The company's returns on capital haven't increased but it is reinvesting in the business. Given the underlying trends, it's unlikely to be a multi-bagger going forward.

Analysts justify Energy Recovery's high P/E ratio with its superior earnings outlook. Shareholders' confidence in the company's future earnings and promising future supports the share price.

Diminishing ROCE at Energy Recovery raises concern, although reinvestment could spur future growth. Despite falling returns, stock prices have surged, indicating investor optimism. But continuing trends throw doubt on its future multi-bagger potential.

Energy Recovery stock seems undervalued considering intrinsic value and high growth potential. Its future outlook isn't fully reflected in the current share price, though investors should consider all relevant factors before deciding.

Energy Recovery's ROE fall and net income decrease over five years is expected due to the low return rate and high profit retention rate limiting earnings growth. Analysts forecast future earnings growth, but withholding dividends despite inability to grow the business indicates other growth-hampering factors.