American States Water (AWR) AI Stock Analysis

• Market Cap: $2.94B
• Dividend Yield: 2.48%
• Average Volume (3M): 284.22K
• Price to Earnings (P/E): 23.5
• Beta (1Y): 0.09
• Revenue Growth: 8.55%
• EPS Growth: 13.57%
• Country: US
• Employees: 517
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.87
• Shares Outstanding: 38,509,037
• 10 Day Avg. Volume: 259,634
• 30 Day Avg. Volume: 284,216
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.33
• Enterprise Value/Revenue: 6.32
• Enterprise Value/Gross Profit: 9.20
• Enterprise Value/Ebitda: 15.53
• 1Y Price Target: $72.00
• Price Target Upside: -5.56% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1

• Rating: 71 Outperform
• Price Target: $83.00 ▲(8.87% Upside)

American States Water's strong earnings call and positive technical indicators drive the overall score. Financial performance is solid but tempered by cash flow concerns and rising debt levels. Valuation is moderate, with a reasonable P/E ratio and attractive dividend yield.

Positive Factors

Revenue Growth

The increase in revenue indicates a strong market position and effective pricing strategies, which are critical for long-term growth and stability in the regulated utility sector.

Dividend Increase

The significant dividend increase reflects management's confidence in sustainable earnings growth, enhancing shareholder value and indicating robust cash flow generation.

Infrastructure Investment

Continued investment in infrastructure supports long-term operational efficiency and service reliability, crucial for maintaining competitive advantage in the utility industry.

Negative Factors

Rising Debt Levels

While the debt-to-equity ratio is balanced, rising debt levels could strain financial flexibility and cash flow, posing risks to long-term financial health if not managed carefully.

Negative Free Cash Flow

Negative free cash flow highlights potential issues with cash management or capital expenditure, which could impact the company's ability to fund operations and growth initiatives.

Potential Revenue Volatility

The absence of a full revenue decoupling mechanism could lead to revenue and earnings volatility, affecting financial predictability and stability in the regulated utility market.

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 the provision of water and electric utility services. Its core revenue stream comes from water sales to residential, commercial, and industrial customers, which is regulated by state public utility commissions. The company sets rates based on the cost of service, including investments in infrastructure, maintenance, and operational expenses. Additionally, AWR earns revenue from electric utility services, where it charges customers based on electricity consumption. The company also benefits from various partnerships and regulatory frameworks that allow for stable revenue generation, including infrastructure projects that may receive governmental support or funding. Furthermore, AWR may engage in capital investments that lead to rate base increases, further enhancing its revenue potential.

American States Water Financial Statement Overview

Summary

American States Water demonstrates strong profitability and operational efficiency, with stable revenue growth and healthy margins. However, rising debt levels and negative free cash flow highlight areas of concern in financial management.

Income Statement

American States Water shows a stable revenue growth with a TTM increase of 1.27%. The gross profit margin remains strong at 68.70% TTM, although it has decreased from previous years. Net profit margin is healthy at 20.24% TTM, indicating efficient cost management. EBIT and EBITDA margins are robust, reflecting good operational efficiency. However, the slight decline in gross profit margin suggests potential cost pressures.

Balance Sheet

The company's debt-to-equity ratio is nearly 1, indicating a balanced approach to leveraging. Return on equity is solid at 13.37% TTM, showcasing effective use of equity to generate profits. The equity ratio is stable, suggesting a sound financial structure. However, the increasing debt levels over the years could pose future risks if not managed carefully.

Cash Flow

Operating cash flow is strong, with a coverage ratio of 1.47 TTM, indicating good cash generation relative to net income. However, free cash flow is negative, and its growth rate is concerning at -93.91% TTM, highlighting potential issues in cash management or capital expenditure. The negative free cash flow to net income ratio further emphasizes the need for improved cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	615.96M	595.46M	595.70M	491.53M	498.85M	488.24M
Gross Profit	423.14M	452.02M	449.55M	368.23M	377.82M	368.84M
EBITDA	250.69M	244.05M	252.54M	170.78M	185.06M	171.04M
Net Income	124.67M	119.27M	124.92M	78.40M	94.35M	86.42M
Balance Sheet
Total Assets	2.61B	2.50B	2.25B	2.03B	1.90B	1.79B
Cash, Cash Equivalents and Short-Term Investments	20.25M	26.66M	14.07M	6.00M	4.96M	36.74M
Total Debt	950.50M	938.24M	917.88M	734.43M	629.02M	586.55M
Total Liabilities	1.64B	1.58B	1.47B	878.28M	802.86M	709.58M
Stockholders Equity	972.52M	920.05M	776.11M	1.16B	1.10B	1.08B
Cash Flow
Free Cash Flow	-3.29M	-33.23M	-120.86M	-48.44M	-28.93M	-8.25M
Operating Cash Flow	237.85M	198.73M	67.68M	117.80M	115.58M	122.17M
Investing Cash Flow	-242.22M	-232.78M	-188.76M	-167.10M	-145.09M	-131.61M
Financing Cash Flow	21.03M	46.64M	129.16M	50.34M	-2.27M	44.84M

American States Water Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 76.24
• 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 76.24 is above the 20-day moving average (MA) of 73.57, above the 50-day MA of 73.57, and above the 200-day MA of 75.24, indicating a bullish trend. The MACD of 1.00 indicates Negative momentum. The RSI at 63.87 is Neutral, neither overbought nor oversold. The STOCH value of 80.46 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
WTRG	73 Outperform	$11.69B	17.83	10.02%	3.19%	20.70%	14.59%
AWR	71 Outperform	$2.94B	23.46	13.77%	2.48%	8.55%	13.57%
CWT	70 Neutral	$2.96B	21.77	8.49%	2.45%	0.62%	-24.24%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
MSEX	65 Neutral	$1.08B	25.04	9.70%	2.26%	11.91%	16.88%
HTO	64 Neutral	$1.79B	16.66	7.50%	1.66%	12.40%	11.98%
YORW	64 Neutral	$464.65M	23.58	8.56%	2.72%	4.09%	-14.30%

American States Water Corporate Events

American States Water’s Positive Earnings Call Highlights

The recent earnings call for American States Water Company painted a generally positive picture, highlighting significant achievements such as dividend increases and revenue growth driven by new rate approvals. Despite challenges like the decline in ASUS earnings and potential revenue volatility due to regulatory changes, the company’s robust credit ratings and planned infrastructure investments underscore a solid financial position.

American States Water Company Reports Steady Q2 2025 Performance

American States Water Company is a utility company providing water and electric services in California and operates under long-term contracts for water and wastewater services on U.S. military bases. The company is primarily involved in the regulated utility sector, with unique operations on military installations through its subsidiary, American States Utility Services.