American States Water (AWR) AI Stock Analysis

• Market Cap: $2.83B
• Dividend Yield: 2.63%
• Average Volume (3M): 292.43K
• Price to Earnings (P/E): 21.7
• 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): 1.06
• Shares Outstanding: 38,714,424
• 10 Day Avg. Volume: 345,957
• 30 Day Avg. Volume: 292,427
• PEG Ratio: -4.11
• Price to Book (P/B): 3.16
• Price to Sales (P/S): 4.89
• P/FCF Ratio: -87.63
• Enterprise Value/Market Cap: 1.32
• Enterprise Value/Revenue: 5.86
• Enterprise Value/Gross Profit: 8.36
• Enterprise Value/Ebitda: 14.44
• 1Y Price Target: $72.00
• Price Target Upside: -2.28% Downside
• Rating Consensus: Moderate Sell
• Number of Analyst Covering: 1
• EPS Forecast (FY): 3.32
• Revenue Forecast (FY): $644.24M

• Rating: 70 Outperform
• Price Target: $79.00 ▲(7.22% Upside)

American States Water's overall stock score reflects strong financial performance and a positive earnings outlook, supported by robust earnings growth and strategic investments. However, technical indicators suggest bearish momentum, and challenges in cash flow management and potential revenue volatility due to regulatory changes pose risks. The company's valuation is fair, with a reasonable P/E ratio and dividend yield.

Positive Factors

Revenue Growth

The increase in revenue across water, electric, and ASUS segments indicates strong market demand and effective pricing strategies, supporting long-term growth.

Recognition for Sustainability

Recognition for sustainability enhances the company's brand reputation and aligns with growing consumer and regulatory focus on environmental responsibility.

Stable Financial Environment

Deferral of the cost of capital application provides financial stability and predictability, aiding long-term planning and investment strategies.

Negative Factors

Higher Operating Expenses

Rising operating expenses can pressure margins and reduce profitability, potentially limiting funds available for reinvestment and growth.

Cash Flow Management Challenges

Negative free cash flow suggests difficulties in funding operations and investments without external financing, impacting financial flexibility.

Revenue Volatility Risk

Changes in regulatory mechanisms can introduce revenue unpredictability, affecting financial stability and planning.

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

American States Water demonstrates strong profitability with consistent revenue growth and efficient equity utilization. However, challenges in cash flow management, particularly with negative free cash flow, could impact future investments and debt servicing. The balance sheet remains solid, but the reliance on debt financing warrants attention.

Income Statement

American States Water shows a solid financial performance with a consistent revenue growth rate of 3.4% in the TTM period. The company maintains strong profitability with a gross profit margin of 70.1% and a net profit margin of 20.4%. The EBIT and EBITDA margins are also robust at 32.6% and 40.0%, respectively. However, the slight decrease in gross profit margin compared to the previous year indicates some cost pressures.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.91, indicating moderate leverage. The return on equity is healthy at 13.5%, showing efficient use of equity capital. However, the equity ratio of 38.0% suggests a relatively high reliance on debt financing, which could pose risks in a rising interest rate environment.

Cash Flow

The cash flow statement reveals challenges with free cash flow, which is negative, indicating potential issues in covering capital expenditures. The operating cash flow to net income ratio is 0.33, suggesting that cash generation from operations is lower than net income. The significant negative free cash flow to net income ratio highlights the need for improved cash management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	636.89M	595.46M	595.70M	491.53M	498.85M	488.24M
Gross Profit	446.55M	452.02M	449.55M	368.23M	377.82M	368.84M
EBITDA	258.54M	244.05M	252.54M	170.78M	187.58M	174.36M
Net Income	130.14M	119.27M	124.92M	78.40M	94.35M	86.42M
Balance Sheet
Total Assets	2.66B	2.50B	2.25B	2.03B	1.90B	1.79B
Cash, Cash Equivalents and Short-Term Investments	26.07M	26.66M	14.07M	6.00M	4.96M	36.74M
Total Debt	921.78M	938.24M	917.88M	734.43M	629.02M	586.55M
Total Liabilities	1.65B	1.58B	1.47B	1.32B	1.22B	1.15B
Stockholders Equity	1.01B	920.05M	776.11M	709.55M	685.95M	641.67M
Cash Flow
Free Cash Flow	34.92M	-33.23M	-120.86M	-48.44M	-28.93M	-8.25M
Operating Cash Flow	266.53M	198.73M	67.68M	117.80M	115.58M	122.17M
Investing Cash Flow	-232.63M	-232.78M	-188.76M	-167.10M	-145.09M	-131.61M
Financing Cash Flow	-24.30M	46.64M	129.16M	50.34M	-2.27M	44.84M

American States Water Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 73.68
• 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 AWR, the sentiment is Negative. The current price of 73.68 is above the 20-day moving average (MA) of 73.29, below the 50-day MA of 73.72, and below the 200-day MA of 74.87, indicating a bearish trend. The MACD of 0.05 indicates Negative momentum. The RSI at 48.08 is Neutral, neither overbought nor oversold. The STOCH value of 71.05 is Neutral, 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
AWR	70 Outperform	$2.83B	21.65	13.73%	2.63%	10.28%	13.56%
ARTNA	70 Outperform	$330.15M	14.51	9.25%	3.88%	5.80%	12.33%
YORW	69 Neutral	$475.91M	23.69	8.58%	2.67%	3.63%	-5.82%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	65 Neutral	$2.56B	18.74	8.19%	2.87%	-2.60%	-33.78%
GWRS	58 Neutral	$242.94M	51.68	6.30%	3.60%	7.06%	-38.94%
MSEX	55 Neutral	$948.07M	21.70	9.27%	2.67%	6.24%	3.35%

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.

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.