# Flowserve (FLS.US)

Canonical: https://gigainvestors.com/s/FLS

Analysis as of: 2026-10-16T07:28:34.321Z. Financial observations: FY1996–FY2025.

Listing currency: USD. Reporting currency: USD.

## Verdict

A wonderful business at too high a price

Quality tests for Buy: pass (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $70.77 per share; close as of 2026-10-15.

Estimated value: low $27.44 per share, central $30.53 per share, high $34.64 per share. Buy at or below the central value $30.53 per share. Valuation as of 2026-10-16T07:28:34.321Z; scenarios are not confidence intervals.

Expected annual return: 5.7% at the stated quote. About 5.7% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; US 10-year bond 5.1% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.23×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.11×

- FY2017: 0.07×

- FY2018: 0.08×

- FY2019: 0.11×

- FY2020: 0.10×

- FY2021: 0.08×

- FY2022: 0.05×

- FY2023: 0.09×

- FY2024: 0.11×

- FY2025: 0.13×

### moat: pass

- ROIC, median of available years: 19.1%

- ROIC, second-lowest year: 12.6%

- Typical minus recent gross margin: -0.5 pp

- Typical gross margin (annual median): 31.7%

- Recent gross margin (lower of latest and 3-year median): 32.2%

- Years with nonpositive capital: 0

- Capital spending / revenue: 1.7%

- ROIC including acquisitions, ten-year median: 6.8%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 17.1%

- FY2017: 12.6%

- FY2018: 16.8%

- FY2019: 22.5%

- FY2020: 18.5%

- FY2021: 19.6%

- FY2022: 11.5%

- FY2023: 23.0%

- FY2024: 23.2%

- FY2025: 24.0%

### economics: pass

- Owner earnings / net income, 5-yr: 1.09×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $1.2B

- Net income, five-year total: $1.1B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.0 pp

- Working capital / revenue, final three-year average: 34.2%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 1.36×

- FY2022: 1.08×

- FY2023: 1.09×

- FY2024: 1.02×

- FY2025: 1.07×

### management: pass

- Historical market-dollar context (not the management verdict): 2016 to 2025 (9 years)

- buybacks leaned toward cheaper years (informational)

- ROIC first 3 years vs last 3 years: 16.8% vs 23.2%

- Per-share earnings: 1.11 to 2.14 (three-year endpoint medians)

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: -0.2%

- Ordinary dilution, 5-year annual growth: -0.0%

- Market cap gain: $2.8B

- Cumulative retained earnings: $630M

- Diluted shares, 10-year annual growth: -0.2%

- Diluted shares, 5-year annual growth: -0.0%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 8.6%

- Per-share value change: $1.03

- Per-share value, starting three-year median: $1.11

- Per-share value, ending three-year median: $2.14

- Buybacks concentrated in cheaper years (correlation): 0.36

- Average buyback yield: 0.5%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $316M

- Cumulative net income, 10 years: $1.8B

- ROIC, first three-year median: 16.8%

- ROIC, last three-year median: 23.2%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.11

- FY2017: $0.02

- FY2018: $0.91

- FY2019: $1.93

- FY2020: $1.00

- FY2021: $0.96

- FY2022: $1.44

- FY2023: $1.42

- FY2024: $2.14

- FY2025: $2.64

### accounting: pass

- Sloan accruals: -2.8%

- Receivables to sales index (DSRI): 1.02×

- Restructuring years, last five: 0

- Stock compensation / operating cash flow: 7.6%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.46×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.73×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -2.0%

- FY2017: -6.3%

- FY2018: -1.5%

- FY2019: -1.4%

- FY2020: -3.4%

- FY2021: -2.6%

- FY2022: 4.8%

- FY2023: -2.7%

- FY2024: -2.6%

- FY2025: -2.8%

## Holders

- [Henry Ellenbogen](https://gigainvestors.com/DCP): tracked 13F investor; follow the investor page for holding quarter and amounts.

- [Matthew McLennan](https://gigainvestors.com/FE): tracked 13F investor; follow the investor page for holding quarter and amounts.

## Price story

Down 20% since Feb 2026 · "Why Flowserve (FLS) Is Up 9.4% After Beating Margin Targets And Buying Nuclear-Valve Assets" (finance.yahoo.com, Feb 2026) · sales +3.8%

Story as of 2026-10-16T09:58:46.151Z; price observation 2026-10-15.

Price needs cash profits to grow 12.8% a year for ten years

- 2025-06-05: Morning Movers: Chart Industries, Flowserve both rise following merger pact ([finance.yahoo.com](https://finance.yahoo.com/news/morning-movers-chart-industries-flowserve-130656695.html))

- 2025-10-29: Flowserve shares surge 33% on earnings beat; sheds asbestos liabilities ([seekingalpha.com](https://seekingalpha.com/news/4510517-flowserve-shares-surge-33-on-earnings-beat-sheds-asbestos-liabilities?utm_source=feed_news_all&utm_medium=referral&feed_item_type=news))

- 2026-02-08: Why Flowserve (FLS) Is Up 9.4% After Beating Margin Targets And Buying Nuclear-Valve Assets ([finance.yahoo.com](https://finance.yahoo.com/news/why-flowserve-fls-9-4-110504662.html))

- 2026-05-02: FLS Q1 Deep Dive: Revenue Falls Short Amid Middle East Disruption, Margins Hold Steady ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/fls-q1-deep-dive-revenue-072455069.html))

- 2026-07-30: Flowserve's Q2 Earnings Beat Estimates on Margin Expansion, Bookings Up Y/Y ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/flowserves-q2-earnings-beat-estimates-154500961.html))

- 2026-08-17: Flowserve Corporation (FLS) Trims Full-Year Growth Outlook as Organic Sales Decline ~1% ([finance.yahoo.com](https://finance.yahoo.com/markets/stocks/articles/flowserve-corporation-fls-trims-full-140829474.html))

### Sales · FY2024–2025

sales +3.8%; source https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm; observed 2026-02-17.

- FY2016: $4.0B 

- FY2017: $3.7B 

- FY2018: $3.8B 

- FY2019: $3.9B 

- FY2020: $3.7B 

- FY2021: $3.5B 

- FY2022: $3.6B 

- FY2023: $4.3B 

- FY2024: $4.6B 

- FY2025: $4.7B 

### Gross margin · FY2025

gross margin 34.6%; source https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm; observed 2026-02-17.

- FY2016: 32.5% 

- FY2017: 30.9% 

- FY2018: 32.3% 

- FY2019: 33.1% 

- FY2020: 31.2% 

- FY2021: 30.1% 

- FY2022: 27.5% 

- FY2023: 30.0% 

- FY2024: 32.2% 

- FY2025: 34.6% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 4.7 billion.

- Source: https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm (filed 2026-02-17); FY2025: revenue 4729260000; grossProfit 1636097000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FLS.US: Flowserve Corporation designs, manufactures, distributes, and services industrial flow management equipment in the United States, Canada, Mexico, Europe, the Middle East, Africa, and the Asia Pacific. The company operates in two segments, Flowserve Pumps Division (FPD) and Flow Control Division (FCD). It offers custom engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems, replacement parts, and related services; and manufactures gas-lubricated mechanical seals for gas pipelines and in the energy production and process markets. The company also provides equipment services, including installation, commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions. In addition, it offers engineered-to-order and configured-to-order isolation valves, control valves, valve automation products and related services and equipment; and actuators, positioners, and switches used to control, direct and manage the flow of liquids, gases and multi-phase fluids, and are a part of any flow control system. Further, the company provides equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. It sells its products under the Valtek, Argus, Worcester, Limitorque, and Durco brands. The company serves oil and gas, power generation, chemical, water management and general industries, including pharmaceuticals, mining, food and beverage, steel, and pulp and paper industries. It distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was founded in 1790 and is headquartered in Irving, Texas.

### Why customers stay

Margins ranged from 30% to 34.6% during 2023–25; it earns 19.1% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: grossProfit / revenue = 30%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: grossProfit / revenue = 32.2%.

- Source: https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm (filed 2026-02-17); FY2025: grossProfit / revenue = 34.6%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); 10-year return on capital observations [[2016,0.17107142282116924],[2017,0.12557186875817433],[2018,0.1680376582978452],[2019,0.22530520336956364],[2020,0.18538862810905207],[2021,0.19642746429875382],[2022,0.11489755856427514],[2023,0.2296000761674821],[2024,0.23193555209432215],[2025,0.2401160578253388]]; median 0.19090804620390295. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Where the cash goes

Paid dividends in 10 of 10 years; bought back USD 254.9 million of shares.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2016: growth capex 0; upkeep 89699000; owner earnings 172113000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2017: growth capex 0; upkeep 61602000; owner earnings 59504000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2018: growth capex 0; upkeep 83993000; owner earnings 148151000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2019: growth capex 0; upkeep 75716000; owner earnings 283856000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2020: growth capex 0; upkeep 57405000; owner earnings 173768000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2021: growth capex 0; upkeep 54936000; owner earnings 170835000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2022: growth capex 0; upkeep 76287000; owner earnings 203355000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2023: growth capex 0; upkeep 67359000; owner earnings 203131000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); FY2024: growth capex 0; upkeep 81019000; owner earnings 287338000. Growth capex / owner earnings = 0.

- Source: https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm (filed 2026-02-17); FY2025: growth capex 0; upkeep 70927000; owner earnings 370774000. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Dividend observations: [[2016,97746000],[2017,99233000],[2018,99416000],[2019,99557000],[2020,104159000],[2021,104604000],[2022,104549000],[2023,104955000],[2024,110440000],[2025,109639000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm (filed 2026-02-17); FY2025: cash repurchases 254860000 USD.

### Are managers owners

Insiders own 0.6% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); FLS.US SharesStats.PercentInsiders = 0.609 percentage points; cache date 2026-10-16.

### What could break it

Sanctions restrict its business in Russia.

- Source: https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm (filed 2026-02-17); e Merger Agreement and the transactions contemplated thereby. Pursuant to the Mutual Termination Agreement, Flowserve and Chart have also entered into a letter of intent between Chart and Flowserve to amend an existing supply agreement between them (or their affiliates) to extend the term and to expand the coverage thereof to include certain additional products of Flowserve during such term. We incurred $41.2 million in transaction costs related to the Chart Merger for the twelve-month period ended December 31, 2025, which are included within SG&A in our consolidated statement of income.

58

Russia and Ukraine Conflict — In response to the Russia-Ukraine conflict, several countries, including the United States, have imposed economic sanctions and export controls on certain industry sectors and parties in Russia. As a result of this conflict, including the aforementioned sanctions and overall instability in the region, in March 2022 we permanently ceased all Company operations in Russia.

In 2022, we recorded a $33.8 million pre-tax charge ($30.8 million after-tax) to reserve the asset positions of our Russian subsidiary (excluding cash) to (i) record contra-revenue for previously recognized revenue and estimated cancellation fees on open contracts that were previously accounted for under the percentage of completion ("POC") method and subsequently cancelled, (ii) establish a reserve for the estimated cost to exit the operations of our Russian subsidiary, (iii) record a reserve for our estimated financial exposure on contracts that have been or are anticipated to be canceled, and (iv) reserve our residual financial exposure due to increased Russia sanctions imposed during the latter part of 2022 and our decision to cancel backlog as a result of the additional sanctions. We reevaluated our financial exposure and made a $2 million adjustment during the period ended March 31, 2024 to reduce the existing reserves. We continue to monitor the situation involving Russia and Ukraine and its impact on the rest of our global business. This includes the macroeconomic impact, including with respect to any global supply chain issues and inflationary pressures. We made no further adjustments through December 31, 2025. To date, impacts have not been material to our business and we do not currently expect that any incremental impact in future quarters, including any financial impacts caused by our cancellation of customer contracts and ceasing of operations in Russia, will be material to the Company.

NAF AB Divestiture — Effective May 4, 2024, we divested NAF AB, a previously wholly owned subsidiary and control valves business within our Flow Control Division ("FCD") segment, including the NAF AB facility located in Linkoping, Sweden. The sale included cash paid to the buyer of $2.6 million and resulted in both a pre-tax and after-tax loss of $13.0 million record

### What the price says

The price assumes cash profits grow 12.8% yearly over ten years; actual growth was 5.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-17); Ten-year compound average after fade. Initial solved rate 0.17238904657359988. Price 70.77; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.591012697012951 → FY2025 2.8307896685728244. Closing-price date 2026-10-15.

## Monthly share-price history (USD per share)

- 2016-10: $42.35 per share

- 2016-11: $47.45 per share

- 2016-12: $48.05 per share

- 2017-01: $49.16 per share

- 2017-02: $46.45 per share

- 2017-03: $48.42 per share

- 2017-04: $50.87 per share

- 2017-05: $48.50 per share

- 2017-06: $46.43 per share

- 2017-07: $41.13 per share

- 2017-08: $39.28 per share

- 2017-09: $42.59 per share

- 2017-10: $44.07 per share

- 2017-11: $42.58 per share

- 2017-12: $42.13 per share

- 2018-01: $45.32 per share

- 2018-02: $42.35 per share

- 2018-03: $43.33 per share

- 2018-04: $44.41 per share

- 2018-05: $41.34 per share

- 2018-06: $40.40 per share

- 2018-07: $44.33 per share

- 2018-08: $52.12 per share

- 2018-09: $54.69 per share

- 2018-10: $45.90 per share

- 2018-11: $48.51 per share

- 2018-12: $38.02 per share

- 2019-01: $44.04 per share

- 2019-02: $44.41 per share

- 2019-03: $45.14 per share

- 2019-04: $49.03 per share

- 2019-05: $46.45 per share

- 2019-06: $52.69 per share

- 2019-07: $50.03 per share

- 2019-08: $42.68 per share

- 2019-09: $46.71 per share

- 2019-10: $48.84 per share

- 2019-11: $48.70 per share

- 2019-12: $49.77 per share

- 2020-01: $46.68 per share

- 2020-02: $40.19 per share

- 2020-03: $23.89 per share

- 2020-04: $28.17 per share

- 2020-05: $26.10 per share

- 2020-06: $28.52 per share

- 2020-07: $27.87 per share

- 2020-08: $29.68 per share

- 2020-09: $27.29 per share

- 2020-10: $29.12 per share

- 2020-11: $34.08 per share

- 2020-12: $36.85 per share

- 2021-01: $35.56 per share

- 2021-02: $37.00 per share

- 2021-03: $38.81 per share

- 2021-04: $39.64 per share

- 2021-05: $42.39 per share

- 2021-06: $40.32 per share

- 2021-07: $42.09 per share

- 2021-08: $38.87 per share

- 2021-09: $34.67 per share

- 2021-10: $33.62 per share

- 2021-11: $29.98 per share

- 2021-12: $30.60 per share

- 2022-01: $32.62 per share

- 2022-02: $30.37 per share

- 2022-03: $35.90 per share

- 2022-04: $32.71 per share

- 2022-05: $31.50 per share

- 2022-06: $28.63 per share

- 2022-07: $33.84 per share

- 2022-08: $30.47 per share

- 2022-09: $24.30 per share

- 2022-10: $28.68 per share

- 2022-11: $31.36 per share

- 2022-12: $30.68 per share

- 2023-01: $34.42 per share

- 2023-02: $34.69 per share

- 2023-03: $34.00 per share

- 2023-04: $33.39 per share

- 2023-05: $32.55 per share

- 2023-06: $37.15 per share

- 2023-07: $37.76 per share

- 2023-08: $39.57 per share

- 2023-09: $39.77 per share

- 2023-10: $36.72 per share

- 2023-11: $38.26 per share

- 2023-12: $41.22 per share

- 2024-01: $39.93 per share

- 2024-02: $42.32 per share

- 2024-03: $45.68 per share

- 2024-04: $47.16 per share

- 2024-05: $49.70 per share

- 2024-06: $48.10 per share

- 2024-07: $50.55 per share

- 2024-08: $49.88 per share

- 2024-09: $51.69 per share

- 2024-10: $52.64 per share

- 2024-11: $61.02 per share

- 2024-12: $57.52 per share

- 2025-01: $62.62 per share

- 2025-02: $55.04 per share

- 2025-03: $48.84 per share

- 2025-04: $45.23 per share

- 2025-05: $49.91 per share

- 2025-06: $52.35 per share

- 2025-07: $56.04 per share

- 2025-08: $53.66 per share

- 2025-09: $53.14 per share

- 2025-10: $68.25 per share

- 2025-11: $71.35 per share

- 2025-12: $69.38 per share

- 2026-01: $78.15 per share

- 2026-02: $88.52 per share

- 2026-03: $73.51 per share

- 2026-04: $73.64 per share

- 2026-05: $75.51 per share

- 2026-06: $74.16 per share

- 2026-07: $75.99 per share

- 2026-08: $79.09 per share

- 2026-09: $73.12 per share

- 2026-10: $70.77 per share

## Annual estimated value (USD per share)

- FY2016: low $34.98 per share, central $39.57 per share, high $45.67 per share

- FY2017: low $19.02 per share, central $20.98 per share, high $23.59 per share

- FY2018: low $17.90 per share, central $19.79 per share, high $22.32 per share

- FY2019: low $18.61 per share, central $20.56 per share, high $23.15 per share

- FY2020: low $21.20 per share, central $23.05 per share, high $25.51 per share

- FY2021: low $18.28 per share, central $20.18 per share, high $22.71 per share

- FY2022: low $17.28 per share, central $19.28 per share, high $21.95 per share

- FY2023: low $20.75 per share, central $23.13 per share, high $26.30 per share

- FY2024: low $22.57 per share, central $25.08 per share, high $28.41 per share

- FY2025: low $27.28 per share, central $30.34 per share, high $34.42 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/30625/000003062526000003/fls-20251231.htm); period 2025-12-31, filed 2026-02-17.

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.