The end of the earnings season is always a good time to take a step back and see who shined (and who not so much). Let’s take a look at how water infrastructure stocks fared in Q3, starting with Tennant (NYSE: TNC).

Trends towards conservation and reducing groundwater depletion are putting water infrastructure and treatment products front and center. Companies that can innovate and create solutions–especially automated or connected solutions–to address these thematic trends will create incremental demand and speed up replacement cycles. On the other hand, water infrastructure and treatment companies are at the whim of economic cycles. Consumer spending and interest rates, for example, can greatly impact the industrial production that drives demand for these companies’ offerings.

The 5 water infrastructure stocks we track reported a very strong Q3. As a group, revenues beat analysts’ consensus estimates by 3.8%.

Amidst this news, share prices of the companies have had a rough stretch. On average, they are down 6% since the latest earnings results.

Weakest Q3: Tennant (NYSE: TNC)

As the world’s largest manufacturer of autonomous mobile robots, Tennant (NYSE: TNC) designs, manufactures, and sells cleaning products to various sectors.

Tennant reported revenues of $303.3 million, down 4% year on year. This print fell short of analysts’ expectations by 0.9%. Overall, it was a slower quarter for the company with a significant miss of analysts’ EPS and revenue estimates.

"We are pleased to report third quarter results that demonstrate the resilience of our business model even as we navigate an increasingly complex and uncertain market environment," said Dave Huml, Tennant President and Chief Executive Officer.

Tennant scored the highest full-year guidance raise but had the weakest performance against analyst estimates of the whole group. Still, the market seems discontent with the results. The stock is down 1.4% since reporting and currently trades at $77.59.

Read our full report on Tennant here, it’s free for active Edge members.

Best Q3: Watts Water Technologies (NYSE: WTS)

Founded in 1874, Watts Water (NYSE: WTS) specializes in manufacturing water products and systems for residential, commercial, and industrial applications globally.

Watts Water Technologies reported revenues of $611.7 million, up 12.5% year on year, outperforming analysts’ expectations by 6.2%. The business had a stunning quarter with an impressive beat of analysts’ organic revenue estimates and a solid beat of analysts’ EBITDA estimates.

Watts Water Technologies delivered the fastest revenue growth among its peers. Although it had a fine quarter compared its peers, the market seems unhappy with the results as the stock is down 1.4% since reporting. It currently trades at $278.21.

Is now the time to buy Watts Water Technologies? Access our full analysis of the earnings results here, it’s free for active Edge members.

Energy Recovery (NASDAQ: ERII)

Having saved far more than a trillion gallons of water, Energy Recovery (NASDAQ: ERII) provides energy recovery devices to the water treatment, oil and gas, and chemical processing sectors.

Energy Recovery reported revenues of $32 million, down 17.1% year on year, exceeding analysts’ expectations by 6.9%. It may have had the worst quarter among its peers, but its results were still good as it also locked in an impressive beat of analysts’ revenue estimates and a beat of analysts’ EPS estimates.

Energy Recovery delivered the biggest analyst estimates beat but had the slowest revenue growth in the group. As expected, the stock is down 17.1% since the results and currently trades at $14.30.

Read our full analysis of Energy Recovery’s results here.

Mueller Water Products (NYSE: MWA)

As one of the oldest companies in the water infrastructure industry, Mueller (NYSE: MWA) is a provider of water infrastructure products and flow control systems for various sectors.

Mueller Water Products reported revenues of $380.8 million, up 9.4% year on year. This number beat analysts’ expectations by 5.2%. It was a very strong quarter as it also recorded a solid beat of analysts’ organic revenue estimates and an impressive beat of analysts’ revenue estimates.

Mueller Water Products had the weakest full-year guidance update among its peers. The stock is down 3.1% since reporting and currently trades at $24.27.

Read our full, actionable report on Mueller Water Products here, it’s free for active Edge members.

Xylem (NYSE: XYL)

Formed through a spinoff, Xylem (NYSE: XYL) manufactures and services engineered products across a wide variety of applications primarily in the water sector.

Xylem reported revenues of $2.27 billion, up 7.8% year on year. This result surpassed analysts’ expectations by 1.9%. Overall, it was an exceptional quarter as it also logged an impressive beat of analysts’ EBITDA estimates and a solid beat of analysts’ adjusted operating income estimates.

The stock is down 5.8% since reporting and currently trades at $140.68.

Read our full, actionable report on Xylem here, it’s free for active Edge members.

Market Update

Thanks to the Fed’s rate hikes in 2022 and 2023, inflation has been on a steady path downward, easing back toward that 2% sweet spot. Fortunately (miraculously to some), all this tightening didn’t send the economy tumbling into a recession, so here we are, cautiously celebrating a soft landing. The cherry on top? Recent rate cuts (half a point in September 2024, a quarter in November) have propped up markets, especially after Trump’s November win lit a fire under major indices and sent them to all-time highs. However, there’s still plenty to ponder — tariffs, corporate tax cuts, and what 2025 might hold for the economy.

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