Business Description
Flowserve Corporation is a global enterprise that specializes in the conception, creation, distribution, and upkeep of industrial equipment crucial for managing fluid movement. The company extends its reach across the United States, Europe, the Middle East, Africa, Asia, and other international markets. Its operations are structured into two principal divisions: the Flowserve Pump Division (FPD) and the Flow Control Division (FCD). The FPD segment provides a diverse range of pumping solutions, encompassing both custom-engineered and pre-configured pumps and systems, mechanical seals, auxiliary components, and essential replacement parts and upgrades. This division also delivers comprehensive post-sales support, including installation and initial setup, provision of seal system spare parts, repairs, advanced diagnostic services, performance re-rating and enhancement solutions, retrofit initiatives, precision machining, and asset management programs. A notable product from FPD is its gas-lubricated mechanical seal, specifically designed for high-speed compressors used in gas pipeline networks. The FCD segment concentrates on sophisticated valve and automation technologies for industrial applications. Its offerings include various isolation and control valves, actuation systems, and associated control equipment. Furthermore, FCD provides critical maintenance for flow control systems, such as advanced diagnostics, repair services, installation, commissioning, retrofitting programs, and field machining. The products within this segment are instrumental in accurately controlling, guiding, and regulating the flow of diverse liquids, gases, and other fluids. Flowserve primarily serves key sectors such as the oil and gas industry, chemical and pharmaceutical manufacturing, power generation, and water management. Additionally, the company caters to a broad spectrum of general industrial applications, including mining and ore processing, pulp and paper production, the food and beverage industry, and numerous smaller-scale uses. Products are disseminated through a multi-channel network involving direct sales teams, independent distributors, and dedicated sales representatives. Flowserve Corporation, founded in 1912, maintains its corporate headquarters in Irving, Texas.
Business History
Generated: Jun 9, 2026 6:15pmPrice Overview
Last updated: Jun 9, 2026 6:13pm (17d ago)Price History (1 Year)
Revenue & Net Income Trend
| Period | Revenue | Net Income | Net Margin | YoY/QoQ |
|---|
Key Metrics
EPS (Diluted): 2.66
Total Equity: $2.19B
Shares: 130,979,000
Total Debt: $1.76B
Cash: $760.18M
EBITDA: $709.35M
Total Debt: $1.76B
Cash: $760.18M
Revenue: $4.73B
Revenue: $4.73B
Revenue: $4.73B
Total Equity: $2.19B
Tax Rate: 29.6%
Equity: $2.19B
Total Debt: $1.76B
Cash: $760.18M
Current Liabilities: $1.50B
Long-Term Debt: $1.67B
Total Debt: $1.76B
Total Equity: $2.19B
Shares: 130,979,000
Shares: 130,979,000
CapEx: -$70.93M
Shares: 130,979,000
Stock Price: $74.86
Net Income: $346.25M
Industry Benchmarks
Advanced Analysis Forensic deep-dive · three lenses
The trajectory is the story. Revenue grew from $3.54B (2021) to $4.73B (2025), a ~7.5% CAGR, while gross margin expanded from 30.1% to 34.6% and operating margin nearly doubled from 8.1% to 13.0%. Net income compounded from $126M to $346M and FCF from $195M to $435M — operating leverage is real and not an accounting artifact (OCF/NI 1.3x, accruals -1.2% of assets, Beneish M -2.83, Altman Z 4.21). This looks like a mature industrial executing on a multi-year self-help/margin program rather than a cyclical sugar high.
Capital discipline is solid: diluted shares essentially flat at ~131M over five years, SBC just 0.8% of revenue, and buybacks running 193% of SBC — per-share value is being protected. The balance sheet is the one soft spot: net debt of ~$1.0B against $760M cash means the balance sheet is a constraint rather than a fortress, though $435M annual FCF makes the leverage easily serviceable. The 2022 FCF dip to -$116M (working-capital build during the revenue inflection) is worth understanding but has clearly normalized.
Insider behavior reinforces the read: CFO McMurray's $164K open-market purchase and Savoy's $67K buy in May 2026 are real cash-out-of-pocket signals layered on top of routine awards — small in absolute dollars but directionally positive and consistent with management believing the operating momentum continues.
Verify before trusting this (7)
- Backlog and book-to-bill trend — is the 2025 margin sustainable into 2026?
- End-market mix (oil & gas vs water vs power vs chemical) and customer concentration
- Debt maturity schedule and weighted cost of debt against the $1.0B net debt
- Aftermarket vs original-equipment revenue split (aftermarket = moat indicator for flow control)
- Whether 2022 working-capital build was inventory pre-build or AR stretch
- Pension and warranty liabilities (common in legacy industrials)
- Any large M&A in the period that flatters organic growth/margin comparisons
The e2e composite fair value of $32.57 and signal-adjusted $36.88 imply ~51% downside from $75.97. I don't take that at face value — both anchors (DCF $32.40 and EPV floor $32.90) appear to capitalize current/normalized earnings without much credit for the margin-recovery program the Quality lens confirms is real. A 2x premium to DCF on a Strong-graded operator with clean accruals and improving margins is the market pricing in the turnaround, not ignoring value.
That said, deserved value on a quality-adjusted basis is probably somewhere between the EPV floor (~$33) and a more generous mid-cycle multiple — call it $55-65 on a generous read. At $76, you're paying for flawless backlog conversion, sustained margin expansion, and no cyclical pump-market wobble. There is no margin of safety here; the bull case is largely in the price. Earnings quality is high so no haircut, but that just means the numbers are believable — it doesn't make the multiple cheap.
This is the classic 'good business, full price' setup. Fairly-to-modestly rich, not egregiously overvalued.
Verify before trusting this (4)
- Forward operating margin guidance and book-to-bill trend in next 10-Q/transcript
- Backlog composition — aftermarket vs original equipment mix and pricing
- Any pump-market end-demand softness called out by management or peers
- Management's mid-cycle margin target and capital allocation (buyback pace vs debt paydown)
FLS is a turnaround-bet archetype with strong intensity but only moderate durability and low cult following - which means the story lives or dies on quarterly execution proof points, and the April Q1 print (revenue -6.7% y/y, 12% single-day drop) directly punctured the narrative. The bull case requires belief that margin recovery and backlog conversion are real; a top-line miss is exactly the kind of evidence bears need to argue the backlog masks demand weakness. With zero analyst target revisions this month and a Hold-skewed consensus (16 Holds vs 14 Buys), the sell-side is on the fence and not actively defending the name. The macro overlay adds modest pressure rather than a crushing blow. The tape is technically neutral but VIX at 17 and 10y at 4.53% keep risk appetite cautious for higher-beta cyclicals; FLS at beta 1.25 in industrial machinery sits squarely in the cohort that gets sold on any tape wobble. There is no AI tailwind, no energy capex euphoria, no defense story carrying this name - it has to win on its own narrative, and that narrative just took a hit. Net: more headwind than tailwind, but not catastrophic - the story is wounded, not dead, and the next print is the swing factor.
Verify before trusting this (4)
- Next quarterly print - revenue trajectory and margin progress; another miss likely breaks the narrative outright
- Any sell-side downgrades or target cuts following the Q1 miss that have not yet appeared in revisions data
- Industrial machinery peer tape - if the cohort rotates back into favor, FLS gets a passive lift
- Bookings/backlog disclosure quality - bears will pounce on any softness as confirmation of demand weakness
Deep Analysis
Pre-flight intelligence scans the company first, then routes to the right analytical methods.
Income Statement (Annual)
Last updated: Jun 9, 2026 6:15pm (17d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Revenue | $3.5B | $3.6B | $4.3B | $4.6B | $4.7B |
| Cost of Revenue | $2.5B | $2.6B | $3.0B | $3.1B | $3.1B |
| Gross Profit | $1.1B | $994.7M | $1.3B | $1.5B | $1.6B |
| Operating Expenses | $781.4M | $801.3M | $894.0M | $950.4M | $1.0B |
| Operating Income | $285.1M | $193.4M | $403.8M | $515.4M | $613.9M |
| Net Income | $125.9M | $188.7M | $186.7M | $282.8M | $346.2M |
| EBITDA | $291.0M | $291.6M | $374.4M | $541.1M | $709.3M |
| EPS | $0.97 | $1.44 | $1.42 | $2.15 | $2.66 |
| EPS (Diluted) | — | — | — | — | — |
Balance Sheet (Annual)
Last updated: Jun 9, 2026 6:13pm (17d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Cash & Equivalents | $658.5M | $435.0M | $545.7M | $675.4M | $760.2M |
| Total Current Assets | $2.4B | $2.5B | $2.7B | $2.9B | $3.0B |
| Total Assets | $4.7B | $4.8B | $5.1B | $5.5B | $5.7B |
| Current Liabilities | $1.1B | $1.2B | $1.4B | $1.5B | $1.5B |
| Long-Term Debt | $1.3B | $1.2B | $1.2B | $1.4B | $1.7B |
| Total Liabilities | $2.9B | $2.9B | $3.1B | $3.4B | $3.5B |
| Total Equity | $1.8B | $1.8B | $1.9B | $2.0B | $2.2B |
| Retained Earnings | $3.7B | $3.8B | $3.9B | $4.0B | $4.3B |
Cash Flow (Annual)
Last updated: Jun 7, 2026 4:25pm (19d ago)| Metric | 2021 | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|---|
| Operating Cash Flow | $250.1M | -$40.0M | $325.8M | $425.3M | $505.9M |
| Capital Expenditure | -$54.9M | -$76.3M | -$67.4M | -$81.0M | -$70.9M |
| Free Cash Flow | $195.2M | -$116.3M | $258.4M | $344.3M | $435.0M |
| Acquisitions (net) | -$7.2M | $-225,000 | -$3.3M | -$308.4M | -$65.9M |
| Debt Repayment | — | — | — | — | — |
| Dividends Paid | — | — | — | — | — |
| Stock Buybacks | -$17.5M | $0 | $0 | -$20.1M | -$254.9M |
| Net Change in Cash | -$436.8M | -$223.5M | $110.7M | $129.8M | $84.7M |
Analyst Estimates (Annual)
Last updated: Jun 9, 2026 6:13pm (17d ago)| Metric | 2026 | 2027 | 2028 | 2029 |
|---|---|---|---|---|
| Revenue |
$4.9B $4.9B – $4.9B
|
$5.2B $5.2B – $5.3B
|
$5.5B $5.5B – $5.5B
|
$5.8B $5.7B – $5.8B
|
| EBITDA |
$505.7M $503.1M – $509.6M
|
$542.4M $540.3M – $547.6M
|
$565.0M $565.0M – $565.0M
|
$599.0M $595.8M – $603.6M
|
| Net Income |
$530.5M $525.3M – $535.8M
|
$604.9M $595.1M – $614.7M
|
$670.1M $664.4M – $675.7M
|
$744.0M $738.9M – $751.4M
|
| EPS | — | — | — | — |
Growth Trends (YoY %)
Last updated: Jun 9, 2026 6:15pm (17d ago)| Metric | 2022 | 2023 | 2024 | 2025 |
|---|---|---|---|---|
| Revenue Growth | +2.1% | +19.5% | +5.5% | +3.8% |
| Gross Profit Growth | -6.7% | +30.5% | +12.9% | +11.6% |
| Operating Income Growth | -32.2% | +108.8% | +27.6% | +19.1% |
| Net Income Growth | +49.8% | -1.0% | +51.4% | +22.5% |
| EBITDA Growth | +0.2% | +28.4% | +44.5% | +31.1% |
Insider Trading (Recent)
Last updated: Jun 9, 2026 6:15pm (17d ago)All SEC Form 4 codes
- P Purchase
- Open-market or private purchase of shares.
- S Sale
- Open-market or private sale of shares.
- A Award / grant
- Grant or award of securities (RSUs, options, etc.) under Rule 16b-3.
- D Return to issuer
- Securities disposed back to the company under Rule 16b-3.
- F In-kind (tax)
- Shares withheld or delivered to pay the option-exercise price or tax — not an open-market sale.
- I Discretionary
- Discretionary transaction under an employee plan — Rule 16b-3(f).
- M Option exercise
- Exercise or conversion of a derivative (option/RSU) into shares — exempt.
- C Conversion
- Conversion of a derivative security into the underlying shares.
- E Short expiration
- Expiration of a short derivative position.
- H Long expiration
- Expiration or cancellation of a long derivative position with value received.
- O OTM exercise
- Exercise of an out-of-the-money derivative.
- X ITM exercise
- Exercise of an in-the-money or at-the-money derivative.
- G Gift
- Bona fide gift of securities.
- L Small acquisition
- Small acquisition under Rule 16a-6.
- W Inheritance
- Acquisition or disposition by will or the laws of descent.
- Z Voting trust
- Deposit into or withdrawal from a voting trust.
- J Other
- Other acquisition or disposition (explained in a Form 4 footnote).
- K Equity swap
- Transaction in an equity swap or similar instrument.
- U Tender / buyout
- Disposition via tender of shares in a change-of-control transaction.
Compensation-plan codes (A, D, F, M) are routine and rarely directional. Open-market P (buy) and S (sale) carry the most signal.
| Date | Insider | Type | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-06-16 | Boukalik Brian | M-Exempt | 681.00 | $0.00 | $0 |
| 2026-06-16 | Boukalik Brian | M-Exempt | 701.00 | $0.00 | $0 |
| 2026-06-16 | Boukalik Brian | F-InKind | 171.00 | $78.07 | $13,350 |
| 2026-06-01 | Rowe Robert Scott | A-Award | 58.00 | $75.51 | $4,380 |
| 2026-06-01 | Hudson Susan Claire | A-Award | 32.00 | $75.51 | $2,416 |
| 2026-05-18 | McMurray Michael C. | 0.00 | $0.00 | $0 | |
| 2026-05-18 | McMurray Michael C. | P-Purchase | 2,500.00 | $65.71 | $164,275 |
| 2026-05-14 | Savoy Brian D | A-Award | 2,573.00 | $67.99 | $174,938 |
| 2026-05-14 | Savoy Brian D | P-Purchase | 1,000.00 | $67.34 | $67,340 |
| 2026-05-14 | CHANDY RUBY R | A-Award | 2,573.00 | $0.00 | $0 |
| 2026-05-14 | CHANDY RUBY R | A-Award | 88.00 | $0.00 | $0 |
| 2026-05-14 | Shuster Ross B. | A-Award | 2,573.00 | $0.00 | $0 |
| 2026-05-14 | GARRISON JOHN L JR | A-Award | 2,573.00 | $0.00 | $0 |
| 2026-05-14 | GARRISON JOHN L JR | A-Award | 1,071.00 | $0.00 | $0 |
| 2026-05-14 | Johnson Cheryl H | A-Award | 2,573.00 | $0.00 | $0 |
| 2026-05-14 | Johnson Cheryl H | A-Award | 463.00 | $0.00 | $0 |
| 2026-05-14 | McMurray Michael C. | A-Award | 2,573.00 | $67.99 | $174,938 |
| 2026-05-14 | Okray Thomas B | A-Award | 2,573.00 | $67.99 | $174,938 |
| 2026-05-14 | Chand Sujeet | A-Award | 2,573.00 | $0.00 | $0 |
| 2026-05-01 | Hudson Susan Claire | A-Award | 33.00 | $73.64 | $2,430 |
Dividend History (Last 20)
Last updated: Jun 9, 2026 6:13pm (17d ago)| Date | Dividend | Declaration | Record | Payment |
|---|---|---|---|---|
| 2026-06-26 | $0.22 | 2026-05-14 | 2026-06-26 | 2026-07-10 |
| 2026-03-27 | $0.22 | 2026-02-13 | 2026-03-27 | 2026-04-10 |
| 2025-12-26 | $0.21 | 2025-12-12 | 2025-12-26 | 2026-01-09 |
| 2025-09-26 | $0.21 | 2025-08-14 | 2025-09-26 | 2025-10-10 |
| 2025-06-27 | $0.21 | 2025-05-16 | 2025-06-27 | 2025-07-11 |
| 2025-03-28 | $0.21 | 2025-02-18 | 2025-03-28 | 2025-04-11 |
| 2024-12-27 | $0.21 | 2024-12-16 | 2024-12-27 | 2025-01-10 |
| 2024-09-27 | $0.21 | 2024-08-15 | 2024-09-27 | 2024-10-11 |
| 2024-06-28 | $0.21 | 2024-05-20 | 2024-06-28 | 2024-07-12 |
| 2024-03-27 | $0.21 | 2024-02-20 | 2024-03-28 | 2024-04-12 |
| 2023-12-28 | $0.20 | 2023-12-12 | 2023-12-29 | 2024-01-12 |
| 2023-09-21 | $0.20 | 2023-08-16 | 2023-09-22 | 2023-10-06 |
| 2023-06-22 | $0.20 | 2023-05-31 | 2023-06-23 | 2023-07-07 |
| 2023-03-23 | $0.20 | 2023-03-01 | 2023-03-24 | 2023-04-07 |
| 2022-12-29 | $0.20 | 2022-12-12 | 2022-12-30 | 2023-01-13 |
| 2022-09-29 | $0.20 | 2022-08-22 | 2022-09-30 | 2022-10-14 |
| 2022-06-23 | $0.20 | 2022-05-12 | 2022-06-24 | 2022-07-08 |
| 2022-03-24 | $0.20 | 2022-02-17 | 2022-03-25 | 2022-04-08 |
| 2021-12-29 | $0.20 | 2021-12-08 | 2021-12-30 | 2022-01-14 |
| 2021-09-23 | $0.20 | 2021-08-12 | 2021-09-24 | 2021-10-08 |
Narrative Economics
market-narrative step).
Delvantic AI Findings
Looking at the raw quarterly cadence first: revenue has been remarkably flat — $1.13B, $1.16B, $1.18B, $1.14B, $1.19B, $1.17B, $1.22B, $1.07B over the last eight quarters. That's a 3-4% YoY drift, not a transformation. The Q3 2025 net income spike to $219.6M at 18.7% margin is a clear outlier (likely a one-time gain or tax benefit) bracketed by a -$29M loss in Q4 2025 and $81.7M in Q1 2026. Strip the noise and you get ~6.5-7% normalized net margin, consistent with the 2024 full-year run-rate. Annual progression is more flattering: revenue $3.54B→$4.73B (+34% over four years, 7.5% CAGR), operating income $285M→$614M (+115%), so operating margin expanded from 8.1% to 13.0%. That margin story is real, but most of it already happened — op margin was 11.3% in 2023 already.
On valuation, the Synthesis verdict of $32-37 fair value vs $75 is implausibly bearish. FLS generated $435M FCF in 2025 on a $9.57B market cap — that's a 4.5% FCF yield, not screaming cheap but not 50% overvalued either. EV/EBITDA at 15.8x and P/E at 27.4x are full but defensible for an industrial with 36% earnings CAGR and improving ROIC (9.3%). A $33 fair value implies ~7x EBITDA, which is recessionary-trough multiple for a company posting record margins and order intake. The Synthesis model appears to be DCF-anchoring to mid-cycle 2021-2022 cash flows and ignoring the structural margin step-up. I dissent from that verdict. The Market Forces "tailwinds" read and the Narrative model's framing of a contested turnaround are closer to reality — though Narrative is right that the +106% premium to DCF is execution-dependent.
The contrarian case I'd actually worry about isn't the Synthesis $33 target — it's cyclicality. Flowserve is levered to oil & gas, chemicals, and power capex. The 2024-2025 margin expansion coincided with peak energy capex and a backlog tailwind. If you're paying 27x TTM earnings at what may be a cyclical peak operating margin (13%), the forward picture is uglier: normalize op margin to 10% and 2026 revenue flat at $4.7B, you get ~$470M op income, ~$340M net, and a forward P/E of 28x on normalized earnings — expensive. Q1 2026 revenue of $1.07B is the lowest print in seven quarters and signals the "decelerating" revenue confidence flag is real. Insider P-Purchases of 3,500 shares in May 2026 are nice but tiny — not the conviction signal the secondary read implies. Balance sheet data is missing (no debt figure), which is a meaningful gap given the Market Forces note about "rising leverage."
My verdict: the Synthesis model is wrong by being too bearish, but the bull narrative is also stretched. Fair value at 18-20x normalized EPS of ~$3.50-4.00 puts intrinsic value at $63-75 — i.e., FLS is roughly fairly priced, with asymmetric downside if Q2 2026 confirms the deceleration trend or if energy capex rolls. The Pre-Flight thesis that the market is pricing "modest confidence in 6-7% normalized margins" is the most honest read in the stack. I wouldn't short it (FCF quality is genuinely strong, insider buying is a mild positive, aftermarket revenue is real), but I wouldn't chase it here either. The Narrative model nails it: this is a turnaround-bet whose durability is moderate and depends on the next two quarterly prints. The Q1 2026 revenue dip to $1.07B is a yellow flag the bulls are ignoring.
GPT Critique
Analyzing Flowserve Corporation's financial data independently, a few key elements stand out. The company has experienced stable yet modest revenue growth with a CAGR of 7.5% over the past four years, reaching $4.73 billion in 2025. This growth is mirrored by an impressive expansion in operating income, which more than doubled from $285 million in 2021 to $614 million in 2025, reflecting a significant operating margin improvement from 8.1% to 13.0%. However, the quarterly revenue remains relatively flat, with minor fluctuations, and the recent Q1 2026 revenue of $1.07 billion is concerning as it represents the lowest figure in seven quarters. The net income peaks and valleys, particularly the anomaly in Q3 2025, suggest that some earnings may be non-recurring, which can skew the perception of profitability. Additionally, the company's free cash flow generation is robust at $435 million, suggesting a healthy cash conversion cycle despite the revenue deceleration.
I agree with Opus in questioning the validity of the Synthesis model's valuation of $32-37, which seems overly bearish. Opus correctly points out that the model likely overemphasizes historical mid-cycle cash flows while underappreciating the company's recent structural margin improvements. The current EV/EBITDA of 15.8x and P/E ratio of 27.4x reflect a full valuation, yet they are not entirely unjustifiable given the company's 36% earnings CAGR and notable improvements in return metrics like ROIC. Opus's fair value range of $63-75 based on normalized EPS seems reasonable given the current market dynamics and Flowserve's financial performance.
However, I diverge from Opus on the potential downside risks associated with cyclicality. While Opus highlights the risk of operating margin contraction if energy capex is indeed at a cyclical peak, I believe the company's diversification across industrial sectors and its strategic focus on aftermarket services provide a cushion against pure cyclicality in oil and gas. The macro environment does present headwinds, but Flowserve's strong cash flow quality and the strategic pivot towards energy transition markets position it to weather potential downturns better than Opus suggests.
A careful skeptic might argue that both analyses overlook the potential for a quicker-than-expected shift in energy and industrial markets towards newer technologies, which could undermine Flowserve's traditional product lines more rapidly than anticipated. Additionally, the lack of detailed balance sheet data, especially concerning debt levels, poses a risk that neither Opus nor I adequately address, which could be critical if leverage is indeed rising as noted.