for 2025.
Market Valuation
Shares recently traded at their highest valuation in over 10 years, making further re-rating potential less compared to other water peers.
Mueller Water Products (MWA) vs. S&P 500 (SPY)
Market Cap
$4.14B
Dividend Yield1.01%
Average Volume (3M)3.23M
Price to Earnings (P/E)30.3
Beta (1Y)1.16
Revenue Growth11.94%
EPS Growth77.46%
CountryUS
Employees3,400
SectorIndustrials
Sector Strength64
IndustryIndustrial - Machinery
Share Statistics
EPS (TTM)0.87
Shares Outstanding156,599,550
10 Day Avg. Volume1,719,283
30 Day Avg. Volume3,230,433
Financial Highlights & Ratios
PEG Ratio0.39
Price to Book (P/B)N/A
Price to Sales (P/S)3.08
Price to Cash Flow (P/CF)19.40
P/FCF Ratio19.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$27.33Price Target Upside3.37% Upside
Rating ConsensusHold
Number of Analyst Covering6
Mueller Water Products Business Overview & Revenue Model
Company DescriptionMueller Water Products Inc. manufactures and markets products and services used in the transmission, distribution, and measurement of water in North America and internationally. Its products and services are used by municipalities, and the residential and non-residential construction industries. It operates through two segments, Infrastructure and Technologies. The company's Infrastructure segment manufactures and sells valves for water and gas systems, including iron gate, butterfly, tapping, check, knife, plug, automatic control, and ball valves; and dry-barrel and wet-barrel fire hydrants and service brass products, as well as a line of pipe repair products, such as clamps and couplings used to repair leaks. This segment offers its products under Canada Valve, Centurion, Ez-Max, Hydro Gate, Hydro-Guard, HYMAX, HYMAX VERSA, Jones, Krausz, Milliken, Mueller, Pratt, Pratt Industrial, Repamax, Repaflex, and Singer brands. Its Technologies segment offers residential and commercial water metering, water leak detection and pipe condition assessment products, systems, and services. It offers products under Echologics, Echoshore, ePulse, Hersey, LeakFinderRT, LeakFinderST, LeakListener, LeakTuner, Mi.Echo, Mi.Data, Mi.Hydrant, Mi.Net, Mueller Systems, and Sentryx brands. The company was founded in 1857 and is headquartered in Atlanta, Georgia.
How the Company Makes MoneyMueller Water Products generates revenue primarily through the sale of its water infrastructure and technology products. The company's key revenue streams include the manufacturing and distribution of valves, hydrants, and metering systems. These products are essential components for water systems, serving municipal and utility customers. Additionally, Mueller Water Products benefits from long-term service contracts and maintenance agreements, which provide recurring revenue. Strategic partnerships with water utilities and municipalities, along with a focus on innovation and efficiency improvements, further contribute to the company's earnings.
Mueller Water Products Financial Statement Overview
Summary
Mueller Water Products maintains robust financial performance with solid profitability and consistent revenue growth. A strong balance sheet and effective cash flow management underpin its operational efficiency, despite some cash flow volatility.Income Statement
Mueller Water Products shows a strong financial performance in the TTM (Trailing-Twelve-Months) with a Gross Profit Margin of 34.90% and a Net Profit Margin of 10.05%. Revenue growth is consistent at 6.93% from the previous year, indicating a positive trajectory. The EBIT Margin of 15.59% and EBITDA Margin of 19.23% highlight robust operational efficiency. These metrics suggest solid profitability and growth trends.85
Very Positive
Balance Sheet
The company exhibits a stable financial position with a Debt-to-Equity Ratio of 0.54, indicating manageable leverage. The Return on Equity stands at 16.42%, reflecting good profitability for shareholders. The Equity Ratio of 51.53% suggests a balanced capital structure with over half of the company's assets financed by equity. Overall, the balance sheet is strong but could face risks if leverage increases.78
Positive
Cash Flow
Mueller Water Products has demonstrated a healthy Free Cash Flow Growth Rate of -10.92%, indicating some volatility but still maintaining positive free cash flow. The Operating Cash Flow to Net Income Ratio of 1.64 and Free Cash Flow to Net Income Ratio of 1.25 show strong cash generation relative to earnings, supporting sustainability in operations and future investments.80
Positive
| Breakdown | |||||
| TTM | Sep 2024 | Sep 2023 | Sep 2022 | Sep 2021 | Sep 2020 |
|---|---|---|---|---|---|
| Income Statement | Total Revenue | ||||
| 1.36B | 1.31B | 1.28B | 1.25B | 1.11B | 964.10M | Gross Profit |
| 475.70M | 459.00M | 379.50M | 364.30M | 358.50M | 328.20M | EBIT |
| 212.40M | 181.70M | 127.40M | 111.60M | 131.70M | 116.80M | EBITDA |
| 276.30M | 181.70M | 196.40M | 190.00M | 178.30M | 178.50M | Net Income Common Stockholders |
| 136.90M | 115.90M | 85.50M | 76.60M | 70.40M | 72.00M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | ||||
| 104.60M | 309.90M | 160.30M | 146.50M | 227.50M | 208.90M | Total Assets |
| 1.62B | 1.64B | 1.50B | 1.50B | 1.52B | 1.40B | Total Debt |
| 694.90M | 477.50M | 472.10M | 446.90M | 446.90M | 447.60M | Net Debt |
| 590.30M | 167.60M | 311.80M | 300.40M | 219.40M | 238.70M | Total Liabilities |
| 1.21B | 825.80M | 793.50M | 828.80M | 823.10M | 754.30M | Stockholders Equity |
| 408.20M | 810.10M | 711.50M | 669.30M | 694.90M | 640.70M |
| Cash Flow | Free Cash Flow | ||||
| 170.50M | 191.40M | 61.40M | -2.40M | 94.00M | 72.60M | Operating Cash Flow |
| 224.10M | 238.80M | 109.00M | 52.30M | 156.70M | 140.30M | Investing Cash Flow |
| -53.50M | -47.20M | -42.10M | -54.90M | -81.70M | -67.50M | Financing Cash Flow |
| -46.90M | -46.00M | -48.80M | -72.00M | -58.80M | -41.40M |
Mueller Water Products Technical Analysis
Positive
26.44
Price Trends
25.75
Positive
24.75
Positive
23.05
Positive
Market Momentum
-0.08
Negative
57.82
Neutral
88.63
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For MWA, the sentiment is Positive. The current price of 26.44 is above the 20-day moving average (MA) of 24.85, above the 50-day MA of 25.75, and above the 200-day MA of 23.05, indicating a bullish trend. The MACD of -0.08 indicates Negative momentum. The RSI at 57.82 is Neutral, neither overbought nor oversold. The STOCH value of 88.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for MWA.
Mueller Water Products Risk Analysis
Mueller Water Products disclosed 42 risk factors in its most recent earnings report. Mueller Water Products reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Mueller Water Products Peers Comparison
Overall Rating
UnderperformOutperform
Sector (63)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $6.99B | 24.10 | 18.08% | 0.84% | 9.53% | 10.98% | |
76 Outperform | $4.14B | 30.31 | 17.49% | 1.01% | 11.94% | 77.46% | |
75 Outperform | $842.93M | 18.64 | 9.75% | ― | 0.48% | -5.52% | |
71 Outperform | $3.72B | 33.30 | 13.77% | 0.42% | 9.99% | -4.18% | |
70 Neutral | $5.87B | 20.89 | 14.34% | 1.98% | 5.49% | 51.02% | |
63 Neutral | $4.09B | 23.13 | 14.53% | 1.15% | -2.12% | -6.07% | |
63 Neutral | $4.26B | 11.28 | 5.43% | 215.24% | 4.12% | -8.73% |
* Industrials Sector Average
Performance Comparison
MWA
Mueller Water Products
26.44
10.65
67.45%
FLS
Flowserve
44.82
-1.19
-2.59%
FELE
Franklin Electric Co
89.17
-12.59
-12.37%
KAI
Kadant
311.14
29.94
10.65%
THR
Thermon Group Holdings
26.19
-5.64
-17.72%
WTS
Watts Water Technologies
206.84
7.03
3.52%
Mueller Water Products Earnings Call Summary
Earnings Call Date: Feb 4, 2025 | % Change Since: 14.86% | Next Earnings Date: May 5, 2025
Earnings Call Sentiment Positive
The earnings call presented a positive outlook for Mueller Water Products, highlighting record first quarter results, increased sales and margins, and successful operational transitions. However, headwinds from international conflicts and potential tariff impacts were noted, along with decreased free cash flow.Highlights
Record First Quarter Results
Mueller Water Products achieved record first quarter results for adjusted EBITDA and adjusted net income per diluted share. Adjusted net income per diluted share was $0.25, an increase of 92% compared to the prior year.
Strong Net Sales Growth
Net sales increased 18.7% to $304.3 million compared with the prior year, driven by higher volumes and pricing across most product lines.
Improved Gross and Adjusted EBITDA Margins
The company achieved a 340 basis points year-over-year improvement in adjusted EBITDA margin and a 120 basis point improvement in gross margin, excluding write-downs.
Successful Operational Transition
The company ceased operations at its legacy brass foundry, transitioning production to a state-of-the-art foundry, expected to generate an 80 to 100 basis point annualized improvement in gross margin starting in the second half of 2025.
Increased 2025 Guidance
Mueller Water Products raised its guidance for 2025 net sales and adjusted EBITDA, reflecting strong first quarter performance and benefits from recent price actions.
Lowlights
Headwinds from Kraus Repair Products
Continued headwinds for Kraus repair products were noted, attributed to the Israel Hamas war, leading to margin headwinds throughout the year as backlog is reduced.
Potential Impact of New Tariffs
The company acknowledged potential cost increases or impacts associated with the recently announced tariffs, though these were not included in the updated guidance.
Decreased Free Cash Flow
Free cash flow for the first quarter decreased by $20 million to $42.2 million compared with the prior year, due to a decrease in net cash provided by operating activities and higher capital expenditures.
Company Guidance
In the recent conference call, Mueller Water Products, Inc. provided robust guidance for fiscal year 2025, highlighting several key metrics. The company reported a record first quarter performance with net sales growth of 18.7%, reaching $304.3 million. Adjusted EBITDA for the quarter increased by 41.7% to $63.5 million, achieving a margin of 20.9%, which was 340 basis points higher than the previous year. The company also reported a 92% increase in adjusted net income per diluted share, reaching $0.25. Free cash flow for the quarter was $42 million, after capital expenditures of $12 million. The improved guidance for net sales now ranges between $1.37 billion and $1.39 billion, marking a 4.2% to 5.7% increase year-over-year, while adjusted EBITDA is projected to be between $310 million and $315 million, reflecting 8.9% to 10% growth. The guidance anticipates a 200 basis point improvement in gross margin, driven by operational efficiencies and strategic initiatives, such as the closure of their legacy brass foundry. The call also addressed potential headwinds, including newly announced tariffs, but the company believes these can be managed through pricing strategies and increased efficiencies.Mueller Water Products Corporate Events
Business Operations and StrategyFinancial Disclosures
Mueller Water Products Highlights Strategic Priorities in Update
Positive
Feb 26, 2025
Mueller Water Products released an updated investor presentation highlighting their financial performance and strategic priorities. The presentation, accessible online, emphasizes the company’s focus on operational excellence, customer experience, and product innovation to drive growth and improve margins. Key financial metrics include $1,363 million in net sales and $303.4 million in adjusted EBITDA for the last twelve months ending Q1 FY25. The company also reported significant ESG achievements, including a reduction in emissions intensity and increased use of recycled materials.
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.