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Relative valuation derived from Industrials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 50GRADE C+
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
20.2%
Sector: 8.9%
Dividend Analysis audit
GROWTH
1.58%
Trailing Yield
$1.58
Per $100 Invested
Modest dividend — capital prioritized for reinvestment.
Est. Payout Ratio
34%SAFE
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, FLOWSERVE CORP (FLS) receives a "Hold" rating with a composite score of 52.1/100, ranked #968 out of 4446 stocks. Key factor scores: Quality 50/100, Value 55/100, Momentum 66/100. This is quantitative analysis only — not investment advice.
FLOWSERVE CORP (FLS) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does FLOWSERVE CORP Do?
Flowserve Corporation designs, develops, manufactures, distributes, and services industrial flow management equipment in the United States, Europe, the Middle East, Africa, Asia, and internationally. It operates in two segments, Flowserve Pump Division (FPD) and Flow Control Division (FCD). The FPD segment offers custom and pre-configured pumps and pump systems, mechanical seals, auxiliary systems, replacement parts, upgrades, and related aftermarket services, including installation and commissioning services, seal systems spare parts, repairs, advanced diagnostics, re-rate and upgrade solutions, retrofit programs, and machining and asset management solutions, as well as manufactures a gas-lubricated mechanical seal for use in high-speed compressors for gas pipelines. The FCD segment provides engineered and industrial valve and automation solutions, including isolation and control valves, actuation, controls, and related equipment, as well as equipment maintenance services for flow control systems, including advanced diagnostics, repair, installation, commissioning, retrofit programs, and field machining capabilities. This segment's products are used to control, direct, and manage the flow of liquids, gases, and fluids. The company primarily serves oil and gas, chemical and pharmaceuticals, power generation, and water management markets, as well as general industries, including mining and ore processing, pulp and paper, food and beverage, and other smaller applications. The company distributes its products through direct sales, distributors, and sales representatives. Flowserve Corporation was incorporated in 1912 and is headquartered in Irving, Texas. FLOWSERVE CORP (FLS) is classified as a mid-cap stock in the Industrials sector, specifically within the Machinery industry. The company is led by CEO Robert S. Rowe and employs approximately 16,000 people, headquartered in Irving, Texas. With a market capitalization of $9.6B, FLS is one of the notable companies in the Industrials sector.
FLOWSERVE CORP (FLS) Stock Rating — Hold (April 2026)
As of April 2026, FLOWSERVE CORP receives a Hold rating with a composite score of 52.1/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.FLS ranks #968 out of 4,446 stocks in our coverage universe. Within the Industrials sector, FLOWSERVE CORP ranks among stocks, placing it in the top 10% of its Industrials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
FLS Stock Price and 52-Week Range
FLOWSERVE CORP (FLS) currently trades at $84.38. The stock lost $0.07 (0.1%) in the most recent trading session. The 52-week high for FLS is $92.41, which means the stock is currently trading -8.7% from its annual peak. The 52-week low is $37.34, putting the stock 126.0% above its annual trough. Recent trading volume was 1.4M shares, reflecting moderate market activity.
Is FLS Overvalued or Undervalued? — Valuation Analysis
FLOWSERVE CORP (FLS) carries a value factor score of 55/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 21.65x, compared to the Industrials sector average of 28.33x — a discount of 24%. The price-to-book ratio stands at 4.37x, versus the sector average of 2.23x. The price-to-sales ratio is 4.30x, compared to 0.50x for the average Industrials stock. On an enterprise value basis, FLS trades at 24.00x EV/EBITDA, versus 5.70x for the sector.
Overall, FLS's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
FLOWSERVE CORP Profitability — ROE, Margins, and Quality Score
FLOWSERVE CORP (FLS) earns a quality factor score of 50/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 20.2%, compared to the Industrials sector average of 8.9%, which demonstrates strong shareholder value creation. Return on assets (ROA) comes in at 8.0% versus the sector average of 3.3%.
On a margin basis, FLOWSERVE CORP reports gross margins of 82.9%, compared to 35.8% for the sector. The operating margin is 25.4% (sector: 6.2%). Net profit margin stands at 26.9%, versus 3.9% for the average Industrials stock. Revenue growth is running at -67.1% on a trailing basis, compared to 6.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
FLS Debt, Balance Sheet, and Financial Health
FLOWSERVE CORP has a debt-to-equity ratio of 70.0%, compared to the Industrials sector average of 70.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 2.03x, indicating strong short-term liquidity. Total debt on the balance sheet is $1.58B. Cash and equivalents stand at $834M.
FLS has a beta of 1.35, meaning it is more volatile than the broader market — a $10,000 investment in FLS would be expected to move 34.8% more than the S&P 500 on any given day. The stability factor score for FLOWSERVE CORP is 50/100, reflecting average volatility within the normal range for its sector.
FLOWSERVE CORP Revenue and Earnings History — Quarterly Trend
In TTM 2026, FLOWSERVE CORP reported revenue of $2.29B and earnings per share (EPS) of $2.66. Net income for the quarter was $455M. Gross margin was 82.9%. Operating income came in at $461M.
In FY 2025, FLOWSERVE CORP reported revenue of $1.58B and earnings per share (EPS) of $2.66. Net income for the quarter was $370M. Gross margin was 100.0%. Revenue grew 10.3% year-over-year compared to FY 2024. Operating income came in at $400M.
In Q3 2025, FLOWSERVE CORP reported revenue of $380M and earnings per share (EPS) of $1.69. Net income for the quarter was $224M. Gross margin was 100.0%. Revenue grew -66.4% year-over-year compared to Q3 2024. Operating income came in at $79M.
In Q2 2025, FLOWSERVE CORP reported revenue of $407M and earnings per share (EPS) of $0.62. Net income for the quarter was $88M. Gross margin was 100.0%. Revenue grew -64.9% year-over-year compared to Q2 2024. Operating income came in at $147M.
Over the past 8 quarters, FLOWSERVE CORP has demonstrated a growth trajectory, with revenue expanding from $1.16B to $2.29B. Investors analyzing FLS stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
FLS Dividend Yield and Income Analysis
FLOWSERVE CORP (FLS) currently pays a dividend yield of 1.6%. At this yield, a $10,000 investment in FLS stock would generate approximately $$158.00 in annual dividend income. With a net margin of 26.9%, the dividend appears well-covered by earnings, suggesting sustainable payouts going forward.
FLS Momentum and Technical Analysis Profile
FLOWSERVE CORP (FLS) has a momentum factor score of 66/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 39/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 35/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
FLS vs Competitors — Industrials Sector Ranking and Peer Comparison
Comparing FLS against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full FLS vs S&P 500 (SPY) comparison to assess how FLOWSERVE CORP stacks up against the broader market across all factor dimensions.
FLS Next Earnings Date
No upcoming earnings date has been announced for FLOWSERVE CORP (FLS) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy FLS? — Investment Thesis Summary
FLOWSERVE CORP presents a balanced picture with arguments on both sides. Price momentum is positive at 66/100, suggesting the trend favors buyers.
In summary, FLOWSERVE CORP (FLS) earns a Hold rating with a composite score of 52.1/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on FLS stock.
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Institutional Research Dossier
FLOWSERVE CORP (FLS) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
Flowserve Corp. currently holds a BCR Action Rating of Hold, a position that appears justified given the company's mixed financial performance and valuation. While Flowserve exhibits strong profitability metrics compared to its sector, its negative revenue growth raises concerns. The company's valuation, while seemingly fair on a P/E basis, appears rich when considering EV/EBITDA, suggesting the market may be overvaluing its future prospects relative to its current earnings power.
The primary concern revolves around Flowserve's ability to reignite revenue growth, particularly in light of the significant revenue decline reported. While the company's high margins and returns on equity are attractive, they may not be sustainable if revenue continues to contract. Therefore, a Hold rating is appropriate until there is clearer evidence of a turnaround in revenue and sustained free cash flow generation.
Business Strategy & Overview
Flowserve Corporation operates as a global provider of industrial flow management equipment, serving a diverse range of industries including oil and gas, chemical, power generation, and water management. The company's business is structured around two primary segments: the Flowserve Pump Division (FPD) and the Flow Control Division (FCD). FPD focuses on pumps, pump systems, mechanical seals, and related aftermarket services, while FCD provides engineered and industrial valve and automation solutions. This dual-segment approach allows Flowserve to offer comprehensive flow management solutions to its customers.
Flowserve's strategic positioning centers on providing highly engineered and customized solutions to meet the specific needs of its clients. This often involves working closely with customers to design and develop products tailored to their unique applications. The company also emphasizes aftermarket services, including maintenance, repair, and upgrades, which generate recurring revenue streams and foster long-term customer relationships. This focus on aftermarket services is crucial for maintaining profitability and mitigating the cyclicality of new equipment sales.
The company distributes its products through a combination of direct sales, distributors, and sales representatives, allowing it to reach a broad customer base across various geographic regions. This multi-channel distribution strategy enhances Flowserve's market penetration and responsiveness to local market conditions. Furthermore, Flowserve's global presence enables it to capitalize on growth opportunities in emerging markets, where demand for industrial flow management equipment is increasing.
Flowserve's industry context is characterized by intense competition from other established players and smaller, specialized firms. The company competes on the basis of product performance, reliability, service, and price. Technological innovation and the ability to adapt to changing customer needs are also critical success factors. Flowserve's investment in research and development is essential for maintaining its competitive edge and developing new products and solutions that address evolving market demands.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-67.1%
Sector: 6.4%
-1153% VS SCTR
Economic Moat Analysis
Flowserve's economic moat can be classified as Narrow, primarily derived from a combination of switching costs and intangible assets. The company's engineered solutions, particularly in the FPD and FCD segments, often become deeply integrated into customers' operations. Replacing these systems can be costly and disruptive, creating switching costs that provide Flowserve with a degree of pricing power and customer retention.
The company's intangible assets, including its brand reputation and proprietary technology, also contribute to its narrow moat. Flowserve has a long-standing reputation for providing reliable and high-performance flow management equipment, which enhances customer trust and loyalty. Its proprietary technology, protected by patents and trade secrets, provides a competitive advantage in terms of product differentiation and performance.
However, the moat is not wide due to the presence of numerous competitors in the industrial flow management market. While Flowserve holds a significant market share, it faces competition from both large, diversified industrial companies and smaller, specialized firms. This competition limits Flowserve's ability to consistently earn above-average returns on invested capital.
Furthermore, the cyclical nature of the industries Flowserve serves, particularly oil and gas, can impact its profitability and erode its moat during periods of economic downturn. Reduced capital spending in these industries can lead to decreased demand for Flowserve's products and services, putting pressure on its margins and market share. The company's ability to navigate these cyclical downturns is crucial for maintaining its competitive position and preserving its narrow moat.
The strength of Flowserve's moat is also dependent on its continued investment in research and development and its ability to adapt to changing customer needs. Failure to innovate and develop new products and solutions could weaken its competitive advantage and erode its moat over time. Therefore, ongoing monitoring of Flowserve's innovation pipeline and its ability to maintain customer relationships is essential for assessing the sustainability of its narrow moat.
Financial Health & Profitability
Flowserve's financial health presents a mixed picture. The company exhibits strong profitability metrics, with a gross margin of 82.9%, operating margin of 25.4%, and net margin of 26.9%, all significantly higher than the sector averages of 35.8%, 6.2%, and 3.7%, respectively. This indicates efficient cost management and a strong ability to convert revenue into profit. The company's ROE of 20.2% also surpasses the sector average of 9.2%, suggesting effective utilization of equity capital.
However, the company's revenue growth is a significant concern. The reported revenue growth of -67.1% is substantially lower than the sector average of 6.6%. This decline in revenue raises questions about the company's ability to maintain its profitability in the long term. Analyzing the quarterly financial history reveals fluctuating revenue and net income figures. While recent quarters show improved net income, the revenue figures remain inconsistent.
Flowserve's balance sheet reflects a moderate level of leverage, with a debt-to-equity ratio of 70.00, which is equal to the sector average. The company's current ratio of 2.03 indicates strong liquidity and the ability to meet its short-term obligations. The company holds a substantial cash balance of $833.85 million, providing financial flexibility for investments and acquisitions. However, the total debt of $1.58 billion should be monitored closely.
The absence of free cash flow data (N/A) is a notable omission. Free cash flow is a critical indicator of a company's ability to generate cash and fund its operations, investments, and debt repayments. Without this information, it is difficult to fully assess Flowserve's financial health and sustainability. The inconsistent revenue figures across the quarters, coupled with the lack of FCF data, warrant further investigation.
The reported gross margin of 100% for several quarters in FY2025 is highly unusual and likely an error in the provided data. A gross margin of 100% implies that the company has no cost of goods sold, which is highly improbable for a manufacturing company like Flowserve. This discrepancy raises concerns about the accuracy and reliability of the financial data.
Valuation Assessment
Flowserve's valuation presents a mixed signal. The company's P/E ratio of 26.8x is slightly below the sector average of 27.7x, suggesting that the stock is fairly valued relative to its earnings. However, the EV/EBITDA ratio of 6.7x is higher than the sector average of 5.7x, indicating that the stock may be overvalued when considering its enterprise value relative to its earnings before interest, taxes, depreciation, and amortization.
The discrepancy between the P/E and EV/EBITDA ratios suggests that the market may be placing a premium on Flowserve's future growth prospects, despite the recent decline in revenue. The high EV/EBITDA ratio could also reflect the company's debt levels, which increase its enterprise value. A more comprehensive valuation analysis would require considering the company's free cash flow yield and comparing it to its peers and historical averages.
Given the lack of free cash flow data, it is difficult to assess the company's intrinsic value using discounted cash flow analysis. However, based on the available information, it appears that Flowserve's stock is trading at a fair to slightly overvalued level. The market may be anticipating a turnaround in revenue growth and sustained profitability, which would justify the current valuation.
The company's high margins and returns on equity could also be contributing to its relatively high valuation. Investors may be willing to pay a premium for companies with strong profitability metrics, even if their revenue growth is currently lagging. However, it is important to remember that high margins and returns are not sustainable if revenue continues to decline.
Ultimately, the valuation of Flowserve's stock depends on its ability to reignite revenue growth and generate consistent free cash flow. If the company can successfully execute its strategic initiatives and capitalize on growth opportunities in its target markets, the current valuation may prove to be justified. However, if revenue continues to decline, the stock is likely to be overvalued.
Risk & Uncertainty
Flowserve faces several specific risks that could negatively impact its business and financial performance. One of the primary risks is its exposure to cyclical industries, particularly oil and gas. Downturns in these industries can lead to reduced capital spending and decreased demand for Flowserve's products and services. This cyclicality can create volatility in the company's revenue and earnings, making it difficult to predict its future performance.
Another significant risk is competition. The industrial flow management market is highly competitive, with numerous established players and smaller, specialized firms vying for market share. Flowserve competes on the basis of product performance, reliability, service, and price. Increased competition could put pressure on the company's margins and market share, reducing its profitability.
The company's reliance on key suppliers and customers also poses a risk. Disruptions in the supply chain or the loss of a major customer could negatively impact Flowserve's revenue and earnings. The company's ability to manage its supply chain and maintain strong customer relationships is crucial for mitigating these risks.
Furthermore, Flowserve faces operational risks related to its global operations. These risks include political instability, currency fluctuations, and regulatory changes. Operating in multiple countries exposes the company to a variety of challenges that could disrupt its business and increase its costs.
Finally, the company's debt levels could pose a risk if interest rates rise or if its financial performance deteriorates. Increased interest expense could reduce its profitability and limit its financial flexibility. Therefore, careful management of its debt is essential for maintaining its financial health.
Bulls Say / Bears Say
The Bull Case
BULL VIEWFlowserve's high margins and returns on equity demonstrate superior operational efficiency and profitability compared to its peers, justifying a premium valuation.
BULL VIEWThe company's strong aftermarket services business provides a stable and recurring revenue stream, mitigating the impact of cyclical downturns in its core markets.
BULL VIEWFlowserve's strategic focus on engineered solutions and customized products creates strong customer relationships and switching costs, enhancing its competitive advantage.
The Bear Case
BEAR VIEWFlowserve's negative revenue growth indicates a loss of market share and weakening demand for its products, raising concerns about its long-term prospects.
BEAR VIEWThe company's high EV/EBITDA ratio suggests that the stock is overvalued, particularly in light of its declining revenue and lack of free cash flow data.
BEAR VIEWFlowserve's exposure to cyclical industries, such as oil and gas, makes it vulnerable to economic downturns and reduced capital spending, limiting its growth potential.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score FLS and 4,400+ other equities.
FLOWSERVE CORP exhibits a 288% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
8.0%
Sector: 3.3%
Gross Margin
Pricing power and cost efficiency
82.9%
Sector: 35.8%
Operating Margin
Core business profitability
25.4%
Sector: 6.2%
Net Margin
Bottom-line profitability
26.9%
Sector: 3.9%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield0.00%
Yield Delta—
Income Projection audit
A $10,000 investment would generate approximately $158 annually in dividends at the current trailing rate.
