California Water Service (CWT) AI Stock Analysis

• Market Cap: $2.70B
• Dividend Yield: 2.51%
• Average Volume (3M): 380.13K
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.57
• Revenue Growth: 30.48%
• EPS Growth: 267.73%
• Country: US
• Employees: 1,266
• Sector: Utilities
• Sector Strength: 79
• Industry: Regulated Utilities
• EPS (TTM): 3.26
• Shares Outstanding: 59,488,445
• 10 Day Avg. Volume: 375,675
• 30 Day Avg. Volume: 380,128
• PEG Ratio: 0.05
• Price to Book (P/B): N/A
• Price to Sales (P/S): 2.63
• Price to Cash Flow (P/CF): 6.60
• P/FCF Ratio: 0.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $56.33
• Price Target Upside: 20.96% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

California Water Service's stock is rated positively due to its strong financial performance, marked by significant revenue growth and effective cash flow management. The technical indicators suggest potential for upward movement, while the valuation is attractive with a reasonable P/E ratio and strong dividend yield. The earnings call further supports a positive outlook with significant growth and expansion plans, despite some quarterly challenges.

California Water Service Business Overview & Revenue Model

Company Description

California Water Service (CWT), also known as Cal Water, is a publicly traded utility company that provides water services to residential, commercial, and industrial customers. Operating primarily in California, the company is one of the largest regulated water utilities in the United States. Cal Water focuses on delivering high-quality water and wastewater services across its service territories, ensuring sustainable water management and customer satisfaction.

How the Company Makes Money

California Water Service makes money through the provision of regulated water utility services. The company generates revenue primarily from water usage charges billed to residential, commercial, and industrial customers. These charges are regulated by state public utility commissions, which approve rates that allow the company to recover costs and earn a reasonable return on investments in infrastructure. Additional revenue streams include wastewater services and other fees for services such as water connections, late payments, and infrastructure maintenance. The company may also engage in partnerships or programs to promote water conservation and efficiency, potentially receiving incentives or funding for such initiatives from government or environmental organizations.

California Water Service Financial Statement Overview

Summary

California Water Service demonstrates strong financial performance with impressive revenue growth and solid profitability. The income statement shows significant revenue growth of 30.4% and high profit margins. The balance sheet is stable with moderate leverage, and cash flow management has improved dramatically, turning positive after overcoming challenges.

Income Statement

California Water Service shows strong financial performance with a significant improvement in revenue and profitability. The gross profit margin is high at approximately 95.4%, and the net profit margin is robust at about 18.4%. The company has experienced substantial revenue growth of 30.4% over the past year, indicating effective business operations and market demand. EBIT and EBITDA margins also showcase effective cost management and operational efficiency.

Balance Sheet

The balance sheet is stable with a debt-to-equity ratio of 0.44, indicating a moderate level of leverage which is manageable. The return on equity is strong at 11.6%, reflecting efficient use of equity capital to generate profits. The equity ratio stands at 31.6%, which is healthy, but there's room for improvement in strengthening equity further to enhance financial stability.

Cash Flow

Cash flow analysis reveals positive trends, with a remarkable improvement in free cash flow from negative to positive, suggesting better cash management. The operating cash flow to net income ratio is 1.52, indicating strong cash flow generation relative to profits. However, the free cash flow to net income ratio reflects the impact of capital expenditures on cash generation, which could be optimized further.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement		Total Revenue
1.04B	794.63M	846.43M	790.91M	794.31M
	Gross Profit
989.12M	363.38M	529.45M	483.84M	489.55M
	EBIT
225.05M	77.14M	127.66M	126.17M	136.67M
	EBITDA
419.34M	217.54M	262.72M	250.83M	244.00M
	Net Income Common Stockholders
190.81M	51.91M	96.01M	101.13M	96.83M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
50.12M	39.59M	62.10M	78.38M	44.55M
	Total Assets
5.18B	4.60B	3.85B	3.62B	3.39B
	Total Debt
72.42M	1.25B	1.13B	1.10B	1.16B
	Net Debt
22.30M	1.21B	1.06B	1.02B	1.11B
	Total Liabilities
3.54B	3.17B	2.53B	2.44B	2.47B
	Stockholders Equity
1.64B	1.43B	1.32B	1.18B	921.34M
Cash Flow		Free Cash Flow
290.87M	-165.93M	-83.98M	-61.48M	-180.73M
	Operating Cash Flow
290.87M	217.82M	243.77M	231.72M	117.92M
	Investing Cash Flow
-474.87M	-389.42M	-335.52M	-300.87M	-346.07M
	Financing Cash Flow
194.72M	171.54M	96.12M	104.68M	229.98M

California Water Service Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 46.57
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWT, the sentiment is Positive. The current price of 46.57 is above the 20-day moving average (MA) of 45.31, above the 50-day MA of 44.66, and below the 200-day MA of 49.34, indicating a neutral trend. The MACD of 0.39 indicates Negative momentum. The RSI at 57.84 is Neutral, neither overbought nor oversold. The STOCH value of 66.05 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWT.

California Water Service Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SJW	77 Outperform	$1.83B	19.00	6.87%	2.98%	11.65%	6.78%
CWT	75 Outperform	$2.70B	13.97	11.65%	2.51%	30.48%	267.73%
AWR	73 Outperform	$2.96B	24.50	12.96%	2.34%	-0.04%	-5.82%
WTRG	71 Outperform	$10.44B	17.51	9.60%	3.28%	1.57%	16.50%
ARTNA	68 Neutral	$320.79M	15.98	8.40%	3.72%	6.25%	23.77%
Sector *	65 Neutral	$12.05B	15.92	6.71%	4.32%	8.04%	3.76%
YORW	61 Neutral	$460.69M	21.68	8.79%	2.57%	9.03%	-7.20%

California Water Service Corporate Events

California Water Service Granted Extension on Capital Filing

On January 14, 2025, the California Public Utilities Commission granted California Water Service Company and three other Class A water companies a one-year extension on their cost of capital filing deadline to May 1, 2026. This decision allows the Water Cost of Capital Mechanisms to remain in effect during the extension, impacting operational planning and financial strategies for the involved companies.