Zurn Elkay’s first-quarter results were well received by the market, as management credited gains in core product categories and progress on operational initiatives. CEO Todd Adams pointed to the company’s “11% organic sales growth” and highlighted that growth in water safety, control, and drinking water products outpaced other areas. Additionally, the company’s focus on higher-margin offerings and ongoing improvements in its supply chain were cited as key contributors to the quarter’s profitability. CFO David Pauli noted that “continuous improvement activities across the organization” and a shift in product mix boosted margins.

Is now the time to buy ZWS? Find out in our full research report (it’s free for active Edge members).

While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.

Our Top 5 Analyst Questions From Zurn Elkay’s Q1 Earnings Call

• Bryan Blair (Oppenheimer) asked about growth trends in the drinking water segment and adoption of the Pro Filtration line. CFO David Pauli said the installed base of filtered bottle fillers and filtration products grew “at double digit” rates with high attachment from new product features.
• Andrew Krill (Deutsche Bank) inquired about the potential for a further shift toward retrofit and replacement sales. CEO Todd Adams responded that while a 75% mix is unlikely, the share could “drift higher” toward 55% as filtration and installed base growth accelerate.
• Nathan Jones (Stifel) questioned the impact of new tariffs and the company’s ability to pass through costs. Adams explained that Zurn Elkay has “insulated ourselves” from most tariff risk through increased U.S. sourcing, and does not anticipate needing to pass on further price increases in the near term.
• Michael Halloran (Baird) probed whether customers were fatigued by price increases and the company’s approach to incremental pricing. Adams replied that “stability would be a great thing,” noting most competitors face similar cost pressures and customer pushback is not a significant concern currently.
• Jeffrey Reive (RBC) asked about the rationale for holding off on a full-year outlook update. Adams clarified that there are no specific concerns driving the pause, but management prefers to wait for better visibility on tariffs and market trends before updating guidance.

Catalysts in Upcoming Quarters

Looking ahead, our analyst team will be focused on (1) the pace of new product introductions and their early market traction, (2) the evolution of the retrofit and replacement mix as a buffer against construction cycles, and (3) management’s ability to navigate ongoing tariff and supply chain uncertainties. Progress on M&A and capital deployment strategies will also be watched closely as potential levers for further growth.

Zurn Elkay currently trades at $52.81, up from $47.94 just before the earnings. At this price, is it a buy or sell? See for yourself in our full research report (it’s free).

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