California Water Service Group (CWT)
NYSE:CWT
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California Water Service
(NYSE:CWT)
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Rating:55Neutral
Price Target:
$44.00
â–¼(-2.46% Downside)
Action:Reiterated
Date:05/22/26
The score is held back primarily by weak cash flow quality (consistently negative free cash flow) and a very high P/E valuation, alongside a technically weak price trend below major moving averages. These are partially offset by the regulated business’s generally stable profitability and a constructive earnings-call outlook driven by multi-year rate-case revenue visibility, strong liquidity, and capital program support.
Positive Factors
Regulatory revenue visibility
A favorable California GRC decision gives multi-year, commission-authorized revenue increases and preserves adjustment mechanisms. This durable regulatory support underpins rate-base growth, enables authorized recovery of infrastructure spend, and materially reduces near-term regulatory earnings volatility.
Negative Factors
Negative free cash flow
Persistent negative free cash flow means internal cash generation doesn't cover capex and dividends, increasing reliance on external financing. Over months this constrains financial flexibility, elevates refinancing and interest-rate exposure, and can force tradeoffs between growth, remediation and payout policies.
Read all positive and negative factors
Positive Factors
Negative Factors
Regulatory revenue visibility
A favorable California GRC decision gives multi-year, commission-authorized revenue increases and preserves adjustment mechanisms. This durable regulatory support underpins rate-base growth, enables authorized recovery of infrastructure spend, and materially reduces near-term regulatory earnings volatility.
Read all positive factors
California Water Service (CWT) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$2.59B
Dividend Yield2.88%
Average Volume (3M)565.18K
Price to Earnings (P/E)167.6
Beta (1Y)<0.01
Revenue Growth4.20%
EPS Growth-12.47%
CountryUS
Employees1,278
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)2.00
Shares Outstanding59,853,264
10 Day Avg. Volume372,886
30 Day Avg. Volume565,184
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 Cap1.64
Enterprise Value/Revenue4.18
Enterprise Value/Gross Profit9.83
Enterprise Value/Ebitda13.05
Forecast
1Y Price Target
$54.00Price Target Upside19.71% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering2
EPS Forecast (FY)2.58
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:Apr 30, 2026
(Q1-2026)
| % Change Since: |
Next Earnings Date:Jul 23, 2026
Earnings Call Sentiment Positive
The call presents a broadly constructive outlook: management received a favorable revised proposed decision on the California GRC providing multi-year revenue visibility, increased capital investment plans, strong liquidity and credit ratings, progress on strategic M&A to diversify geography and services, meaningful PFAS legal recoveries, and an ongoing dividend increase. Offsetting these positives are a pronounced drop in quarterly net income and EPS driven by reduced tax credits and higher depreciation/interest, consumption variability, implementation complexity from the delayed rate case, and regulatory uncertainty (PFAS and potential microplastics rules) that could require additional capital. On balance the positive regulatory outcome, strong balance sheet, capital investment momentum, and M&A progress outweigh the near-term earnings challenges and execution risks.Positive Updates
Constructive Revised Proposed Decision on 2024 California GRC
Revised proposed decision provides clear visibility into revenue growth (approximately $91M in 2026, $43M in 2027, and $49M in 2028), preserves key regulatory mechanisms (Monterey-style RAM), authorizes multiple cost balancing accounts (pension, health care, new general insurance liability), introduces a sales reconciliation mechanism and updated rate design to better support fixed cost recovery — management describes the PD as constructive and supportive of infrastructure investment and earnings stability.
Negative Updates
Sharp Decline in Net Income and EPS
Net income for Q1 2026 was $4.0M compared to $13.3M in Q1 2025, a decline of roughly 70%; diluted EPS fell to $0.07 from $0.22, a decrease of about 68%, reflecting notable earnings pressure despite revenue increases.
Read all updates
Q1-2026 Updates
Positive
Negative
Constructive Revised Proposed Decision on 2024 California GRC
Revised proposed decision provides clear visibility into revenue growth (approximately $91M in 2026, $43M in 2027, and $49M in 2028), preserves key regulatory mechanisms (Monterey-style RAM), authorizes multiple cost balancing accounts (pension, health care, new general insurance liability), introduces a sales reconciliation mechanism and updated rate design to better support fixed cost recovery — management describes the PD as constructive and supportive of infrastructure investment and earnings stability.
Read all positive updates
Company Guidance
The call’s guidance was constructive: the revised proposed decision would add approximately $91M of revenue in 2026, $43M in 2027 and $49M in 2028, preserve key mechanisms (Monterey‑style RAM) and add a sales reconciliation/rate redesign, with interim rates retroactive to Jan. 1 and new tariffs planned to bill July 1; the company expects a 2026 capital program of $627M (Q1 capex $129.5M, up 17.6%) that would support >11% compounded annual rate‑base growth. Liquidity and capital metrics include $58.1M unrestricted cash, $45.6M restricted cash, ≈$470M available on bank lines, $600M facilities expandable to $800M (maturing into Mar. 2028), and >$340M shelf capacity after $6.1M of ATM sales; S&P rating A+ (stable). Q1 revenue was $214.6M with net income $4M ($0.07 diluted EPS) vs. $204M and $13.3M ($0.22) a year ago; rate increases added $0.11/share and accrued/unbilled added $0.06, while higher depreciation/interest and tax changes reduced EPS by ~$0.32. The company declared its 325th consecutive quarterly dividend of $0.335/share (2026 annual dividend $1.34, +8.1% year over year), is pursuing Nexus and BVRT deals (Nexus would add ~100k connections, ~20% of total), and has recovered ~$66.5M gross (~$50M net) toward PFAS costs—roughly 20–25% of expected PFAS spending, with about $60M earmarked for well replacements and the remainder for treatment.California Water Service Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
68
Positive
Cash Flow
42
Neutral
| Breakdown | TTM | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|---|
Income Statement | ||||||
| Total Revenue | 1.01B | 1.00B | 1.04B | 794.63M | 846.43M | 790.91M |
| Gross Profit | 430.31M | 367.43M | 989.12M | 363.38M | 530.35M | 483.77M |
| EBITDA | 324.01M | 358.02M | 424.26M | 217.54M | 263.34M | 259.87M |
| Net Income | 118.92M | 128.21M | 190.81M | 51.91M | 96.01M | 101.13M |
Balance Sheet | ||||||
| Total Assets | 5.78B | 5.67B | 5.18B | 4.70B | 3.95B | 3.62B |
| Cash, Cash Equivalents and Short-Term Investments | 103.74M | 51.82M | 50.12M | 84.97M | 85.03M | 78.38M |
| Total Debt | 1.70B | 1.62B | 1.40B | 1.25B | 1.14B | 1.10B |
| Total Liabilities | 3.99B | 3.98B | 3.54B | 3.27B | 2.62B | 2.45B |
| Stockholders Equity | 1.79B | 1.69B | 1.64B | 1.43B | 1.32B | 1.17B |
Cash Flow | ||||||
| Free Cash Flow | -222.82M | -214.43M | -179.93M | -165.93M | -83.98M | -61.48M |
| Operating Cash Flow | 313.53M | 302.56M | 290.87M | 217.82M | 243.77M | 231.72M |
| Investing Cash Flow | -539.70M | -520.14M | -474.87M | -389.42M | -335.52M | -300.87M |
| Financing Cash Flow | 239.78M | 219.26M | 194.72M | 171.54M | 96.12M | 104.68M |
California Water Service Technical Analysis
Neutral
45.11
Price Trends
44.37
Negative
44.35
Negative
44.68
Negative
Market Momentum
-0.38
Negative
51.63
Neutral
64.70
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWT, the sentiment is Neutral. The current price of 45.11 is above the 20-day moving average (MA) of 43.38, above the 50-day MA of 44.37, and above the 200-day MA of 44.68, indicating a neutral trend. The MACD of -0.38 indicates Negative momentum. The RSI at 51.63 is Neutral, neither overbought nor oversold. The STOCH value of 64.70 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for CWT.
California Water Service Risk Analysis
California Water Service disclosed 39 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 |
|---|---|---|---|---|---|---|---|
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
64 Neutral | $2.99B | 24.69 | 13.06% | 2.64% | 11.68% | 5.79% | |
63 Neutral | $963.81M | 22.58 | 9.07% | 2.67% | 1.76% | -0.20% | |
62 Neutral | $24.19B | 33.85 | 10.14% | 2.51% | 8.10% | 2.89% | |
61 Neutral | $10.49B | 12.71 | 8.16% | 3.48% | 13.07% | -11.65% | |
58 Neutral | $483.04M | 22.79 | 8.89% | 2.68% | 4.38% | 7.70% | |
55 Neutral | $2.59B | 167.62 | 6.96% | 2.88% | 4.20% | -12.47% |
* Utilities Sector Average
CWT
California Water Service
43.95
-1.76
-3.86%
AWR
American States Water
76.64
0.24
0.31%
AWK
American Water
125.20
-14.73
-10.52%
WTRG
Essential Utilities
37.44
-0.05
-0.13%
MSEX
Middlesex Water Company
52.11
-3.58
-6.42%
YORW
The York Water Company
29.87
-1.85
-5.84%
California Water Service Corporate Events
Executive/Board ChangesShareholder Meetings
California Water Service Shareholders Back Board, Pay, Auditor
Positive
May 21, 2026
At its Annual Meeting of Stockholders held on May 20, 2026, California Water Service Group shareholders elected all 11 director nominees to serve until the 2027 annual meeting, signaling continued support for the company’s current board comp...
Business Operations and StrategyExecutive/Board Changes
California Water Service Announces Key Leadership Promotions
Positive
May 20, 2026
On May 20, 2026, California Water Service Group’s board approved the promotion of longtime employee Tamara S. Johnson to the newly created role of Vice President, California Operations, effective July 1, 2026. Johnson, who has four decades o...
Business Operations and StrategyRegulatory Filings and Compliance
California Water Service Wins CPUC Rate Case Approval
Positive
May 1, 2026
California Water Service, the largest subsidiary of California Water Service Group, received a final decision on April 30, 2026 from the California Public Utilities Commission on its 2024 General Rate Case and Infrastructure Improvement Plan, conc...
Dividends
California Water Service Extends Longstanding Quarterly Dividend Streak
Positive
Apr 29, 2026
At its meeting on April 29, 2026, California Water Service Group’s board declared the company’s 325th consecutive quarterly dividend, maintaining the payout at $0.3350 per common share for investors. The dividend is scheduled to be pai...
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...
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.