California Water Service Group (CWT)
NYSE:CWT
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California Water Service
(NYSE:CWT)
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Rating:58Neutral
Price Target:
$45.00
▼(-2.70% Downside)
Action:ReiteratedDate:03/19/26
The score is held back primarily by weak cash-flow quality (persistent negative free cash flow and ongoing funding needs) and a currently bearish technical setup (price below key moving averages with negative MACD). These are partly offset by stable utility-level profitability and a constructive earnings outlook tied to pending regulatory milestones, rate-base growth plans, and dividend continuity, with valuation and yield providing moderate support.
Positive Factors
Rate-base growth via capex and accretive deals
A sustained ~12% CAGR in rate base, driven by record capital investment and accretive acquisitions, supports durable revenue and regulated return growth. As invested utility assets enter rate base, the company can earn an authorized return over many years, underpinning long‑term earnings and cash generation if regulators approve recovery.
Negative Factors
Persistent negative free cash flow
Sustained negative FCF reflects heavy, ongoing capital requirements that outpace operating cash inflows. Over months to years this necessitates continual external financing (debt or equity), increasing refinancing risk, potential dilution, or pressure on credit metrics if capex or regulatory recoveries slow, constraining financial flexibility.
Read all positive and negative factors
Positive Factors
Negative Factors
Rate-base growth via capex and accretive deals
A sustained ~12% CAGR in rate base, driven by record capital investment and accretive acquisitions, supports durable revenue and regulated return growth. As invested utility assets enter rate base, the company can earn an authorized return over many years, underpinning long‑term earnings and cash generation if regulators approve recovery.
Read all positive factors
California Water Service (CWT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.73B
Dividend Yield2.88%
Average Volume (3M)438.01K
Price to Earnings (P/E)20.1
Beta (1Y)0.06
Revenue Growth-2.60%
EPS Growth-33.78%
CountryUS
Employees1,278
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)0.19
Shares Outstanding59,642,845
10 Day Avg. Volume280,297
30 Day Avg. Volume438,007
Financial Highlights & Ratios
PEG Ratio-0.59
Price to Book (P/B)1.53
Price to Sales (P/S)2.58
P/FCF Ratio-12.04
Enterprise Value/Market Cap1.58
Enterprise Value/Revenue4.29
Enterprise Value/Gross Profit8.53
Enterprise Value/Ebitda12.97
Forecast
1Y Price TargetN/A
Price Target UpsideN/A
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)2.59
Revenue Forecast (FY)$1.09B
California Water Service Business Overview & Revenue Model
Company Description
California Water Service Group, through its subsidiaries, provides water utility and other related services in California, Washington, New Mexico, Hawaii, and Texas. The company is involved in the production, purchase, storage, treatment, testing,...
How the Company Makes Money
CWT primarily makes money by operating regulated water utilities that charge customers for water service under tariffs approved by state public utility commissions (most notably the California Public Utilities Commission). The largest revenue stre...
California Water Service Earnings Call Summary
Earnings Call Date:Feb 25, 2026
(Q4-2025)
| % Change Since: |
Next Earnings Date:Apr 23, 2026
Earnings Call Sentiment Positive
The call presented a balanced but constructive outlook: management reported record capital investment, strategic acquisitions (Nevada, Oregon, Texas) expected to be accretive, maintained strong liquidity and credit ratings, and delivered non‑GAAP revenue and net income growth. However, near‑term results were materially pressured by an extreme weather event that significantly reduced Q4 consumption and earnings, ongoing PFAS capital requirements (~$235M remaining) with limited recoveries so far, and regulatory timing/affordability scrutiny that adds uncertainty around rate relief. Overall, the company appears financially stable with clear growth and investment initiatives, but faces identifiable near-term headwinds that management is actively addressing.Positive Updates
Strategic Acquisitions Expand Footprint
Agreement to purchase Nexus Water's Nevada and Oregon operations (adds ~36,000 equivalent residential units and ~$109,000,000 of rate base; purchase price ~2x rate base) and acquisition of remaining minority interest in BVRT (becoming sole owner of seven Texas water/wastewater utilities). Management expects Nexus deal to be accretive in year one after integration costs.
Negative Updates
Q4 Weather-Driven Earnings Hit
Exceptional wet/cold statewide weather (December atmospheric river) materially reduced consumption. Q4 2025 revenue was $220,000,000 vs. $222,000,000 in Q4 2024 (-0.9%). Q4 net income fell to $11,500,000 from $19,700,000 (≈ -41.6%) and Q4 diluted EPS was $0.19 vs. $0.33 (≈ -42%). Management attributed a $0.59 per share EPS decline to weather-induced consumption decreases.
Read all updates
Q4-2025 Updates
Positive
Negative
Strategic Acquisitions Expand Footprint
Agreement to purchase Nexus Water's Nevada and Oregon operations (adds ~36,000 equivalent residential units and ~$109,000,000 of rate base; purchase price ~2x rate base) and acquisition of remaining minority interest in BVRT (becoming sole owner of seven Texas water/wastewater utilities). Management expects Nexus deal to be accretive in year one after integration costs.
Read all positive updates
Company Guidance
The call’s forward-looking guidance emphasized near‑term regulatory milestones and continued capital deployment: management expects a proposed decision in the 2024 California GRC “very soon” (company noted a PD could be issued by March 5 with a possible final vote April 9) and said approval of the 2024 GRC plus planned investments and the Nevada/Oregon acquisitions would drive compounded annual rate‑base growth of almost 12% through 2027; the Nexus deal adds roughly $109M of rate base at ~2x rate base purchase price, ~36,000 equivalent residential units, and is expected to be accretive in year one with initial Nexus CapEx of about $20–30M. They reaffirmed a heavy capital program (2025 CapEx $517.0M, Q4 $52.3M), noted PFAS program spend of ~$20M in 2025 with expected PFAS spend of $50–70M in 2026 and ~$235M of anticipated remaining PFAS expenditures (not included in 2026–27 CapEx estimates), and outlined liquidity/financing capacity of $51.8M unrestricted cash, $45.6M restricted cash, ≈$470M available on bank lines, $600M credit facilities expandable to $800M and $370M of long‑term financings issued Oct 1, 2025. They also highlighted regulatory wins and expectations (3% interim California rate implemented Jan 2026, Nevada DSIC/decoupling and six‑month case timelines, Washington and Hawaii filings seeking $4.9M and $2.2M annual revenue increases respectively), preserved a 10.27% ROE in California through Jan 2028, and reiterated shareholder return plans (324th consecutive quarterly dividend of $0.33 and intended 2026 annual dividend of $1.34, an ~8.1% increase).California Water Service Financial Statement Overview
Summary
Income Statement
66
Positive
Balance Sheet
72
Positive
Cash Flow
43
Neutral
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 1.00B | 1.04B | 794.63M | 846.43M | 790.91M |
| Gross Profit | 367.43M | 989.12M | 363.38M | 530.35M | 483.77M |
| EBITDA | 358.02M | 424.26M | 217.54M | 263.34M | 259.87M |
| Net Income | 128.21M | 190.81M | 51.91M | 96.01M | 101.13M |
Balance Sheet | |||||
| Total Assets | 5.67B | 5.18B | 4.70B | 3.95B | 3.62B |
| Cash, Cash Equivalents and Short-Term Investments | 51.82M | 50.12M | 84.97M | 85.03M | 78.38M |
| Total Debt | 1.62B | 1.40B | 1.25B | 1.14B | 1.10B |
| Total Liabilities | 3.98B | 3.54B | 3.27B | 2.62B | 2.45B |
| Stockholders Equity | 1.69B | 1.64B | 1.43B | 1.32B | 1.17B |
Cash Flow | |||||
| Free Cash Flow | -214.43M | -179.93M | -165.93M | -83.98M | -61.48M |
| Operating Cash Flow | 302.56M | 290.87M | 217.82M | 243.77M | 231.72M |
| Investing Cash Flow | -520.14M | -474.87M | -389.42M | -335.52M | -300.87M |
| Financing Cash Flow | 219.26M | 194.72M | 171.54M | 96.12M | 104.68M |
California Water Service Technical Analysis
Positive
46.25
Price Trends
45.07
Positive
44.51
Positive
45.06
Positive
Market Momentum
0.22
Negative
54.49
Neutral
78.02
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWT, the sentiment is Positive. The current price of 46.25 is above the 20-day moving average (MA) of 44.87, above the 50-day MA of 45.07, and above the 200-day MA of 45.06, indicating a bullish trend. The MACD of 0.22 indicates Negative momentum. The RSI at 54.49 is Neutral, neither overbought nor oversold. The STOCH value of 78.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for CWT.
California Water Service Risk Analysis
California Water Service disclosed 38 risk factors in its most recent earnings report. California Water Service reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
California Water Service Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $11.42B | 17.43 | 9.18% | 3.48% | 21.35% | 20.96% | |
67 Neutral | $984.44M | 26.96 | 9.08% | 2.67% | 6.24% | 3.35% | |
66 Neutral | $26.43B | 22.91 | 10.34% | 2.51% | 12.29% | 13.13% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $3.01B | 21.42 | 13.10% | 2.64% | 10.28% | 13.56% | |
58 Neutral | $2.73B | 20.13 | 7.68% | 2.88% | -2.60% | -33.78% | |
58 Neutral | $456.57M | 22.20 | 8.49% | 2.68% | 3.63% | -5.82% |
* Utilities Sector Average
CWT
California Water Service
45.77
-0.78
-1.68%
AWR
American States Water
77.09
3.94
5.38%
AWK
American Water
136.36
0.77
0.57%
WTRG
Essential Utilities
40.32
3.86
10.60%
MSEX
Middlesex Water Company
53.65
-5.26
-8.92%
YORW
The York Water Company
31.60
-0.51
-1.59%
California Water Service Corporate Events
Business Operations and StrategyRegulatory Filings and Compliance
California Water Service Gains CPUC Approval for Rate Increases
Positive
Mar 18, 2026
On March 13, 2026, the California Public Utilities Commission issued a proposed decision on California Water Service’s 2024 General Rate Case, authorizing additional revenues of $92.3 million in 2026, $50.8 million in 2027 and $52.4 million ...
Business Operations and StrategyExecutive/Board Changes
California Water Service VP of Regulatory Affairs Retiring
Neutral
Mar 5, 2026
California Water Service Group announced that Greg A. Milleman, its Vice President of Rates and Regulatory Affairs, notified the company on March 2, 2026, of his intention to retire after 13 years of service, with the effective retirement date sti...
Business Operations and StrategyDividendsFinancial DisclosuresM&A TransactionsPrivate Placements and Financing
California Water Service Reports Lower Earnings Amid Wet Weather
Negative
Feb 25, 2026
On February 25, 2026, California Water Service Group reported that fourth-quarter 2025 net income fell 42% year on year to $11.5 million on slightly lower revenue of $220 million, as unusually wet December weather in California reduced customer co...
Dividends
California Water Service Marks 59th Consecutive Dividend Increase
Positive
Jan 28, 2026
On January 28, 2026, California Water Service Group’s board declared its 324th consecutive quarterly dividend, setting the payout at $0.3350 per common share, payable on February 20, 2026, to shareholders of record as of February 9, 2026. Th...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.