PNR

Industrials

Pentair

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$3.4B	$2.7B	$3.0B	$3.5B	$4.4B	$7.5B	$7.0B	$6.4B	$2.8B	$2.8B	$3.0B	$3.0B	$3.0B	$3.8B	$4.1B	$4.1B	$4.1B	$4.2B	+2.3%
Gross Profit	$1.0B	$785.1M	$930.6M	$1.1B	$1.3B	$2.5B	$2.5B	$2.2B	$1.8B	$1.8B	$1.0B	$1.1B	$1.1B	$1.3B	$1.4B	$1.5B	$1.6B	$1.7B	+5.7%
Gross Margin	30.3%	29.2%	30.7%	31.1%	28.7%	33.1%	35.0%	33.9%	64.5%	64.3%	35.3%	35.6%	35.0%	35.0%	33.1%	37.0%	39.2%	40.5%	+1.3pp
Operating Income	$324.7M	$219.9M	$334.2M	$168.5M	-$43.1M	$774.0M	$851.9M	$177.2M	$700.7M	$680.8M	$436.7M	$432.5M	$461.4M	$636.9M	$595.3M	$739.2M	$803.8M	$857.5M	+6.7%
Operating Margin	9.7%	8.2%	11.0%	4.9%	-1.0%	10.3%	12.1%	2.7%	25.2%	23.9%	14.7%	14.6%	15.3%	16.9%	14.4%	18.0%	19.7%	20.5%	+0.8pp
Net Income	$228.7M	$115.5M	$197.8M	$34.2M	-$107.2M	$536.8M	$214.9M	-$76.4M	$522.2M	$666.5M	$347.4M	$355.7M	$358.6M	$553.0M	$480.9M	$622.7M	$625.4M	$653.8M	+4.5%
Net Margin	6.8%	4.3%	6.5%	1.0%	-2.4%	7.2%	3.1%	-1.2%	18.8%	23.4%	11.7%	12.0%	11.9%	14.7%	11.7%	15.2%	15.3%	15.7%	+0.3pp
Free Cash Flow	$151.1M	$204.2M	$210.9M	$246.9M	-$26.6M	$745.3M	$878.8M	$605.0M	$743.6M	$549.3M	$390.9M	$294.5M	$511.4M	$553.0M	$278.1M	$543.2M	$692.3M	$746.0M	+7.8%
FCF Margin	4.5%	7.6%	7.0%	7.1%	-0.6%	10.0%	12.5%	9.4%	26.7%	19.3%	13.2%	10.0%	16.9%	14.7%	6.7%	13.2%	17.0%	17.9%	+0.9pp
EPS (Diluted)	$2.31	$1.17	$1.99	$0.34	$-0.84	$2.62	$1.11	$-0.42	$2.85	$3.63	$1.96	$2.09	$2.14	$3.30	$2.90	$3.75	$3.74	$3.96	+5.9%

Total Debt$1.6B

Cash & Equiv.$82.5M

Net Debt$1.6B

4 min read

1. THE BIG PICTURE

Pentair is currently a study in internal optimization over external expansion. While Pentair is successfully squeezing record levels of cash from its operations through its "Transformation Program" and "80/20" initiatives, it is struggling to find meaningful volume growth in a cooling macro environment. The central tension for investors is whether Pentair’s industry-leading cash flow conversion can eventually be paired with the faster growth seen in peers like Veralto or Xylem.

2. WHERE THE RISKS HIT HARDEST

Pentair’s primary competitive advantage—its established distribution network—is simultaneously its greatest vulnerability. Pentair’s reliance on these channels has led to a dangerous level of customer concentration, where a single relationship accounts for 18% of consolidated net sales (10-K Item 1A). Any deterioration in this relationship would immediately compromise the cash flows that support Pentair’s 50-year streak of dividend increases. Furthermore, the "reputation for quality" that Pentair cites as a differentiator is constantly threatened by commodity volatility in metals and resins; if Pentair cannot pass these costs through to customers in a competitive market, its margins will compress regardless of its internal transformation efforts.

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a sharp divergence between Pentair’s operational efficiency and its market demand. Pentair’s free cash flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin of 22.9% is the highest among its peers, nearly tripling Xylem’s 7.9% (XBRL). However, this efficiency is masking a growth problem: Pentair’s 2.3% revenue growth ranks 5th out of 6 peers.

Recent quarterly results highlight this friction. While the Flow and Pool segments saw sales increases of 9% and 11% respectively, the Water Solutions segment collapsed by 10% (8-K). This suggests that Pentair’s growth is currently reliant on specific product cycles rather than a rising tide across its portfolio. Management is attempting to bridge this gap by creating new executive roles to better align these lagging business units with distribution channels. Short interest stands at 3.5% of the float, suggesting that while there is no massive bet against Pentair, a segment of the market remains skeptical of the growth narrative.

4. IS IT WORTH IT AT THIS PRICE?

At 15.6x forward earnings, Pentair trades at a 23% discount to the peer median of 20.2x. This modest discount is justified by Pentair’s slower growth trajectory (+2.3% TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter) compared to faster-growing peers like Veralto (+6.0%).

According to the market-implied growth analysis, the current price assumes ~4.7% long-term growth. This is slightly above management's 2026 sales guidance of 3% to 4% (8-K). For this valuation to be "right," Pentair must prove that its Transformation Program can do more than just cut costs—it must translate into the "accelerated growth strategy" management has promised. If growth were to slow toward a GDP-pace of 2.5%, the justified multiple could fall as low as 11.5x. However, for income-oriented investors, the 1.5% buyback yield and 1.1% dividend yield provide a total shareholder return profile that is more competitive than its P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations ratio suggests.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if the Water Solutions segment returns to core growth and the Pool segment stabilizes its return on sales, which recently dipped by 20 basis points.
Cautious if the 18% customer concentration increases further or if rising interest rates lead to a sustained downturn in residential pool and real estate capital spending.

6. BOTTOM LINE

Structural Advantage: Industry-leading free cash flow conversion supported by a 50-year history of dividend growth and deeply embedded distribution networks.

Bottom Line: Pentair is a high-quality cash generator trading at a fair discount, but its lack of top-line momentum makes it a defensive play rather than a growth engine.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Economic Cyclicality: Pentair’s results of operations are subject to fluctuations driven by global economic conditions, including industrial and governmental capital spending, residential real estate strength, and interest rate environments. A sustained downturn in any specific end market or region could materially reduce demand for Pentair’s products.
Competitive Margin Pressure: The markets for Pentair’s products are highly competitive, with participants ranging from large global firms to lower-cost manufacturers. During economic downturns, competitors often engage in aggressive pricing, which can force Pentair to lower prices or incur additional costs to remain competitive, directly impacting profit margins.
Customer Concentration: Pentair’s largest customer accounted for approximately 18% of its consolidated net sales in 2025. The loss of, or a material reduction in, purchases by this customer would have a material adverse effect on Pentair’s financial condition and cash flows.
Supply Chain Disruptions: Pentair relies on a wide variety of domestic and international suppliers. Interruptions—caused by factors such as manufacturing plant casualties, logistics failures, or trade restrictions—can limit Pentair’s ability to meet customer demand and fulfill its backlog, negatively impacting profitability.
Transformation and Restructuring Execution: Pentair is currently executing a Transformation Program and 80/20 guiding principles to drive margin expansion and operational excellence. There is a risk that Pentair may fail to achieve these efficiencies or that the exit of certain customers and products under the 80/20 strategy could reduce revenues more than anticipated.

2. Company-Specific Risks

Asbestos Litigation: Pentair’s subsidiaries are defendants in approximately 795 asbestos-related claims, primarily related to discontinued operations. While many claims are covered by historical insurance, the erosion of this coverage could force Pentair to set aside greater reserves for uninsured losses.
ERP Implementation: Pentair is in the process of a multi-year implementation of a global enterprise resource planning (ERP) system. Failure to design or implement this system as planned could negatively impact Pentair’s financial position and the effectiveness of its internal controls over financial reporting.
Goodwill and Intangible Asset Impairment: As of December 31, 2025, Pentair held $4,611.4 million in goodwill and intangible assets, representing approximately 67% of its total assets. A decline in fair market value could trigger significant impairment charges.
Seasonality: Pentair’s Pool and Water Solutions segments experience seasonal demand highs between April and September. Adverse weather patterns, such as cold or wet conditions, can negatively impact sales and financial results during these critical periods.

3. Regulatory/Legal Risks

Tax Residency and Pillar Two: Pentair is subject to the Organization for Economic Co-operation and Development’s Pillar Two Model Rules, which mandate a 15% global minimum tax. This has negatively impacted Pentair’s effective tax rate in 2025 and is expected to continue doing so.
Environmental Liability: Pentair is subject to stringent environmental laws, including those governing the handling of PFAS. Pentair has projects underway to remediate contamination at current and former facilities and may be named as a potentially responsible party (PRP) in future environmental matters.
Trade Compliance: Pentair’s global operations require adherence to complex import/export controls and anti-corruption laws, including the U.S. Foreign Corrupt Practices Act (FCPA) and the U.K. Bribery Act. Violations could result in material fines, denial of export privileges, and reputational damage.
Irish Law Constraints: As an Irish-incorporated company, Pentair faces limitations on its ability to issue ordinary shares without shareholder authorization and may be subject to Irish stamp duty on share transfers held directly rather than through the Depository Trust Company (DTC).

4. Financial Impact Map

Economic Cyclicality → Net Sales → Fluctuations in industrial and residential demand directly impact top-line revenue.
Competitive Margin Pressure → Profit Margins → Aggressive pricing by competitors and shifts in distribution channels can compress margins.
Customer Concentration → Consolidated Net Sales → The loss of the largest customer (18% of 2025 sales) would cause a material reduction in total revenue.
Transformation Program → Operating Expenses / Restructuring Charges → The program incurs substantial costs for professional services, project management, and labor/non-labor restructuring.
Goodwill and Intangible Assets → Total Assets / Net Income → A decline in fair market value would result in impairment charges, reducing the carrying value of assets and impacting earnings.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-K	Feb 2026	Dec 2025
8-K	Feb 2026	—
10-Q	Oct 2025	Sep 2025
14A	Mar 2025	—