American Water (AWK) AI Stock Analysis

• Market Cap: $25.90B
• Dividend Yield: 2.51%
• Average Volume (3M): 2.15M
• Price to Earnings (P/E): 23.3
• Beta (1Y): -0.24
• Revenue Growth: 12.29%
• EPS Growth: 13.13%
• Country: US
• Employees: 6,700
• Sector: N/A
• Sector Strength: N/A
• Industry: Regulated Water
• EPS (TTM): 1.94
• Shares Outstanding: 195,123,570
• 10 Day Avg. Volume: 2,291,183
• 30 Day Avg. Volume: 2,152,590
• PEG Ratio: 2.26
• Price to Book (P/B): 2.35
• Price to Sales (P/S): 5.18
• P/FCF Ratio: -29.93
• Enterprise Value/Market Cap: 1.63
• Enterprise Value/Revenue: 8.34
• Enterprise Value/Gross Profit: 13.72
• Enterprise Value/Ebitda: 14.56
• 1Y Price Target: $136.17
• Price Target Upside: 2.60% Upside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 6
• EPS Forecast (FY): 5.73
• Revenue Forecast (FY): $5.03B

• Rating: 64 Neutral
• Price Target: $137.00 ▲(3.22% Upside)

American Water's overall stock score reflects a mix of stable financial performance and positive corporate events, offset by weak technical indicators and a high valuation. The merger with Essential Utilities is a key positive factor, expected to drive future growth and operational efficiency. However, the bearish technical signals and high P/E ratio suggest caution in the short term.

American Water Business Overview & Revenue Model

Company Description

American Water Works Company, Inc., through its subsidiaries, provides water and wastewater services in the United States. It offers water and wastewater services to approximately 1,700 communities in 14 states serving approximately 3.4 million active customers. The company serves residential customers; commercial customers, including food and beverage providers, commercial property developers and proprietors, and energy suppliers; fire service and private fire customers; industrial customers, such as large-scale manufacturers, mining, and production operations; public authorities comprising government buildings and other public sector facilities, such as schools and universities; and other utilities and community water and wastewater systems. It also provides water and wastewater services on various military installations; and undertakes contracts with municipal customers, primarily to operate and manage water and wastewater facilities, as well as offers other related services. In addition, the company operates approximately 80 surface water treatment plants; 480 groundwater treatment plants; 160 wastewater treatment plants; 52,500 miles of transmission, distribution, and collection mains and pipes; 1,100 groundwater wells; 1,700 water and wastewater pumping stations; 1,300 treated water storage facilities; and 76 dams. It serves approximately 14 million people with drinking water, wastewater, and other related services in 24 states. American Water Works Company, Inc. was founded in 1886 and is headquartered in Camden, New Jersey.

How the Company Makes Money

American Water generates revenue primarily through its Regulated Utilities segment, where it charges customers for water and wastewater services based on usage rates set by state regulatory agencies. The company also earns revenue from fixed fees and service charges. In its Market-Based Operations segment, American Water provides specialized services such as water system management and consulting for municipalities and industries, contributing additional revenue. The company benefits from significant partnerships with local governments and other entities, which often lead to long-term contracts and stable cash flows. Regulatory frameworks that allow for rate adjustments also play a critical role in maximizing revenue, as they enable the company to recover costs and provide returns to investors.

American Water Financial Statement Overview

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Gross Profit
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Balance Sheet
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Cash, Cash Equivalents and Short-Term Investments
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American Water Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 132.72
• 50DMA: Negative
• 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 AWK, the sentiment is Positive. The current price of 132.72 is above the 20-day moving average (MA) of 130.23, below the 50-day MA of 133.30, and below the 200-day MA of 138.62, indicating a neutral trend. The MACD of -0.14 indicates Negative momentum. The RSI at 54.67 is Neutral, neither overbought nor oversold. The STOCH value of 76.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AWK.

American Water Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	―	―	―	―	―	―	―
SBS	71 Outperform	$16.56B	13.16	16.99%	2.23%	-10.23%	-26.87%
AWR	70 Outperform	$2.85B	21.85	13.73%	2.63%	10.28%	13.56%
WTRG	66 Neutral	$10.84B	15.89	10.29%	3.43%	21.35%	20.96%
CWT	65 Neutral	$2.62B	19.19	8.19%	2.82%	-2.60%	-33.78%
AWK	64 Neutral	$25.90B	23.27	10.46%	2.51%	12.29%	13.13%
MSEX	55 Neutral	$976.49M	22.35	9.27%	2.59%	6.24%	3.35%

American Water Corporate Events

American Water Seeks Rate Hike for Infrastructure Upgrades

On November 14, 2025, Pennsylvania American Water filed a rate request with the Pennsylvania Public Utility Commission to support $1.2 billion in ongoing investments in water and wastewater infrastructure. The request, if approved, would increase rates for residential customers to fund critical upgrades, including replacing aging water and sewer mains and addressing contaminants like PFAS. The proposal also includes a summer wastewater billing adjustment and a pilot assistance program for low-income renters, reflecting the company’s commitment to affordability and service improvement. The new rates, pending approval, are expected to take effect in August 2026.

American Water Seeks Rate Adjustment in Virginia

On November 3, 2025, Virginia American Water filed a request with the Virginia State Corporation Commission to adjust its water and wastewater rates, seeking an annual revenue increase of $21.9 million. This request is driven by over $115 million in capital investments aimed at infrastructure improvements, including updates to water treatment plants and replacement of aging pipelines, reinforcing the company’s commitment to providing high-quality service. Interim rates are expected to take effect on May 1, 2026, with the final rates subject to approval and potential refund to customers. The rate review process allows for customer involvement through comments and public hearings.

American Water Reports Strong Q3 Earnings Growth

On October 29, 2025, American Water reported strong third-quarter earnings of $1.94 per share, up from $1.80 per share in 2024, and affirmed its 2025 earnings per share guidance. The company also initiated its 2026 earnings guidance, reflecting an 8% growth, and announced a merger with Essential Utilities expected to close by Q1 2027. The merger aims to enhance the company’s scale and growth potential, benefiting stakeholders by combining complementary businesses. Additionally, American Water outlined its capital investment plans through 2035 and maintained its long-term growth targets.

American Water Announces Merger with Essential Utilities

On October 26, 2025, American Water Works Company, Inc. and Essential Utilities, Inc. announced an Agreement and Plan of Merger, which will see Essential become a wholly owned subsidiary of American Water. This strategic merger, approved by both companies’ boards, aims to enhance operational efficiency and expand customer service capabilities, with a combined market capitalization of approximately $40 billion. The merger is expected to be accretive to American Water’s earnings per share in the first year and maintain long-term growth targets. The merger will also provide greater long-term growth opportunities for employees and strengthen commitments to community and water affordability.