# Xylem (XYL.US)

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

Analysis as of: 2026-10-16T07:33:18.246Z. Financial observations: FY2009–FY2026.

Listing currency: USD. Reporting currency: USD.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: $103.37 per share; close as of 2026-10-15.

Estimated value: low $49.59 per share, central $55.78 per share, high $64.02 per share. Buy at or below the central value $55.78 per share. Valuation as of 2026-10-16T07:33:18.246Z; scenarios are not confidence intervals.

Expected annual return: 6.6% at the stated quote. About 6.6% 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

- 1 revenue decline in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 1

- Years with a net loss: 0

- Operating margin variation: 0.18×

Chart: Operating margin; fiscal year observations.

- FY2017: 0.12×

- FY2018: 0.13×

- FY2019: 0.09×

- FY2020: 0.08×

- FY2021: 0.11×

- FY2022: 0.11×

- FY2023: 0.09×

- FY2024: 0.12×

- FY2025: 0.14×

- LTM to Jun 2026: 0.14×

### moat: pass

- ROIC, median of available years: 26.4%

- ROIC, second-lowest year: 22.5%

- Typical minus recent gross margin: -0.2 pp

- Typical gross margin (annual median): 38.2%

- Recent gross margin (lower of latest and 3-year median): 38.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 3.8%

- ROIC including acquisitions, ten-year median: 9.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2017: 25.7%

- FY2018: 34.0%

- FY2019: 26.5%

- FY2020: 23.6%

- FY2021: 30.8%

- FY2022: 28.2%

- FY2023: 15.8%

- FY2024: 22.5%

- FY2025: 26.4%

- LTM to Jun 2026: 26.5%

### economics: pass

- Owner earnings / net income, 5-yr: 1.24×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: $4.7B

- Net income, five-year total: $3.8B

- Return on incremental invested capital: >100%

- Working capital / revenue, annual change: 0.1 pp

- Working capital / revenue, change between three-year averages: 0.2 pp

- Working capital / revenue, final three-year average: 19.7%

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

- FY2022: 1.08×

- FY2023: 1.27×

- FY2024: 1.27×

- FY2025: 1.25×

- LTM to Jun 2026: 1.22×

### management: fail

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

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 25.7% vs 22.5%

- Per-share earnings: 1.83 to 3.65 (three-year endpoint medians)

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 3.0%

- Ordinary dilution, 5-year annual growth: 6.1%

- Market cap gain: $24B

- Cumulative retained earnings: $2.7B

- Diluted shares, 10-year annual growth: 3.0%

- Diluted shares, 5-year annual growth: 6.1%

- $1 test, starting fiscal year: FY2016

- $1 test, ending fiscal year: FY2025

- Per-share value growth: 9.0%

- Per-share value change: $1.82

- Per-share value, starting three-year median: $1.83

- Per-share value, ending three-year median: $3.65

- Buybacks concentrated in cheaper years (correlation): -0.31

- Average buyback yield: 0.2%

- Buyback history: 10 years

- Debt-funded buybacks: No

- Acquisition spending: $3.1B

- Cumulative net income, 10 years: $5.0B

- ROIC, first three-year median: 25.7%

- ROIC, last three-year median: 22.5%

Chart: Earnings per share; fiscal year observations.

- FY2016: $1.44

- FY2017: $1.83

- FY2018: $3.03

- FY2019: $2.21

- FY2020: $1.40

- FY2021: $2.35

- FY2022: $1.96

- FY2023: $2.79

- FY2024: $3.65

- FY2025: $3.92

### accounting: pass

- restructuring or one-time charges in at least three of five years

- Sloan accruals: -1.6%

- Receivables to sales index (DSRI): 1.00×

- Restructuring years, last five: 5

- Stock compensation / operating cash flow: 4.3%

- Earnings backed by cash: Yes

- Operating cash / earnings: 1.30×

- Accounting red flags: 1

- Goodwill and intangibles / equity: 0.92×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -3.7%

- FY2017: -5.2%

- FY2018: -0.5%

- FY2019: -5.7%

- FY2020: -6.5%

- FY2021: -1.3%

- FY2022: -3.0%

- FY2023: -1.4%

- FY2024: -2.3%

- FY2025: -1.6%

## Holders

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

## Price story

Down 31% since Oct 2025 · "Xylem (XYL) Is Up 6.8% After Raising 2026 Profit Outlook Despite Lower Sales Guidance" (finance.yahoo.com, Jul 2026) · sales +1%

Story as of 2026-10-16T09:59:54.531Z; price observation 2026-10-15.

Price needs cash profits to grow 9.2% a year for ten years

- 2025-04-29: Xylem raises 2025 revenue forecast on strong water treatment equipment demand ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/xylem-raises-2025-revenue-forecast-124457446.html))

- 2025-05-13: XYL Q1 Earnings Call: Xylem Lifts Revenue Outlook Amid Tariff Pressures and Operational Restructuring ([finance.yahoo.com](https://finance.yahoo.com/news/xyl-q1-earnings-call-xylem-102302409.html))

- 2025-07-31: Xylem raises 2025 forecasts on strong demand for its water solutions ([ca.finance.yahoo.com](https://ca.finance.yahoo.com/news/xylem-raises-2025-forecasts-strong-121251646.html))

- 2025-10-29: XYL Q3 Deep Dive: Margin Expansion and Portfolio Streamlining Drive Outlook Upward ([finance.yahoo.com](https://finance.yahoo.com/news/xyl-q3-deep-dive-margin-053230351.html))

### Sales · FY2025–2026

sales +1%; source https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm; observed 2026-02-25.

- FY2017: $4.7B 

- FY2018: $5.2B 

- FY2019: $5.2B 

- FY2020: $4.9B 

- FY2021: $5.2B 

- FY2022: $5.5B 

- FY2023: $7.4B 

- FY2024: $8.6B 

- FY2025: $9.0B 

- FY2026: $9.1B 

### Gross margin · FY2026

gross margin 39.2%; source https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm; observed 2026-02-25.

- FY2017: 39.3% 

- FY2018: 38.9% 

- FY2019: 39.0% 

- FY2020: 37.5% 

- FY2021: 38.0% 

- FY2022: 37.7% 

- FY2023: 36.9% 

- FY2024: 37.5% 

- FY2025: 38.5% 

- FY2026: 39.2% 

## Owner memo

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

### How it makes money

Operates in specialty industrial machinery; annual sales are USD 9 billion.

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); FY2025: revenue 9035000000; grossProfit 3475000000; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); XYL.US: Xylem Inc., together with its subsidiaries, engages in the design, manufacture, and servicing of engineered products and solutions for utility, industrial, and residential and commercial building services settings worldwide. It operates through Water Infrastructure; Applied Water; Measurement and Control Solutions; and Water Solutions and Services segments. The company offers water, wastewater, and storm water pumps and controls and systems; filtration, disinfection, and biological treatment equipment under the Flygt, Ionpure, Leopold, Neptune Benson, Sanitare, Wallace & Tiernan, and Wedeco brands; and pumps, valves, heat exchangers, controls, and dispensing equipment used for water and focuses on the residential, commercial and industrial markets under the Rule, Bell & Gossett, Flojet, Goulds Water Technology, Jabsco, and Lowara brands. It also provides smart meters, network communication devices, data analytics, test instruments, controls, sensor devices, software and managed services, critical infrastructure services, cloud-based analytics, and remote monitoring and data management under the Ebro, Sensus, Sentec, Smith Blair, WTW, YSI, and Xylem Vue brands. In addition, the company offers preventative maintenance services, rapid response mobile services, digitally enabled/outsourced solutions, process and wastewater treatment systems, environmental remediation, odor and corrosion control, filtration, reverse osmosis, continuous deionization, and mobile dewatering equipment and rental services; and municipal services comprising odor and corrosion control services, as well as condition assessment and asset management, and pressure monitoring solutions under the Grindex, Mar Cor, and Godwin brands. Xylem Inc. was formerly known as ITT WCO, Inc. and changed its name to Xylem Inc. in July 2011. The company was incorporated in 2011 and is headquartered in Washington, District Of Columbia.

### Why customers stay

Margins ranged from 36.9% to 38.5% during 2023–25; it earns 26.4% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: grossProfit / revenue = 36.9%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: grossProfit / revenue = 37.5%.

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); FY2025: grossProfit / revenue = 38.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); 10-year return on capital observations [[2017,0.2570028189044366],[2018,0.34021831826709875],[2019,0.2645262346349303],[2020,0.23598896230475178],[2021,0.3082191780821918],[2022,0.2819330949948928],[2023,0.15830479417920862],[2024,0.22535083321162513],[2025,0.2636079657092968],[2026,0.26547808358655106]]; median 0.26406710017211354. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 38% gross margin through 2022 cost inflation.

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); Gross margin observations: [[2021,0.3801732435033686],[2022,0.37739949293734154],[2023,0.3689570885388376]]; range within 2 percentage points.

### Where the cash goes

Reinvests 13.6% of cash earnings; paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2016: growth capex 0; upkeep 124000000; cash acquisitions 1782000000; owner earnings 287000000. Growth capex plus acquisitions / owner earnings = 6.209059233449477.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2017: growth capex 0; upkeep 170000000; cash acquisitions 33000000; owner earnings 395000000. Growth capex plus acquisitions / owner earnings = 0.08354430379746836.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2018: growth capex 0; upkeep 237000000; cash acquisitions 433000000; owner earnings 573000000. Growth capex plus acquisitions / owner earnings = 0.7556719022687609.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2019: growth capex 0; upkeep 226000000; cash acquisitions 18000000; owner earnings 432000000. Growth capex plus acquisitions / owner earnings = 0.041666666666666664.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2020: growth capex 0; upkeep 183000000; cash acquisitions 0; owner earnings 322000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2021: growth capex 0; upkeep 208000000; cash acquisitions 0; owner earnings 464000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2022: growth capex 0; upkeep 208000000; cash acquisitions 0; owner earnings 383000000. Growth capex plus acquisitions / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2023: growth capex 0; upkeep 271000000; cash acquisitions 476000000; owner earnings 774000000. Growth capex plus acquisitions / owner earnings = 0.6149870801033591.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); FY2024: growth capex 0; upkeep 321000000; cash acquisitions 193000000; owner earnings 1131000000. Growth capex plus acquisitions / owner earnings = 0.17064544650751548.

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); FY2025: growth capex 0; upkeep 331000000; cash acquisitions 163000000; owner earnings 1201000000. Growth capex plus acquisitions / owner earnings = 0.1357202331390508.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Dividend observations: [[2016,112000000],[2017,130000000],[2018,152000000],[2019,174000000],[2020,188000000],[2021,203000000],[2022,217000000],[2023,299000000],[2024,350000000],[2025,391000000]]. Zero only counted when supported by a complete cash-flow statement.

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); FY2025: cash repurchases 15000000 USD.

### Are managers owners

Insiders own 0.3% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); XYL.US SharesStats.PercentInsiders = 0.335 percentage points; cache date 2026-10-16.

### What could break it

"Our business is subject to foreign currency exchange rate fluctuations." (SEC filing, Feb 2026)

- Source: https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm (filed 2026-02-25); Our business is subject to foreign currency exchange rate fluctuations.

### What the price says

The price assumes cash profits grow 9.2% yearly over ten years; actual growth was 9.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-02-25); Ten-year compound average after fade. Initial solved rate 0.11882010337786053. Price 103.37; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share 1.9588746375256552 → FY2025 4.922252186529177. Closing-price date 2026-10-15.

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

- 2016-10: $48.33 per share

- 2016-11: $51.58 per share

- 2016-12: $49.52 per share

- 2017-01: $49.31 per share

- 2017-02: $48.12 per share

- 2017-03: $50.22 per share

- 2017-04: $51.41 per share

- 2017-05: $52.14 per share

- 2017-06: $55.43 per share

- 2017-07: $56.73 per share

- 2017-08: $62.07 per share

- 2017-09: $62.63 per share

- 2017-10: $66.53 per share

- 2017-11: $69.34 per share

- 2017-12: $68.20 per share

- 2018-01: $72.26 per share

- 2018-02: $74.58 per share

- 2018-03: $76.92 per share

- 2018-04: $72.90 per share

- 2018-05: $70.40 per share

- 2018-06: $67.38 per share

- 2018-07: $76.56 per share

- 2018-08: $75.91 per share

- 2018-09: $79.87 per share

- 2018-10: $65.58 per share

- 2018-11: $72.98 per share

- 2018-12: $66.72 per share

- 2019-01: $71.26 per share

- 2019-02: $75.55 per share

- 2019-03: $79.04 per share

- 2019-04: $83.40 per share

- 2019-05: $74.22 per share

- 2019-06: $83.64 per share

- 2019-07: $80.29 per share

- 2019-08: $76.61 per share

- 2019-09: $79.62 per share

- 2019-10: $76.69 per share

- 2019-11: $77.51 per share

- 2019-12: $78.79 per share

- 2020-01: $81.66 per share

- 2020-02: $77.34 per share

- 2020-03: $65.13 per share

- 2020-04: $71.90 per share

- 2020-05: $66.34 per share

- 2020-06: $64.96 per share

- 2020-07: $72.98 per share

- 2020-08: $80.18 per share

- 2020-09: $84.12 per share

- 2020-10: $87.14 per share

- 2020-11: $95.97 per share

- 2020-12: $101.79 per share

- 2021-01: $96.59 per share

- 2021-02: $99.56 per share

- 2021-03: $105.18 per share

- 2021-04: $110.65 per share

- 2021-05: $118.12 per share

- 2021-06: $119.96 per share

- 2021-07: $125.85 per share

- 2021-08: $136.31 per share

- 2021-09: $123.68 per share

- 2021-10: $130.59 per share

- 2021-11: $121.11 per share

- 2021-12: $119.92 per share

- 2022-01: $105.02 per share

- 2022-02: $88.95 per share

- 2022-03: $85.26 per share

- 2022-04: $80.50 per share

- 2022-05: $84.25 per share

- 2022-06: $78.18 per share

- 2022-07: $92.03 per share

- 2022-08: $91.10 per share

- 2022-09: $87.36 per share

- 2022-10: $102.43 per share

- 2022-11: $112.35 per share

- 2022-12: $110.57 per share

- 2023-01: $104.01 per share

- 2023-02: $102.65 per share

- 2023-03: $104.70 per share

- 2023-04: $103.84 per share

- 2023-05: $100.20 per share

- 2023-06: $112.62 per share

- 2023-07: $112.75 per share

- 2023-08: $103.54 per share

- 2023-09: $91.03 per share

- 2023-10: $93.54 per share

- 2023-11: $105.13 per share

- 2023-12: $114.36 per share

- 2024-01: $112.44 per share

- 2024-02: $127.05 per share

- 2024-03: $129.24 per share

- 2024-04: $130.70 per share

- 2024-05: $141.02 per share

- 2024-06: $135.63 per share

- 2024-07: $133.50 per share

- 2024-08: $137.53 per share

- 2024-09: $135.03 per share

- 2024-10: $121.78 per share

- 2024-11: $126.75 per share

- 2024-12: $116.02 per share

- 2025-01: $124.04 per share

- 2025-02: $130.89 per share

- 2025-03: $119.46 per share

- 2025-04: $120.57 per share

- 2025-05: $126.04 per share

- 2025-06: $129.36 per share

- 2025-07: $144.62 per share

- 2025-08: $141.56 per share

- 2025-09: $147.50 per share

- 2025-10: $150.85 per share

- 2025-11: $140.67 per share

- 2025-12: $136.18 per share

- 2026-01: $137.87 per share

- 2026-02: $129.56 per share

- 2026-03: $119.50 per share

- 2026-04: $118.16 per share

- 2026-05: $109.54 per share

- 2026-06: $118.21 per share

- 2026-07: $116.97 per share

- 2026-08: $110.11 per share

- 2026-09: $101.27 per share

- 2026-10: $103.37 per share

## Annual estimated value (USD per share)

- FY2016: low $21.04 per share, central $23.76 per share, high $27.39 per share

- FY2017: low $25.64 per share, central $28.93 per share, high $33.31 per share

- FY2018: low $29.94 per share, central $33.93 per share, high $39.23 per share

- FY2019: low $31.51 per share, central $37.31 per share, high $42.90 per share

- FY2020: low $34.04 per share, central $37.38 per share, high $41.82 per share

- FY2021: low $33.11 per share, central $36.73 per share, high $41.55 per share

- FY2022: low $32.05 per share, central $35.84 per share, high $40.88 per share

- FY2023: low $37.78 per share, central $47.00 per share, high $54.24 per share

- FY2024: low $42.14 per share, central $52.64 per share, high $60.84 per share

- FY2025: low $47.86 per share, central $53.73 per share, high $61.54 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

Prior published observations retained from 2026-10-15T06:39:03.620Z where newer inputs omit a numeric field or fiscal period.

## Sources

[Original 10-K filing](https://www.sec.gov/Archives/edgar/data/1524472/000152447226000012/xyl-20251231.htm); period 2025-12-31, filed 2026-02-25.

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.