California Water Service (CWT) AI Stock Analysis

• Market Cap: $2.63B
• Dividend Yield: 2.83%
• Average Volume (3M): 402.52K
• Price to Earnings (P/E): 19.3
• Beta (1Y): 0.06
• Revenue Growth: -2.60%
• EPS Growth: -33.78%
• Country: US
• Employees: 1,278
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 1.03
• Shares Outstanding: 59,591,340
• 10 Day Avg. Volume: 458,982
• 30 Day Avg. Volume: 402,518
• PEG Ratio: 0.05
• Price to Book (P/B): 1.62
• Price to Sales (P/S): 2.56
• P/FCF Ratio: -14.77
• Enterprise Value/Market Cap: 1.57
• Enterprise Value/Revenue: 4.13
• Enterprise Value/Gross Profit: 7.29
• Enterprise Value/Ebitda: 12.28
• 1Y Price Target: $53.00
• Price Target Upside: 20.98% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): 2.38
• Revenue Forecast (FY): $1.03B

• Rating: 65 Neutral
• Price Target: $47.00 ▲(7.28% Upside)

California Water Service's overall score reflects solid financial performance and a positive outlook from the earnings call, balanced by technical analysis indicating bearish momentum. The valuation is reasonable, supported by a stable dividend yield. Key risks include cash flow challenges and potential regulatory delays.

Positive Factors

Infrastructure Investments

Significant infrastructure investments indicate a commitment to long-term service reliability and operational efficiency, enhancing the company's ability to meet future demand.

Debt Refinancing

Successful debt refinancing with oversubscription suggests strong investor confidence and reduces financial risk by securing favorable long-term financing.

Texas Market Growth

Expansion in the Texas market highlights growth potential and diversification, which can drive future revenue and mitigate regional regulatory risks.

Negative Factors

Declining Revenue

A decline in operating revenue suggests challenges in maintaining growth momentum, potentially impacting profitability and cash flow.

Cash Flow Challenges

Limited cash flow conversion efficiency can constrain the company's ability to fund operations and investments, affecting long-term financial health.

Regulatory Delays

Regulatory delays can lead to uncertainty in revenue adjustments, impacting financial planning and potentially delaying infrastructure projects.

California Water Service Business Overview & Revenue Model

Company Description

California Water Service (CWT) is a leading public water utility company that provides water utility services to residential, commercial, and industrial customers across California. The company operates through various subsidiaries and serves multiple regions, including the Bay Area, Central Coast, and Southern California. CWT focuses on delivering high-quality water services, ensuring sustainable water supply, and maintaining infrastructure to meet the needs of its diverse customer base. Its core offerings include water distribution, wastewater treatment, and related services designed to promote water conservation and efficient resource management.

How the Company Makes Money

California Water Service generates revenue primarily through the sale of water to its customers, which includes residential, commercial, and industrial users. The company operates under a regulated pricing structure, where rates are set by state utility commissions based on the cost of providing service, infrastructure investments, and operational expenses. Key revenue streams include monthly water service charges, connection fees for new customers, and charges for additional services such as water quality testing and emergency services. CWT may also participate in public-private partnerships and government contracts that provide additional revenue opportunities. Factors contributing to its earnings include effective water management practices, infrastructure investments, and regulatory frameworks that allow for reasonable rate adjustments to meet operational costs and ensure service reliability.

California Water Service Financial Statement Overview

Summary

California Water Service demonstrates solid revenue growth and profitability, supported by a stable balance sheet. However, cash flow management poses challenges, with declining free cash flow growth and moderate cash flow ratios. The company should focus on improving operational efficiencies and cash flow generation to enhance financial health.

Income Statement

California Water Service shows a stable revenue growth with a TTM increase of 1.18%. The gross profit margin is strong at 49.87%, although it has decreased from the previous year. Net profit margin remains healthy at 13.61%. However, the EBIT and EBITDA margins have slightly declined, indicating some pressure on operational efficiency.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.84, reflecting a balanced approach to leverage. Return on equity is reasonable at 8.09%, though it has decreased compared to the previous year. The equity ratio stands at 32.91%, indicating a stable capital structure.

Cash Flow

Cash flow analysis reveals challenges, with a significant decline in free cash flow growth. The operating cash flow to net income ratio is moderate at 0.52, while the free cash flow to net income ratio is 0.57, suggesting limited cash flow conversion efficiency.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	1.00B	1.04B	794.63M	846.43M	790.91M	794.31M
Gross Profit	567.62M	989.12M	363.38M	530.35M	483.77M	391.62M
EBITDA	337.09M	424.26M	217.54M	263.34M	259.87M	251.65M
Net Income	136.39M	190.81M	51.91M	96.01M	101.13M	96.83M
Balance Sheet
Total Assets	5.52B	5.18B	4.70B	3.95B	3.62B	3.39B
Cash, Cash Equivalents and Short-Term Investments	75.99M	50.12M	84.97M	85.03M	78.38M	44.55M
Total Debt	1.52B	1.40B	1.25B	1.14B	1.10B	1.17B
Total Liabilities	3.82B	3.54B	3.27B	2.62B	2.45B	2.47B
Stockholders Equity	1.70B	1.64B	1.43B	1.32B	1.17B	921.34M
Cash Flow
Free Cash Flow	-180.60M	-179.93M	-165.93M	-83.98M	-61.48M	-180.73M
Operating Cash Flow	322.74M	290.87M	217.82M	243.77M	231.72M	117.92M
Investing Cash Flow	-507.85M	-474.87M	-389.42M	-335.52M	-300.87M	-346.07M
Financing Cash Flow	201.52M	194.72M	171.54M	96.12M	104.68M	229.98M

California Water Service Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 43.81
• 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 43.81 is below the 20-day moving average (MA) of 44.50, below the 50-day MA of 45.97, and below the 200-day MA of 46.19, indicating a bearish trend. The MACD of -0.68 indicates Positive momentum. The RSI at 43.74 is Neutral, neither overbought nor oversold. The STOCH value of 57.05 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
AWR	70 Outperform	$2.86B	21.91	13.73%	2.62%	10.28%	13.56%
YORW	69 Neutral	$483.27M	24.05	8.58%	2.59%	3.63%	-5.82%
WTRG	66 Neutral	$10.74B	15.74	10.29%	3.48%	21.35%	20.96%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	65 Neutral	$2.63B	19.31	8.19%	2.83%	-2.60%	-33.78%
AWK	64 Neutral	$25.67B	23.07	10.46%	2.51%	12.29%	13.13%
MSEX	55 Neutral	$972.82M	22.27	9.27%	2.60%	6.24%	3.35%

California Water Service Corporate Events

California Water Service Declares Quarterly Dividend

On October 29, 2025, California Water Service Group announced the declaration of its 323rd consecutive quarterly dividend of $0.30 per common share. This dividend will be payable on November 21, 2025, to stockholders of record as of November 10, 2025. This consistent dividend declaration underscores the company’s stable financial performance and commitment to returning value to its shareholders.

California Water Service Completes Major Debt Issuance

On October 1, 2025, California Water Service Group completed the sale and issuance of $70 million in Series A Notes and $100 million in Series B Notes, while its subsidiary, California Water Service Company, issued $200 million in First Mortgage Bonds. The proceeds from these financial transactions are intended for refinancing existing debt and general corporate purposes. The Notes and Bonds received strong ratings from S&P Global, indicating a stable financial outlook for the company and its subsidiary.