Xylem Inc. XYL recently completed the acquisition of a majority stake in Idrica. The financial terms of the transaction have been kept under wraps.

Idrica is a water cycle management company that drives digital transformation in utilities through advanced water technology. It utilizes data management and analytics to streamline water-cycle operations globally.

Xylem’s Acquisition Rationale

Xylem Vue combines Xylem’s digital water solutions and Idrica’s technology platform. It helps customers solve key challenges like water scarcity and old infrastructure by providing real-time insights.

This acquisition is in sync with XYL’s policy of acquiring businesses to strengthen its business and expand its product portfolio and market share. The inclusion of Idrica’s technology will offer growth opportunities for Xylem. It will enable XYL to penetrate new markets and deliver intelligent solutions to its customers.

Other Notable Buyouts of XYL

Xylem believes in acquiring businesses/assets to expand its product offerings. Acquisitions contributed $782 million to total revenues in the first nine months of 2024. The company acquired mission-critical water treatment solutions and services provider, Evoqua, in May 2023. Evoqua’s advanced water and wastewater treatment capabilities and position in key industrial markets complement Xylem’s portfolio of solutions across the water cycle. The acquisition bolsters the company’s position in water technologies, solutions and services.

XYL’s Zacks Rank

Xylem is seeing growth across most of its businesses. The Measurement & Control Solutions segment is benefiting from robust demand for advanced technology solutions like smart metering and other applications, primarily in the United States.

In the past year, this Zacks Rank #3 (Hold) company’s shares have risen 14.3% compared with the industry’s 23.6% growth.

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However, weakness in the Applied Water segment, which has led to reduced industrial and commercial activity in the United States, is worth keeping an eye on. Rising costs due to high raw material, labor, freight and overhead costs are concerning.

Stocks to Consider

Better-ranked companies are discussed below.

Graham Corporation GHM currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

GHM delivered a trailing four-quarter average earnings surprise of 101.9%. In the past 60 days, the Zacks Consensus Estimate for Graham’s fiscal 2025 earnings has increased 8.4%.

RBC Bearings Incorporated RBC presently carries a Zacks Rank #2 (Buy). The company delivered a trailing four-quarter average earnings surprise of 2.5%.

In the past 60 days, the consensus estimate for RBC’s fiscal 2025 earnings has increased 0.5%.

Kadant Inc. KAI presently carries a Zacks Rank of 2. It has a trailing four-quarter average earnings surprise of 17.2%. 

The Zacks Consensus Estimate for KAI’s 2024 earnings has increased 1.8% in the past 60 days.

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Xylem Inc. (XYL) : Free Stock Analysis Report

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