- Price
- $104.05
- Fair value
- $129.00
- Discount
- 19.3%
- Uncertainty
- Medium
- LSEG rating
- 2.00
- Moat
- Narrow
- Next earnings
- 2026-10-27
- Next earnings is estimate
- No
- Company name
- Xylem
- Sector
- Water technology
- About
- Xylem makes pumps, treatment equipment, meters, sensors and software for water and wastewater, and it provides water services. It has four segments: Water Infrastructure, Applied Water, Measurement and Control Solutions, and Water Solutions and Services. Its customers are utilities, industrial companies and commercial buildings. Revenue was $9 billion in 2025, and it has about 22,000 employees. Its headquarters are in Washington, D.C. Matthew Pine is CEO.
- Thesis
- The market prices Xylem for slow revenue growth. Revenue rose only 1% organically in Q2 2026, and Xylem lowered its 2026 organic revenue growth outlook to about 2% to 3% from 2% to 4%. The company is also changing its portfolio: it sold its international metering business in May 2026, bought TriOS in July 2026 and agreed to buy WaterFleet. It bought back $1.24 billion of shares in the first half of 2026 and issued $2.5 billion of new notes in May and September 2026. For the gap to close, three things must be true. Orders, which rose 42% in Q2 2026, must turn into revenue growth in 2027. Adjusted EBITDA margin must reach 23.1% to 23.5% in 2026 and keep rising. Adjusted EPS must reach the raised 2026 guidance of $5.55 to $5.70. The Q3 2026 report on October 27, 2026 gives the first test. The 2027 guidance in early 2027 shows whether growth speeds up. If these checks pass, the gap can close over the next four to six quarters. The main reason it may not close is weak demand from utilities or industrial customers, which would keep growth low.
- Risks
- Revenue growth is slow: organic growth was 1% in Q2 2026, and the 2026 outlook is about 2% to 3%. Utility budgets and industrial spending can delay projects.
Xylem bought back $1.24 billion of shares in the first half of 2026 and issued $2.5 billion of notes in 2026. More debt increases interest costs and reduces the room for acquisitions.
Tariffs, inflation and supply problems can increase costs. If price increases do not cover them, margins fall.
Xylem changed its CFO in September 2026 and is buying and selling businesses. Integration problems can reduce the expected benefits.
- Balance sheet
- Cash: $1.3B
Debt: $2.9B
Net debt: $1.7B
Debt due within 12 months: $531M
Xylem funds its business with senior notes and a revolving credit facility. At June 30, 2026, total debt was $2.93 billion, including $531 million due within 12 months, and cash was $1.28 billion. Debt rose from about $1.94 billion at December 31, 2025, after Xylem issued $1.0 billion of notes due 2033 and 2036 in May 2026. In the first half of 2026, Xylem bought back $1.24 billion of shares. On September 29, 2026, it issued $1.5 billion more of notes due 2029, 2032 and 2037, and on September 8, 2026, it signed a new $1.5 billion five-year revolving credit facility.
As of 2026-06-30.
- Checkpoints
- Oct 27, 2026: Q3 2026 earnings: orders and margins. Pending. Watch: Organic revenue growth in line with the 2% to 3% outlook, adjusted EPS guidance kept or raised and orders above revenue pass; a lower outlook or weak orders fail.
Feb 2027 (estimate): 2027 guidance. Pending. Watch: 2027 guidance for faster organic revenue growth than in 2026 and higher margins passes; flat growth guidance fails.
- Recent events
- 2026-09-29: Xylem completed the sale of $500 million of 5.250% senior notes due 2029, $500 million of 5.450% senior notes due 2032 and $500 million of 5.850% senior notes due 2037.
2026-09-08: Xylem entered into a new five-year senior unsecured revolving credit facility of up to $1.5 billion.
2026-08-13: CFO William Grogan said he will resign on August 31, 2026. The board appointed Andrea van der Berg, Senior Vice President, Finance of the Water Infrastructure segment, as CFO from September 1, 2026.
2026-07-28: Xylem reported Q2 2026 results. Orders rose 42% to $3.1 billion, and revenue rose 2% to $2.3 billion, or 1% organically. EPS was $1.11 and adjusted EPS was $1.46, up 16%. Adjusted EBITDA margin rose 150 basis points to 23.3%. Xylem raised its 2026 adjusted EPS guidance to $5.55 to $5.70 and lowered its revenue outlook to about $9.2 billion.
2026-07-24: Xylem agreed to buy WaterFleet, a provider of mobile water and wastewater services, for about $200 million. It expects to close the deal in 2026.
2026-07-01: Xylem bought TriOS Mess- und Datentechnik for about EUR 190 million ($216 million).