Correction, 18 September 2026: an earlier version of this post described April 28 as the end of the quarter. It is the date the results were reported.
What changed
$XYL reported results on April 28, 2026. EPS came in at $1.12, up from $1.03 in the same period a year earlier — a year-over-year increase of 8.7%. Quarterly revenue grew 2.7% year over year. We do not have guidance commentary from this report.
The earnings growth outpaced revenue growth by a meaningful margin, which points to some degree of operating leverage or cost discipline working in Xylem's favor over the period. A net margin of 10.8% and an ROE of 8.7% round out the profitability picture. FCF yield stands at 3.2%, and the data flags earnings quality as strong.
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What it means
Despite a solid earnings print, $XYL's ACCE score sits at 47/100 — a middling read. The score breakdown tells the story: Quality leads at 63, Value comes in at 55, Growth lags at 39, and Momentum is the weakest component at 31. The stock has returned -9.2% over the past year, which explains the soft momentum reading.
On valuation, the trailing P/E is 29.8 against a forward P/E of 21.6, suggesting the market expects earnings to step up from here. That said, the 6-model fair value estimate from ACCE sits at $102.37 — roughly 15.0% below the current price of $120.41. At a market cap of $28.46B and an analyst consensus target of $150.35, there is a wide spread between what analysts expect and what the ACCE model framework implies.
The 1.4% dividend yield offers some income while shareholders wait for the valuation gap to resolve in either direction.
The 8.7% EPS growth is a genuine positive, and the quality metrics hold up. But with momentum at 31 and the stock trading above the ACCE fair value estimate, the current score of 47 reflects a stock that is doing reasonably well operationally while carrying a price tag the models view as stretched.
For the current price and full score breakdown, see acceinvestments.com/stocks/XYL.
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