H2O America (HTO) AI Stock Analysis

• Market Cap: $1.85B
• Dividend Yield: 3.4%
• Average Volume (3M): 368.27K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.06
• Revenue Growth: 11.39%
• EPS Growth: 13.86%
• Country: US
• Employees: 822
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 1.27
• Shares Outstanding: 35,805,088
• 10 Day Avg. Volume: 278,206
• 30 Day Avg. Volume: 368,275
• PEG Ratio: 4.30
• Price to Book (P/B): 1.21
• Price to Sales (P/S): 2.21
• P/FCF Ratio: -8.93
• Enterprise Value/Market Cap: 1.96
• Enterprise Value/Revenue: 4.51
• Enterprise Value/Gross Profit: 7.87
• Enterprise Value/Ebitda: 11.54
• 1Y Price Target: $60.00
• Price Target Upside: 15.81% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 2
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $55.00 ▲(6.16% Upside)

The score is driven primarily by strong profitability and a low-leverage balance sheet, partially offset by a significant free cash flow decline. Guidance and EPS growth commentary are constructive, while technicals show modestly positive momentum. Valuation is supportive with a moderate P/E and a solid dividend yield.

Positive Factors

Strong Profitability

High margins indicate efficient operations and a strong competitive position, supporting long-term financial stability and growth potential.

Infrastructure Investment

Significant infrastructure investments enhance service capacity and reliability, positioning the company for future growth and market expansion.

Leadership Transition

Leadership continuity with Andrew F. Walters as chair ensures strategic stability and continued focus on long-term goals and customer service.

Negative Factors

Free Cash Flow Decline

Significant decline in free cash flow limits financial flexibility and may hinder the company's ability to invest in growth opportunities.

Regulatory Uncertainties

Regulatory uncertainties can delay strategic acquisitions, impacting growth plans and potentially affecting the company's market position.

Increased Operating Expenses

Rising operating expenses, driven by inflationary pressures, can erode profitability margins and affect long-term financial performance.

H2O America Business Overview & Revenue Model

Company Description

H2O America, through its subsidiaries, provides water utility and other related services in the United States. The company engages in the production, purchase, storage, purification, distribution, wholesale, and retail sale of water and wastewater services; and supplies groundwater from wells, surface water from watershed run-off and diversion, reclaimed water, and imported water purchased from Santa Clara Valley Water District. It also offers non-tariffed services, including water system operations, maintenance agreements, and antenna site leases; contracted services, sewer operations, and other water related services; and a Linebacker protection plan for public drinking water customers in Connecticut and Maine. In addition, the company provides water services to approximately 232,000 connections that serve approximately one million people residing in portions of the cities of San Jose and Cupertino and in the cities of Campbell, Monte Sereno, Saratoga and the Town of Los Gatos, and adjacent unincorporated territories in the County of Santa Clara in the State of California; water service to approximately 142,000 service connections, which serve a population of approximately 463,000 people in 81 municipalities with a service area of approximately 275 square miles in Connecticut and Maine and approximately 3,000 wastewater connections in Southbury, Connecticut; approximately 29,000 service connections that serve approximately 88,000 people in a service area comprising more than 271 square miles in the region between San Antonio and Austin, Texas and approximately 1,000 wastewater connections. Further, it owns undeveloped land in California; and commercial properties and parcels of land in Connecticut. The company was formerly known as SJW Group and changed its name to H2O America in May 2025. H2O America was incorporated in 1985 and is headquartered in San Jose, California.

How the Company Makes Money

H2O America generates revenue through multiple key streams, including the sale of water filtration and purification products directly to consumers, businesses, and government entities. The company also earns income from service contracts for the maintenance and installation of its systems, as well as ongoing support services. Significant partnerships with retailers and distributors enhance H2O America's market reach, allowing for broader distribution of its products. Additionally, H2O America may engage in research and development collaborations with environmental agencies and technology firms, which can lead to grants, funding, and shared revenue from jointly developed solutions.

H2O America Financial Statement Overview

Summary

H2O America demonstrates strong profitability and revenue growth, supported by efficient operations. However, the company faces challenges with negative free cash flow and moderate leverage. Continued focus on improving cash flow and managing debt levels will be crucial for sustaining financial health.

Income Statement

H2O America shows consistent revenue growth with a TTM increase of 2.88%. The company maintains strong profitability with a gross profit margin of 56.73% and a net profit margin of 13.03%. EBIT and EBITDA margins are healthy at 23.56% and 38.37% respectively, indicating efficient operations. However, the growth rate has slowed compared to previous years, which could be a concern if the trend continues.

Balance Sheet

The company's debt-to-equity ratio is 1.28, reflecting a moderate level of leverage, which has improved from previous years. Return on equity is stable at 7.39%, but there is room for improvement. The equity ratio stands at 30.24%, suggesting a balanced capital structure, though slightly lower than ideal for the industry.

Cash Flow

Operating cash flow is positive, but the free cash flow remains negative, with a TTM free cash flow to net income ratio of -1.15. While there is a positive growth in free cash flow, the negative figures indicate potential liquidity challenges. The operating cash flow to net income ratio of 0.63 suggests adequate cash generation relative to net income, but improvements are needed in free cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	804.22M	748.44M	670.36M	620.70M	573.69M	564.53M
Gross Profit	460.81M	425.12M	388.43M	357.17M	318.57M	316.58M
EBITDA	314.19M	289.38M	265.23M	246.82M	219.66M	215.77M
Net Income	109.28M	93.97M	84.99M	73.83M	60.48M	61.52M
Balance Sheet
Total Assets	3.58B	4.66B	4.35B	3.76B	3.49B	3.31B
Cash, Cash Equivalents and Short-Term Investments	11.31M	11.11M	9.72M	12.34M	10.91M	5.27M
Total Debt	1.90B	1.83B	1.75B	1.66B	1.60B	1.54B
Total Liabilities	2.06B	3.29B	3.11B	2.64B	2.46B	2.39B
Stockholders Equity	1.52B	1.37B	1.23B	1.11B	1.03B	917.16M
Cash Flow
Free Cash Flow	115.42M	-185.11M	-99.89M	-78.04M	-123.77M	-110.92M
Operating Cash Flow	222.74M	195.53M	190.83M	166.20M	130.04M	104.05M
Investing Cash Flow	-476.96M	-340.10M	-322.27M	-244.33M	-260.00M	-214.26M
Financing Cash Flow	261.56M	145.96M	128.82M	78.35M	132.81M	101.53M

H2O America Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 51.81
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTO, the sentiment is Positive. The current price of 51.81 is above the 20-day moving average (MA) of 49.75, above the 50-day MA of 47.88, and above the 200-day MA of 49.76, indicating a bullish trend. The MACD of 0.88 indicates Negative momentum. The RSI at 70.66 is Negative, neither overbought nor oversold. The STOCH value of 83.99 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for HTO.

H2O America Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HTO	74 Outperform	$1.85B	16.40	7.65%	3.40%	11.39%	13.86%
AWR	70 Outperform	$2.83B	21.69	13.73%	2.64%	10.28%	13.56%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	65 Neutral	$2.60B	19.06	8.19%	2.88%	-2.60%	-33.78%
WTTR	62 Neutral	$1.35B	57.60	2.48%	2.62%	-4.60%	-67.28%
MSEX	59 Neutral	$948.07M	21.70	9.27%	2.67%	6.24%	3.35%

H2O America Corporate Events

H2O America Advances Major Quadvest Texas Utility Acquisition

On December 29, 2025, H2O America announced that its Texas subsidiary, The Texas Water Company, received appraised fair market values from three Public Utility Commission of Texas-appointed appraisers for the assets of Quadvest LP, a regulated investor-owned water and wastewater utility serving the Houston metropolitan area. Under Texas’ fair market value statute, the agreed purchase price of $483.6 million will serve as the ratemaking rate base, and TWC plans to file a Sale-Transfer-Merger application with the state regulator by mid-January to seek approval of the acquisition and certification of the rate base, marking a key step toward expanding H2O America’s footprint in the Texas water and wastewater market and potentially enhancing its regulatory and earnings profile as it targets a mid-2026 close.

The most recent analyst rating on (HTO) stock is a Hold with a $51.00 price target. To see the full list of analyst forecasts on H2O America stock, see the HTO Stock Forecast page.

H2O America Announces Board Chair Retirement

On December 9, 2025, H2O America announced that Eric W. Thornburg, the non-executive Chair of the Board of Directors, will retire effective January 31, 2026. His departure is amicable, with no disagreements regarding company operations. The Board thanked Mr. Thornburg for his service, including his previous role as President and CEO. Andrew F. Walters, the current CEO, will assume the role of Chair of the Board following Mr. Thornburg’s retirement.

The most recent analyst rating on (HTO) stock is a Hold with a $51.00 price target. To see the full list of analyst forecasts on H2O America stock, see the HTO Stock Forecast page.