American States Water (AWR) AI Stock Analysis

• Market Cap: $2.83B
• Dividend Yield: 2.64%
• Average Volume (3M): 266.62K
• Price to Earnings (P/E): 21.4
• Beta (1Y): -0.01
• Revenue Growth: 10.28%
• EPS Growth: 13.56%
• Country: US
• Employees: 517
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.74
• Shares Outstanding: 39,082,470
• 10 Day Avg. Volume: 306,626
• 30 Day Avg. Volume: 266,621
• PEG Ratio: 3.40
• Price to Book (P/B): 2.67
• Price to Sales (P/S): 4.25
• P/FCF Ratio: -393.98
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 5.70
• Enterprise Value/Gross Profit: 8.99
• Enterprise Value/Ebitda: 14.89
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): 3.48
• Revenue Forecast (FY): $664.00M

• Rating: 59 Neutral
• Price Target: $76.00 ▲(4.77% Upside)
• Action: Reiterated Date: 03/21/26
• Date: Action: Reiterated 03/21/26

The score is primarily constrained by weak cash-flow quality (persistent negative free cash flow and a particularly concerning 2025 cash flow profile) and reduced transparency from inconsistent 2025 financial fields. Valuation is moderately supportive due to a reasonable utility P/E and a ~2.7% dividend yield, but technicals remain soft with the stock trading below key moving averages.

Positive Factors

Regulated utility business model

AWR's regulated water and electric franchises provide predictable, cost‑recovery revenue mechanisms and an allowed return on rate base. This structural regulatory framework supports steady earnings and capital recovery over multi‑year horizons, reducing business-cycle volatility for core utilities.

Multi-year revenue growth and healthy margins

Sustained top‑line expansion with consistently robust net margins indicates durable demand and disciplined cost management across regulated and contract segments. Continued revenue and margin strength support long‑term earnings stability and provide capacity to fund reinvestment and dividends.

Historically manageable leverage and solid ROE

Pre‑2025 leverage levels are typical for utilities and combined with mid‑teens ROE demonstrate the company has historically balanced growth and capital structure effectively, supporting creditworthiness and the ability to finance regulated capital projects without excessive strain.

Negative Factors

Persistent negative free cash flow

Consistent negative free cash flow signals structural pressure from capex needs exceeding internal cash generation. Over time this elevates reliance on external financing or equity, raises refinancing risk, and can constrain funding for growth, dividends, or unexpected costs if not addressed.

Unusual 2025 balance-sheet shift reduces transparency

The abrupt 2025 change in capital structure creates uncertainty about true leverage and funding sources. This hampers reliable assessment of financial flexibility and makes planning for capex and rate‑base growth riskier until the shift is clearly explained or audited.

Earnings exposed to regulatory, supply, and contract risks

AWR's performance depends on favorable rate cases, successful capex execution, stable water supplies, and contract renewals. These structural dependencies create multi‑period variability in allowed returns, recovery timing and cash flows, raising execution and regulatory risk to long‑term earnings sustainability.

American States Water Business Overview & Revenue Model

Company Description

American States Water Company, through its subsidiaries, provides water and electric services to residential, commercial, industrial, and other customers in the United States. It operates through three segments: Water, Electric, and Contracted Services. The company purchases, produces, distributes, and sells water, as well as distributes electricity. As of December 31, 2021, American States Water Company provided water service to 262,770 customers located throughout 10 counties in the State of California; and distributed electricity to 24,656 customers in San Bernardino County mountain communities in California. The company also provides water and/or wastewater services, including the operation, maintenance, and construction of facilities at the water and/or wastewater systems at various military installations. American States Water Company was incorporated in 1929 and is based in San Dimas, California.

How the Company Makes Money

AWR makes money primarily through two models: regulated utility revenue and contracted service revenue. (1) Regulated utilities: Its water and electric subsidiaries earn revenue by delivering water/wastewater service and electric distribution service to customers within authorized service territories. Rates are set through regulatory processes (e.g., California regulation), which generally allow the utility to recover prudently incurred operating costs (such as labor, power, treatment, maintenance, and purchased water), depreciation, taxes, and an allowed return on invested capital used to provide service. As a result, earnings are driven by the size of the regulated rate base (utility plant and infrastructure invested to serve customers), authorized returns, customer usage/volumes (to the extent not decoupled), and the timing and outcomes of rate cases and other regulatory approvals. (2) Contracted services: Through its contracted services subsidiary, AWR generates revenue from operating, maintaining, and/or constructing water and wastewater (and related utility) systems primarily under U.S. government contracts at military installations. Under this model, revenue is earned based on the terms of each contract (e.g., fixed-price and/or cost-reimbursable elements, and performance incentives where applicable), with profitability dependent on winning/renewing contracts, meeting performance requirements, controlling operating and construction costs, and the volume of work performed. Significant factors affecting earnings include regulatory decisions for the utility segments, capital investment execution (which can expand rate base), water supply conditions and conservation impacts, and the award/renewal and performance of long-term government contracts.

American States Water Financial Statement Overview

Summary

Profitability is solid for a regulated utility and revenue is higher over the multi-year period, but cash flow is a major weakness with consistently negative free cash flow (including a very weak 2025 profile). Balance-sheet leverage appears historically manageable, yet unusual 2025 shifts and some incomplete fields reduce confidence in comparability.

Income Statement

Revenue has grown over the period (about $488M in 2020 to $658M in 2025), with solid profitability for a regulated utility. Net margins are consistently strong (~16%–21%) and 2025 net margin remains healthy (~19.8%). The main weakness is uneven top-line momentum (flat in 2024 and slightly down in 2022) and some inconsistencies in 2025 line items (e.g., gross profit/EBIT margin fields appear incomplete), which reduces confidence in year-to-year comparability.

Balance Sheet

Leverage looks mixed: debt-to-equity ran around ~0.9–1.18 from 2020–2024 (typical but meaningful for utilities), then appears to drop sharply in 2025 (to ~0.12) alongside a large jump in equity—an unusual shift that suggests either major deleveraging or data inconsistency. Returns on equity are generally solid (~11%–16%), supporting balance-sheet quality, but the variability in reported debt levels and capital structure from 2024 to 2025 introduces added risk/uncertainty in assessing true leverage.

Cash Flow

Cash generation is the clearest weak spot. Free cash flow is negative every year shown (ranging from slightly negative in 2020 to deeply negative in 2023 and 2025), indicating ongoing heavy investment needs relative to operating inflows. Operating cash flow is positive in most years but was modest versus earnings at times, and 2025 shows operating cash flow as zero with very negative free cash flow, which is a major red flag from a funding and sustainability standpoint (even allowing for utilities’ capex-heavy profiles).

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	658.07M	595.46M	595.70M	491.53M	498.85M
Gross Profit	334.09M	452.02M	449.55M	368.23M	377.82M
EBITDA	252.15M	244.05M	252.54M	170.78M	187.58M
Net Income	130.44M	119.27M	124.92M	78.40M	94.35M
Balance Sheet
Total Assets	2.72B	2.50B	2.25B	2.03B	1.90B
Cash, Cash Equivalents and Short-Term Investments	18.82M	26.66M	14.07M	6.00M	4.96M
Total Debt	942.78M	938.24M	917.88M	734.43M	629.02M
Total Liabilities	1.67B	1.58B	1.47B	1.32B	1.22B
Stockholders Equity	1.05B	920.05M	776.11M	709.55M	685.95M
Cash Flow
Free Cash Flow	-7.09M	-33.23M	-120.86M	-48.44M	-28.93M
Operating Cash Flow	229.73M	198.73M	67.68M	117.80M	115.58M
Investing Cash Flow	-237.54M	-232.78M	-188.76M	-167.10M	-145.09M
Financing Cash Flow	-26.00K	46.64M	129.16M	50.34M	-2.27M

American States Water Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 72.54
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWR, the sentiment is Negative. The current price of 72.54 is below the 20-day moving average (MA) of 74.44, below the 50-day MA of 73.40, and below the 200-day MA of 73.36, indicating a bearish trend. The MACD of <0.01 indicates Positive momentum. The RSI at 43.26 is Neutral, neither overbought nor oversold. The STOCH value of 14.52 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for AWR.

American States Water Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARTNA	67 Neutral	$318.90M	14.28	9.26%	3.87%	5.80%	12.33%
MSEX	67 Neutral	$929.25M	26.96	9.08%	2.67%	6.24%	3.35%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
AWR	59 Neutral	$2.83B	21.42	13.10%	2.64%	10.28%	13.56%
CWT	58 Neutral	$2.62B	20.13	7.68%	2.88%	-2.60%	-33.78%
YORW	58 Neutral	$431.58M	22.20	8.49%	2.68%	3.63%	-5.82%
GWRS	54 Neutral	$215.10M	77.24	3.58%	3.56%	7.06%	-38.94%

American States Water Corporate Events

American States Water Clarifies Recent Stock Transaction Terms

American States Water Company disclosed in its February 27, 2024, Current Report on Form 8-K that a referenced transaction involving its common stock is not intended as an offer to sell or a solicitation to buy the securities. The filing clarifies that no such offer, solicitation, or sale will occur in any jurisdiction where it would be unlawful prior to proper registration or qualification under applicable state securities laws.

The most recent analyst rating on (AWR) stock is a Buy with a $81.00 price target. To see the full list of analyst forecasts on American States Water stock, see the AWR Stock Forecast page.