California Water Service (CWT) AI Stock Analysis

• Market Cap: $2.80B
• Dividend Yield: 2.6%
• Average Volume (3M): 326.11K
• Price to Earnings (P/E): 20.5
• Beta (1Y): 0.21
• Revenue Growth: 0.62%
• EPS Growth: -24.24%
• Country: US
• Employees: 1,278
• Sector: Utilities
• Sector Strength: 64
• Industry: Regulated Water
• EPS (TTM): 0.71
• Shares Outstanding: 59,581,154
• 10 Day Avg. Volume: 242,998
• 30 Day Avg. Volume: 326,109
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): N/A
• P/FCF Ratio: N/A
• Enterprise Value/Market Cap: 1.49
• Enterprise Value/Revenue: 4.19
• Enterprise Value/Gross Profit: 4.20
• Enterprise Value/Ebitda: 11.52
• 1Y Price Target: $52.33
• Price Target Upside: 13.66% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 3

• Rating: 68 Neutral
• Price Target: $50.00 ▲(8.60% Upside)

The overall stock score reflects strong financial performance and positive earnings call highlights, including revenue growth and strategic investments. However, technical indicators and cash flow challenges slightly temper the score.

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 generates revenue primarily through the sale of water to its customers, which includes residential, commercial, and industrial users. The company's revenue model is based on regulated rates set by state agencies, allowing it to charge customers for the volume of water consumed as well as fixed charges for infrastructure maintenance. Key revenue streams include water sales, which are influenced by customer demand and seasonal usage patterns, and service fees for additional services such as wastewater treatment. CWT also benefits from infrastructure investments and improvements that can lead to increased efficiency and service reliability. Additionally, the company may engage in partnerships or contracts with municipalities and other entities for water supply and management, further contributing to its earnings.

California Water Service Financial Statement Overview

Summary

California Water Service demonstrates strong profitability with improving margins and reduced leverage, enhancing financial stability. However, negative free cash flow indicates potential cash management challenges that need addressing.

Income Statement

California Water Service shows a strong gross profit margin consistently above 95%, indicating efficient cost management. The net profit margin has improved over time, reaching 13.7% in TTM, reflecting enhanced profitability. Revenue growth is positive, with a 2.1% increase in TTM, but historical fluctuations suggest some volatility. EBIT and EBITDA margins are robust, supporting overall profitability.

Balance Sheet

The company's debt-to-equity ratio has significantly improved to 0.04 in TTM, indicating reduced leverage and financial risk. Return on equity is moderate at 8.3%, suggesting reasonable profitability from equity. The equity ratio is stable, reflecting a solid capital structure, but historical high leverage poses a potential risk.

Cash Flow

Operating cash flow is positive and covers net income adequately, but free cash flow remains negative, indicating potential cash management challenges. Free cash flow growth is improving, but the negative free cash flow to net income ratio highlights ongoing cash flow issues.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	990.68M	1.04B	794.63M	846.43M	790.91M	794.31M
Gross Profit	990.34M	989.12M	363.38M	529.45M	483.84M	406.34M
EBITDA	360.75M	424.26M	217.54M	262.72M	250.83M	244.00M
Net Income	135.84M	190.81M	51.91M	96.01M	101.13M	96.83M
Balance Sheet
Total Assets	5.40B	5.18B	4.60B	3.85B	3.62B	3.39B
Cash, Cash Equivalents and Short-Term Investments	50.54M	50.12M	39.59M	62.10M	78.38M	44.55M
Total Debt	72.47M	1.38B	1.25B	1.13B	1.11B	1.16B
Total Liabilities	3.74B	3.54B	3.17B	2.53B	2.44B	2.47B
Stockholders Equity	1.66B	1.64B	1.43B	1.32B	1.18B	921.34M
Cash Flow
Free Cash Flow	-228.61M	-179.93M	-165.93M	-83.98M	-61.48M	-180.73M
Operating Cash Flow	257.30M	290.87M	217.82M	243.77M	231.72M	117.92M
Investing Cash Flow	-489.82M	-474.87M	-389.42M	-335.52M	-300.87M	-346.07M
Financing Cash Flow	246.00M	194.72M	171.54M	96.12M	104.68M	229.98M

California Water Service Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 46.04
• 50DMA: Positive
• 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 46.04 is below the 20-day moving average (MA) of 46.65, above the 50-day MA of 45.91, and below the 200-day MA of 46.35, indicating a neutral trend. The MACD of 0.25 indicates Positive momentum. The RSI at 46.54 is Neutral, neither overbought nor oversold. The STOCH value of 33.94 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
ARTNA	71 Outperform	$342.75M	15.26	9.34%	3.70%	7.13%	22.19%
MSEX	71 Outperform	$964.61M	21.74	9.70%	2.60%	11.91%	16.88%
CWT	68 Neutral	$2.80B	20.49	8.49%	2.60%	0.62%	-24.24%
Sector *	66 Neutral	$17.34B	17.87	5.54%	3.65%	6.63%	11.55%
AWR	66 Neutral	$2.87B	22.84	13.77%	2.59%	8.55%	13.57%
YORW	61 Neutral	$448.07M	22.15	8.56%	2.86%	4.09%	-14.30%
HTO	60 Neutral	$1.78B	16.02	7.50%	1.67%	12.40%	11.98%

California Water Service Corporate Events

California Water Service Declares Quarterly Dividend

On July 30, 2025, California Water Service Group announced the declaration of its 322nd consecutive quarterly dividend of $0.30 per common share. This dividend will be payable on August 22, 2025, to stockholders of record as of August 11, 2025. This consistent dividend declaration underscores the company’s stable financial performance and commitment to returning value to its shareholders, reinforcing its position in the water utility industry.

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.