XYL

Xylem Inc.Industrials / Specialty Industrial MachineryINTACT

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.

Share Price
$107.09
52W: $105.29 - $154.27
DCF Fair Value
$102.71
-4.3% Premium
P/E (TTM)
25.7x
ROIC
12.8%
Operating Margin
17%
FCF Yield
4.7%
Debt / Equity
0.29x
Piotroski Score
9/9
Altman Z-Score
3.55
Market Cap
$25B

Price vs. Intrinsic Value Corridor

Overvalued vs DCF ($102.71)

Historical market price overlaid against conservative DCF Fair Value & Benjamin Graham Margin of Safety bands.

Period Return (1Y)
()
Period Range
$ - $
DCF Fair Value
$102.71
MOS Buy Target (-25%)
$77.03
Valuation Overlays:

2-Stage Discounted Cash Flow (DCF) Workbench

Conservative intrinsic value model based on owner cash generation over a 10-year investment horizon. Opens with LocalAlpha's baseline assumptions (matching the fair value shown above) — adjust any input to stress-test.

Current Market Price
$107.09
DCF Fair Value
$102.68
-4.3% Premium
$1,184M
$100M$1,184M (Reported)$50,000M
8.5%
-5%10% (Target)35%
4.5%
0%5%20%
9.0%
6%9% (Standard)15% (High Risk)
2.5%
1% (GDP Floor)2.5% (Inflation)4.0%
$1,800M
-$100B CashBalance Sheet+$150B Debt
10-Yr PV of Cash Flows
$10.9B
PV of Terminal Value
$14.8B
Implied Enterprise Value
$25.7B
Implied Equity Value
$23.9B
YearYr 1Yr 2Yr 3Yr 4Yr 5Yr 6Yr 7Yr 8Yr 9Yr 10
Projected FCF ($M)$1,285$1,394$1,512$1,641$1,780$1,860$1,944$2,032$2,123$2,219
Present Value (PV)$1,179$1,173$1,168$1,162$1,157$1,109$1,064$1,020$978$937

Benjamin Graham & Buffett Value Models

Classical deep value metrics based on asset backing, normalized earnings power, and owner cash yield.

Graham Number-61.2% Premium
$66.42

Calculated as √(22.5 × EPS × BVPS). The maximum theoretical price a defensive investor should pay based purely on asset book value and current earnings.

EPS: $4.16BVPS: $47.13
Revised Graham Formula-31.9% Premium
$81.22

Formula: V = (EPS × (8.5 + 2g) × 4.4) / Y where g is the conservative 7-10 yr growth rate and Y is AAA Bond Yield.

Buffett Owner Earnings4.5% Yield
$4.83 / share

True distributable cash flow: Net Income + D&A - Maintenance CapEx. Reflects the cash Buffett would extract without hurting unit volume.

Total: $1.1BYield: 4.5%

Reverse DCF: Market Growth Expectation

MODEST BARRIER
6.3% CAGR (Next 10 Yrs)

At the current price of $107.09, the market is assuming the business will compound Free Cash Flow at 6.3% per year for the next decade with a 9% hurdle rate.

Value Investor Verdict
✓ Low market hurdle: Easy for a wide-moat compounder to beat.
Autonomous Thesis Underwriting

Surveil XYL with Mathematical Margin of Safety Rules

Set non-negotiable floor rules for Xylem Inc.. If a newly filed quarterly 10-Q breaks your ROIC floor, operating margin boundary, or balance sheet leverage rules, receive an autonomous breach audit within 15 minutes.

Buffett Quality

ROIC > 15% • Margin > 15% • D/E < 0.5x

Margin Floor Guard

Current Margin 17% • Floor > 10%

Solvency Guard

Altman-Z > 2.6 • Current Ratio > 1.5x

Frequently Asked Questions: Xylem Inc. (XYL) Intrinsic Valuation

Audited fundamentals, DCF intrinsic value sensitivity, and thesis break detection parameters for Xylem Inc..

Based on institutional multi-stage Discounted Cash Flow (DCF) modeling on audited SEC cash flows, Xylem Inc. has an estimated DCF intrinsic fair value of $102.71 per share compared to its current market price of $107.09. This represents an estimated 4.3% premium over fair value. Additionally, its classic Benjamin Graham Number stands at $66.42.

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