ZWS Should I Buy
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$
0.000
0.000(0.000%)
At close0.000(0.000%)Aft-market
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ZWS is not a good buy right now for an impatient investor. The near-term technical setup is weakening (bearish MACD, RSI below 40 and drifting toward support) and insider selling has surged sharply, while an earnings catalyst is imminent (Feb 3 after hours). Despite solid underlying growth and generally constructive sell-side views, the current timing/risk-reward favors waiting rather than buying immediately.
Price is 46.11 (-0.88%) and sitting just above first support (S1 ~45.74) with the pivot overhead at ~46.73. Momentum is soft: MACD histogram is negative (-0.04) and expanding lower, implying downside momentum is building. RSI(6) at 39.17 is not oversold but is weak, consistent with a short-term down/mean-reversion zone rather than a fresh uptrend. Moving averages are converging, suggesting no strong trend but increased likelihood of a break; given MACD direction, the bias is slightly bearish unless price reclaims the pivot (46.73) and pushes toward 47.71/48.32 resistance. Near-term pattern-based outlook is modest: ~+1.1% over the next week but ~-2.92% over the next month, aligning with a choppy-to-down near-term setup.
Upcoming earnings (2026-02-03 after hours): potential upside catalyst if results/guidance beat.
Business positioning: defensive institutional/commercial plumbing exposure; filtered drinking water adoption tailwind highlighted by Jefferies.
Shareholder-friendly: declared quarterly dividend ($0.11).
Reputation/ESG newsflow: recognition for responsibility and sustainable growth may support long-only demand at the margin.
Insider activity: insiders are selling, with selling amount up ~1710% over the last month—clear negative sentiment signal.
Technical momentum deterioration: negative/expanding MACD and weak RSI increase odds of a support test near 45.74/45.
Earnings event risk: with elevated implied volatility vs historical, the stock can gap; not ideal for an impatient buyer seeking immediate upside.
Profitability trend to monitor: gross margin declined YoY, which can pressure the multiple if it persists.
Latest reported quarter: 2025/Q3. Revenue grew to $455.4M (+11.07% YoY). Net income rose to $61.8M (+42.07% YoY) and EPS increased to $0.36 (+44.00% YoY), indicating strong operating leverage. However, gross margin fell to 40.84% (-4.11% YoY), a notable blemish—growth is strong, but margin durability is the key question into upcoming results.
Recent sell-side trend: coverage is constructive but mixed. Jefferies initiated Buy with a $58 target (bull case: filtered drinking water adoption, resilient demand, capital deployment upside). RBC initiated Sector Perform with a $49 target (acknowledges category leadership/defensive end markets but questions continued growth and margin expansion). Wall Street pros: strong growth profile, defensive end markets, secular tailwinds in filtered water, potential capital deployment upside. Cons: margin expansion uncertainty (also echoed by RBC) and recent heavy insider selling undermines confidence near-term.
