Xylem’s Sales and Cash Flow Gains Face an Organic Growth Test

Xylem’s shares fell 16.4% over six months to $102.38, while the S&P 500 rose 16.6%, according to StockStory. As of Thursday afternoon, the stock traded at $98.655, down 2.58% since the previous close.

StockStory pointed to Xylem’s revenue growth as a strength. Sales increased at an 11.9% compound annual rate over the past five years, outpacing the average industrial company, the publisher said.

The analysis also noted that Xylem’s free cash flow margin rose 7.8 percentage points over five years. The margin was 10.5% for the 12 months through the latest reporting period, according to StockStory.

A concern in the analysis was slower organic revenue growth, which excludes the effects of acquisitions, divestitures and currency fluctuations. Xylem’s organic revenue grew an average of 4.4% year over year over the past two years, StockStory said.

StockStory reported that the shares traded at 17.2 times forward earnings at $102.38. The publisher’s assessment was that Xylem’s strengths outweighed its drawbacks, while flagging the need to improve organic growth.