American States Water (AWR) AI Stock Analysis

• Market Cap: $3.02B
• Dividend Yield: 2.64%
• Average Volume (3M): 251.14K
• Price to Earnings (P/E): 21.4
• Beta (1Y): -0.03
• 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: 268,082
• 30 Day Avg. Volume: 251,137
• 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: 1.31
• Enterprise Value/Revenue: 5.99
• Enterprise Value/Gross Profit: 9.43
• Enterprise Value/Ebitda: 15.62
• 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: 62 Neutral
• Price Target: $78.00 ▲(7.53% Upside)
• Action: Downgraded Date: 02/19/26
• Date: Action: Downgraded 02/19/26

The score is held back mainly by weak cash flow quality (consistently negative free cash flow, with an especially concerning 2025 cash flow profile) and some 2025 reporting/visibility issues. Offsetting this are stable utility-like profitability, a supportive dividend, and a generally positive earnings-call backdrop with EPS growth and contracted-services awards, while technicals look neutral-to-slightly positive but not strongly trending.

Positive Factors

Consistent regulated profitability

AWR’s regulated water and electric businesses deliver steady net margins in the high-teens, reflecting stable rate-setting and predictable cost recovery. Durable margin profile supports long-term earnings resilience and underpins ability to fund infrastructure and maintain service levels over multiple rate cycles.

ASUS contracted services backlog

The ASUS contract awards create a multi-year construction backlog and a non-utility revenue stream that complements regulated returns. Contracted projects (through 2028) diversify cash flow sources, support utilization of internal construction capabilities, and provide incremental, foreseeable EPS contribution beyond tariff-driven utility income.

Growing dividend and ESG recognition

Consistent dividend growth and external sustainability recognition signal conservative capital allocation and management confidence in regulated cash flows. A committed, growing payout policy plus ESG credentials strengthen stakeholder trust and can ease regulatory relations over time, supporting franchise value and investor appeal.

Negative Factors

Persistently negative free cash flow

Ongoing negative FCF and a 2025 operating cash flow shortfall indicate capex needs outpacing operating inflows. Over months this raises funding risk, could increase reliance on external financing or equity, constrain discretionary spending and pressure the durability of dividends if capital demands remain elevated.

Balance-sheet reporting variability

A sudden reported drop in leverage and large equity increase in 2025 creates uncertainty about true financial flexibility. If this reflects data inconsistency or one-time adjustments, it impairs clear assessment of covenant headroom, refinancing risk and ability to fund ongoing capex without altering capital structure or cost of capital.

Regulatory mechanism change risk

Changes to rate-setting mechanisms can materially affect timing and stability of revenue recovery and supply-cost pass-through. Structural shifts in regulatory treatment increase earnings volatility risk, complicate long-range cash flow forecasting and could alter allowed returns or recovery of invested capital over regulatory cycles.

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

American States Water generates revenue primarily through regulated water and electric services. The majority of its income comes from the sale of water to residential, commercial, and industrial customers, with rates set by state regulatory bodies to ensure fair pricing and adequate service provision. Additionally, the company earns revenue from its electric utility services, which also operate under regulatory frameworks. AWR benefits from infrastructure investments, system improvements, and cost management strategies that help maintain operational efficiency. The company may also engage in partnerships with local governments and other entities for infrastructure projects, further supporting its revenue growth. Overall, regulated pricing structures and a stable demand for essential utility services underpin American States Water's revenue model.

American States Water Financial Statement Overview

Summary

Profitability is steady for a regulated utility (net margins ~16%–21% with 2025 near ~19.8%) and revenue is higher over the long run. However, persistent negative free cash flow across all years (with 2025 showing operating cash flow as zero and very negative FCF) is a major funding-risk signal, and unusual 2025 balance-sheet shifts plus incomplete 2025 margin 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: Positive
• Last Price: 72.54
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For AWR, the sentiment is Positive. The current price of 72.54 is below the 20-day moving average (MA) of 72.78, below the 50-day MA of 72.88, and below the 200-day MA of 73.53, indicating a bullish trend. The MACD of 0.69 indicates Negative momentum. The RSI at 66.15 is Neutral, neither overbought nor oversold. The STOCH value of 80.63 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for AWR.

American States Water Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARTNA	70 Outperform	$354.58M	12.07	9.25%	3.87%	5.80%	12.33%
MSEX	67 Neutral	$1.03B	26.96	9.09%	2.67%	6.24%	3.35%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
AWR	62 Neutral	$3.02B	21.42	13.22%	2.64%	10.28%	13.56%
CWT	61 Neutral	$2.80B	20.13	7.71%	2.88%	-2.60%	-33.78%
YORW	58 Neutral	$479.88M	22.88	8.58%	2.68%	3.63%	-5.82%
GWRS	57 Neutral	$258.75M	77.24	6.30%	3.56%	7.06%	-38.94%

American States Water Corporate Events

California Commission Defers Capital Application for AWR

On November 18, 2025, the California Public Utilities Commission approved a request to defer the cost of capital application for American States Water Company’s subsidiary, Golden State Water Company, by one year. This postpones the filing date to May 1, 2027, with the current Water Cost of Capital Mechanism remaining in place during the deferral period. The authorized rate of return on rate base, including a return on equity of 10.06%, will continue through December 31, 2027. This decision allows the company to maintain its financial stability and operational consistency, benefiting stakeholders by providing a predictable financial environment.

The most recent analyst rating on (AWR) stock is a Buy with a $84.00 price target. To see the full list of analyst forecasts on American States Water stock, see the AWR Stock Forecast page.

American States Water Defers Cost of Capital Filing

On November 18, 2025, the California Public Utilities Commission approved American States Water Company’s request to defer the cost of capital application for its subsidiary, Golden State Water Company, by one year, moving the filing date to May 1, 2027, with an effective date of January 1, 2028. This decision allows the current Water Cost of Capital Mechanism and a 7.93% authorized rate of return to remain in effect through December 31, 2027, impacting the company’s financial planning and stability.

The most recent analyst rating on (AWR) stock is a Buy with a $84.00 price target. To see the full list of analyst forecasts on American States Water stock, see the AWR Stock Forecast page.