Xylem falls 14.2% after quarterly revenue and EPS miss and lowered guidance

Session of October 27, 2026 · Published October 28, 2026 · 3 min read

What happened

Xylem (XYL) fell 14.2% on October 27, 2026, because a third-quarter report missed revenue and adjusted EPS expectations and the company trimmed 2026 guidance. The company reported earnings per share of $1.44 against $1.45 expected, 0.7% below estimates, and said revenue came in about $80 million below consensus, according to Seeking Alpha and Zacks Investment Research. Separately, a law firm announced an investigation into potential securities law violations after the miss, according to PRNewsWire.

Closing price over the last 30 trading sessions. On October 27, 2026, XYL closed at $92.86, down 14.2% on the day and 13.4% lower than 30 sessions earlier.

How big was the move

The stock closed at $92.86 and opened 5.8% below the previous close, trading 4.6 times its 20-day average volume. The move was 5.8 times a typical daily move for this stock, while the S&P 500 rose 0.6% on the day and the Industrials sector median rose 1.3%, making Xylem’s loss 15.6 percentage points worse than the sector median. Over the last five sessions the stock fell 11.6%, compared with a five-session S&P 500 rise of 0.1%.

Each bar is one day's price change; the outlined bar is October 27, 2026. A typical daily move over the past year was 1.6%, so the latest move equals 8.9 times that. Moves outside the dashed lines (about 3.2%) are unusual.

The technical picture

The stock traded well below its key moving averages, at 10.1% below its 20-day moving average, 12.8% below its 50-day moving average and 21.3% below its 200-day moving average. The 50-day average is below the 200-day average, a sign of a weak longer-term trend, and the Relative Strength Index (14 days) sits at 28, below 30, a level often called oversold. Xylem is 39.8% below its 52-week high and over one year it fell 37.4%, trailing the S&P 500 by 51.1 percentage points. Volatility is elevated at 39% annualized over 60 days, higher than 97% of its own readings over five years.

Closing price over the past year. XYL ends the period 39.3% below its 52-week high, below its 50-day average ($106.47) and below its 200-day average ($118.04).

Fundamentals and valuation

For the four quarters through September 30, 2026, Xylem reported revenue of $6.86 billion, a decline of 22.9% from a year earlier, while diluted earnings per share were $4.52, a rise of 16.2% from a year earlier. Gross margin improved to 39.3% from 38.2% a year earlier, and operating margin rose to 14.4% from 12.8%. Free-cash-flow margin stood at 6.7% and return on invested capital was 6.9%. On the balance sheet, net debt was 1.5 times EBITDA, and the share count decreased by 4.5% over one year.

Quarterly revenue by period end. The latest quarter brought $0.00, 100.0% less than the same quarter a year earlier.

Valuation metrics show the stock at 20.5 times trailing earnings and 16.4 times expected forward earnings, with a free-cash-flow yield of 1.8%. The price to trailing earnings is lower than 95% of its own readings over the past five years, where the five-year median was 38.7 times earnings. Those figures suggest the market is assigning a much lower earnings multiple to Xylem than it has historically, even as some margins improved year over year.

Earnings and analyst expectations

Xylem reported third-quarter results on October 27, 2026, with reported EPS of $1.44 versus the Zacks Consensus Estimate of $1.47 and revenue about $80 million below estimates, according to Seeking Alpha and Zacks Investment Research. The company cited weakness in metering and project timing and reduced its 2026 revenue and EPS guidance. The report left the stock with zero consecutive quarters beating estimates; the average surprise over the last four reports was 3.0% above estimates, and the typical two-day reaction after recent reports was a fall of 0.5%. The next report is scheduled for February 9, 2027.

Diluted earnings per share by quarter. The latest quarter shows $1.25, against $0.93 in the same quarter a year earlier.

Analysts’ consensus price target stands at $144.25 from 40 analysts, 55.3% above the closing price, and the consensus rating is Hold with 45% of analysts at Buy or Strong Buy. Investors will be watching whether analysts revise forecasts and targets after the company cut guidance and highlighted metering and project timing as headwinds.

What to watch

February 9, 2027: next scheduled earnings report.
Consensus price target of $144.25, 55.3% above the closing price, from 40 analysts.
A law firm investigation announced by PRNewsWire into potential securities law violations after the October 27, 2026, report.
Guidance revisions the company issues following the third-quarter update and any commentary on metering and project timing.
Shareholder metrics: share count decreased by 4.5% over one year and net debt of 1.5 times EBITDA.

Full XYL analysis: scores, chart and financials →