California Water Service (CWT) AI Stock Analysis

• Market Cap: $2.72B
• Dividend Yield: 2.66%
• Average Volume (3M): 343.90K
• Price to Earnings (P/E): 20.0
• Beta (1Y): 0.24
• Revenue Growth: 3.83%
• EPS Growth: -8.75%
• Country: US
• Employees: 1,278
• Sector: Utilities
• Sector Strength: 79
• Industry: Regulated Water
• EPS (TTM): 0.22
• Shares Outstanding: 59,570,140
• 10 Day Avg. Volume: 320,113
• 30 Day Avg. Volume: 343,904
• PEG Ratio: -0.67
• Price to Book (P/B): 1.67
• Price to Sales (P/S): 0.00
• P/FCF Ratio: -16.21
• Enterprise Value/Market Cap: 1.54
• Enterprise Value/Revenue: 1.04
• Enterprise Value/Gross Profit: 7.84
• Enterprise Value/Ebitda: 2.70
• 1Y Price Target: $55.50
• Price Target Upside: 21.71% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2

• Rating: 66 Neutral
• Price Target: $49.00 ▲(7.46%Upside)

California Water Service's strong financial stability and governance are offset by technical weakness and challenges in free cash flow management. The stock's valuation remains reasonable with a solid dividend yield, while recent corporate events and earnings call insights provide a supportive backdrop.

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, distribution, and sale of water for domestic, industrial, public, and irrigation uses, as well as for fire protection. It offers its services to approximately 494,500 customer connections in 100 California communities; approximately 6,200 water and wastewater customer connections on the islands of Maui and Hawaii; approximately 36,400 customer connections in the Tacoma, Olympia, Graham, Spanaway, Puyallup, and Gig Harbor areas; and approximately 8,600 water and wastewater customer connections in the Belen, Los Lunas, Indian Hills, and Elephant Butte areas in New Mexico. The company also engages in the provision of non-regulated water-related services, including operating of municipally owned water systems, privately owned water, and recycled water distribution systems; water system operation, meter reading, and billing services to private companies and municipalities; leasing of communication antenna sites on its properties to telecommunication companies; and billing of optional third-party insurance programs to its residential customers, as well as provides lab services. In addition, it offers wastewater collection and treatment services. The company was founded in 1926 and is headquartered in San Jose, California.

How the Company Makes Money

California Water Service makes money primarily through the provision of water and wastewater services. Its revenue model is based on collecting fees for the water services delivered to its customers, which include residential, commercial, and industrial users. Rates for these services are regulated by state public utility commissions, which approve pricing structures based on the costs of service delivery, infrastructure maintenance, and investment needs. Additionally, the company earns revenue through various infrastructure improvement projects, which are often funded through government programs or partnerships, allowing the company to upgrade its systems and ensure compliance with environmental and safety standards. The company's financial performance is significantly influenced by regulatory decisions, operational efficiency, and effective management of water resources.

California Water Service Financial Statement Overview

Summary

California Water Service demonstrates financial stability with consistent revenue growth, strong profitability margins, and improved leverage ratios. However, the decline in net profit margin and negative free cash flow highlight areas for potential improvement.

Income Statement

California Water Service shows a stable income statement with a consistent gross profit margin of approximately 61.8% in TTM (Trailing-Twelve-Months). However, the net profit margin decreased to 13.8% from 18.4% in the previous year. Revenue growth is evident with a 21.9% increase from 2023 to 2024, but the recent TTM figure indicates a slight decline. EBIT and EBITDA margins are healthy at 18.4% and 35.5% respectively, suggesting operational efficiency.

Balance Sheet

The balance sheet reflects a strong equity base with an equity ratio of 31.0% in TTM. The debt-to-equity ratio has significantly improved to 0.04, indicating reduced leverage. Return on equity (ROE) is robust at 8.2% for TTM, although slightly lower than the previous year. The company maintains a conservative financial structure, minimizing risks associated with high leverage.

Cash Flow

Cash flow analysis reveals challenges in free cash flow management, with a free cash flow of -$58.2 million in TTM, though improved from the previous period. The operating cash flow to net income ratio stands at 2.26, signifying a strong operational cash generation capability. However, the free cash flow to net income ratio remains negative, indicating the need for better capital expenditure management.

Breakdown	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.04B	794.63M	846.43M	790.91M	794.31M
Gross Profit	989.12M	363.38M	529.45M	483.84M	489.55M
EBITDA	424.26M	217.54M	262.72M	250.83M	244.00M
Net Income	190.81M	51.91M	96.01M	101.13M	96.83M
Balance Sheet
Total Assets	5.18B	4.60B	3.85B	3.62B	3.39B
Cash, Cash Equivalents and Short-Term Investments	50.12M	39.59M	62.10M	78.38M	44.55M
Total Debt	1.38B	1.25B	1.13B	1.10B	1.16B
Total Liabilities	3.54B	3.17B	2.53B	2.44B	2.47B
Stockholders Equity	1.64B	1.43B	1.32B	1.18B	921.34M
Cash Flow
Free Cash Flow	-179.93M	-165.93M	-83.98M	-61.48M	-180.73M
Operating Cash Flow	290.87M	217.82M	243.77M	231.72M	117.92M
Investing Cash Flow	-474.87M	-389.42M	-335.52M	-300.87M	-346.07M
Financing Cash Flow	194.72M	171.54M	96.12M	104.68M	229.98M

California Water Service Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 45.60
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CWT, the sentiment is Negative. The current price of 45.6 is below the 20-day moving average (MA) of 45.72, below the 50-day MA of 46.25, and below the 200-day MA of 47.31, indicating a bearish trend. The MACD of -0.31 indicates Positive momentum. The RSI at 43.10 is Neutral, neither overbought nor oversold. The STOCH value of 22.02 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CWT.

California Water Service Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTO	71 Outperform	$1.74B	17.09	7.49%	3.25%	12.34%	11.78%
ARTNA	69 Neutral	$348.77M	16.26	9.04%	4.44%	8.31%	21.97%
Sector *	67 Neutral	$17.02B	17.19	4.47%	3.85%	4.76%	6.06%
CWT	66 Neutral	$2.72B	20.02	8.67%	2.66%	3.83%	-8.75%
MSEX	65 Neutral	$974.86M	22.69	9.80%	2.47%	16.02%	18.29%
AWR	62 Neutral	$2.91B	23.33	13.95%	2.50%	6.79%	5.96%
YORW	58 Neutral	$456.06M	23.16	8.63%	2.74%	3.45%	-19.90%

California Water Service Corporate Events

California Water Service Retains A+/Stable Credit Rating

On July 10, 2025, California Water Service Group announced that S&P Global has retained an A+/Stable credit rating for its largest subsidiary, California Water Service. This rating reflects an ‘excellent’ business risk and ‘intermediate’ financial risk, underscoring the company’s strong balance sheet and fiscal discipline. The continued high credit rating supports the company’s ability to responsibly invest in infrastructure, benefiting both stockholders and customers.

The most recent analyst rating on (CWT) stock is a Buy with a $57.00 price target. To see the full list of analyst forecasts on California Water Service stock, see the CWT Stock Forecast page.

California Water Service Holds Annual Stockholders Meeting

On May 28, 2025, California Water Service Group held its Annual Meeting of Stockholders, where several key decisions were made. Stockholders elected directors to serve until the 2026 meeting, approved the compensation for named executive officers, and ratified the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for 2025. These actions are expected to influence the company’s governance and financial oversight positively.

The most recent analyst rating on (CWT) stock is a Buy with a $58.00 price target. To see the full list of analyst forecasts on California Water Service stock, see the CWT Stock Forecast page.

California Water Service Announces Equity Distribution Agreement

On May 14, 2025, California Water Service Group announced an equity distribution agreement with several financial institutions to sell up to $350 million in common stock through an at-the-market equity program. This initiative allows the company to raise capital for general corporate purposes, including working capital and investments, by selling shares at prevailing market prices or through negotiated transactions. The agreement also includes provisions for forward sale agreements, where the company may settle in cash or shares, impacting its financial strategy and stakeholder interests.

The most recent analyst rating on (CWT) stock is a Buy with a $54.00 price target. To see the full list of analyst forecasts on California Water Service stock, see the CWT Stock Forecast page.