H2O America (HTO) AI Stock Analysis

• Market Cap: $1.77B
• Dividend Yield: 1.67%
• Average Volume (3M): 238.12K
• Price to Earnings (P/E): 16.4
• Beta (1Y): 0.23
• Revenue Growth: 12.40%
• EPS Growth: 11.98%
• Country: US
• Employees: 822
• Sector: Utilities
• Sector Strength: 87
• Industry: Regulated Water
• EPS (TTM): 0.71
• Shares Outstanding: 35,287,080
• 10 Day Avg. Volume: 241,164
• 30 Day Avg. Volume: 238,123
• 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: 2.08
• Enterprise Value/Revenue: 4.65
• Enterprise Value/Gross Profit: 8.19
• Enterprise Value/Ebitda: 12.11
• 1Y Price Target: $58.25
• Price Target Upside: 16.97% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 4

• Rating: 68 Neutral
• Price Target: $55.00 ▲(10.44% Upside)

H2O America's overall stock score reflects strong earnings performance and strategic expansion through acquisitions. However, challenges in cash flow management and technical indicators suggest caution. The company's valuation and dividend yield provide a solid foundation, but improvements in financial leverage and cash flow are necessary for a higher score.

Positive Factors

Acquisition

HTO's acquisition of Quadvest provides strategic exposure to the rapidly-growing Houston metropolitan service territories and offers significant capex opportunities.

Earnings Growth

1Q25 adjusted EPS increased 39% driven by the timing of rate relief, primarily from the California general rate case.

Leadership and Credibility

CFO Andrew Walters, considered a capable leader, will take over as CEO, with improved financial execution and communication enhancing the company's credibility.

Negative Factors

Equity Issuance

HTO will see dilutive EPS impacts from unrecovered financing costs due to a significant equity issuance and higher D&A expenses.

Financing Risks

There are financing risks for SJW, including a forecasted need for $425 million in equity over the 2025-2029 period, which is about 25% of the current market cap.

H2O America Business Overview & Revenue Model

Company Description

H2O America (HTO) is a leading provider of innovative water filtration and purification solutions, catering primarily to residential, commercial, and industrial sectors. The company specializes in a range of products including water filtration systems, reverse osmosis units, and water softeners, designed to improve water quality and safety. H2O America is committed to sustainability and aims to provide accessible clean water solutions while promoting environmental responsibility.

How the Company Makes Money

H2O America generates revenue through multiple streams, primarily by selling its water filtration and purification products directly to consumers and businesses. The company also offers installation and maintenance services, which provide a recurring revenue opportunity. Additionally, H2O America may engage in partnerships with retailers and distributors to expand its market reach, leveraging these relationships to drive sales. The company may also explore subscription-based models for filter replacements and maintenance services, ensuring steady cash flow while fostering customer loyalty.

H2O America Financial Statement Overview

Summary

H2O America shows strong revenue growth and effective operational management with stable net income margins. However, the moderately high debt-to-equity ratio and negative free cash flow due to capital expenditures pose risks.

Income Statement

H2O America has shown consistent revenue growth with a notable increase from $564.5M in 2020 to $766.7M in TTM (Trailing-Twelve-Months) 2025, reflecting a robust Revenue Growth Rate. The Gross Profit Margin remains strong at approximately 56.8%. The Net Profit Margin has been stable, with a recent TTM value of around 12.9%. EBIT and EBITDA margins indicate solid operational performance, though there is a slight decline in EBITDA margin due to increased expenses.

Balance Sheet

The company's Debt-to-Equity Ratio is moderately high, indicating leverage levels that should be monitored closely. Stockholders' Equity has been growing steadily, contributing to a reasonable Equity Ratio of 29.5% in the TTM period. ROE is healthy, driven by consistent net income growth, but the increasing debt burden presents a potential risk.

Cash Flow

Operating Cash Flow remains strong, though Free Cash Flow is negative, primarily due to significant capital expenditures for growth. The Operating Cash Flow to Net Income Ratio is positive, indicating good cash conversion efficiency. However, the Free Cash Flow to Net Income Ratio is negative, highlighting the impact of high capital investments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	788.74M	748.44M	670.36M	620.70M	573.69M	564.53M
Gross Profit	447.44M	425.12M	388.43M	357.17M	318.57M	316.58M
EBITDA	302.67M	289.38M	265.23M	246.82M	219.66M	215.77M
Net Income	102.80M	93.97M	84.99M	73.83M	60.48M	61.52M
Balance Sheet
Total Assets	4.85B	4.66B	4.35B	3.76B	3.49B	3.31B
Cash, Cash Equivalents and Short-Term Investments	19.85M	11.11M	9.72M	12.34M	10.91M	5.27M
Total Debt	1.87B	1.83B	1.75B	1.66B	1.60B	1.54B
Total Liabilities	3.38B	3.29B	3.11B	2.64B	2.46B	2.39B
Stockholders Equity	1.47B	1.37B	1.23B	1.11B	1.03B	917.16M
Cash Flow
Free Cash Flow	-227.92M	-185.11M	-99.89M	-78.04M	-123.77M	-110.92M
Operating Cash Flow	199.01M	195.53M	190.83M	166.20M	130.04M	104.05M
Investing Cash Flow	-426.99M	-340.10M	-322.27M	-244.33M	-260.00M	-214.26M
Financing Cash Flow	225.02M	145.96M	128.82M	78.35M	132.81M	101.53M

H2O America Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 49.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HTO, the sentiment is Neutral. The current price of 49.8 is above the 20-day moving average (MA) of 49.29, below the 50-day MA of 50.78, and below the 200-day MA of 51.43, indicating a neutral trend. The MACD of -0.20 indicates Negative momentum. The RSI at 49.37 is Neutral, neither overbought nor oversold. The STOCH value of 63.62 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for HTO.

H2O America Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARTNA	74 Outperform	$351.04M	15.67	9.34%	3.65%	7.13%	22.19%
HTO	68 Neutral	$1.77B	16.39	7.50%	1.67%	12.40%	11.98%
CWT	68 Neutral	$2.76B	20.25	8.49%	2.63%	0.62%	-24.24%
AWR	66 Neutral	$2.90B	23.11	13.77%	2.52%	8.55%	13.57%
MSEX	65 Neutral	$955.42M	22.00	9.70%	2.56%	11.91%	16.88%
Sector *	62 Neutral	HK$30.30B	9.31	5.05%	4.61%	-3.25%	1.36%
YORW	61 Neutral	$442.30M	22.38	8.56%	2.83%	4.09%	-14.30%

H2O America Corporate Events

H2O America Acquires Quadvest Assets for $540 Million

On July 7, 2025, H2O America, through its subsidiaries, entered into agreements to acquire the assets of Quadvest’s water and sewer utility businesses for a total of $540 million. This strategic acquisition is expected to significantly expand H2O America’s presence in Texas, particularly in the high-growth Houston region, and is projected to be accretive to the company’s long-term EPS growth rate. The transaction, which requires regulatory approvals, aims to enhance operational scale and customer service, positioning H2O America as the second largest investor-owned water utility in Texas by 2028.

The most recent analyst rating on (HTO) stock is a Hold with a $63.00 price target. To see the full list of analyst forecasts on H2O America stock, see the HTO Stock Forecast page.

H2O America Appoints New Chief Accounting Officer

On June 24, 2025, H2O America announced the appointment of Megan Mattern as the Chief Accounting Officer, Principal Accounting Officer, and Controller, effective July 28, 2025. This strategic appointment follows the recent designation of Ann P. Kelly as Chief Financial Officer and Treasurer, highlighting a significant leadership transition within the company. Mattern brings extensive experience from her previous roles at UGI Corporation and PPL Corporation. The Executive Compensation Committee approved a comprehensive compensation package for Mattern, including a base salary, incentive cash compensation, and restricted stock unit awards, aligning with the company’s long-term incentive plan.

The most recent analyst rating on (HTO) stock is a Hold with a $63.00 price target. To see the full list of analyst forecasts on H2O America stock, see the HTO Stock Forecast page.

H2O America Announces Leadership Changes and CEO Transition

On May 14, 2025, H2O America announced several key changes effective July 1, 2025, including the appointment of Andrew F. Walters as a new board member and the transition of Mr. Walters to Chief Executive Officer following Eric W. Thornburg’s retirement. Additionally, the company held its 2025 stockholders’ meeting, where stockholders approved the election of directors, executive compensation, and the appointment of Deloitte & Touche LLP as the independent registered public accounting firm for the fiscal year ending December 31, 2025.

The most recent analyst rating on (HTO) stock is a Hold with a $63.00 price target. To see the full list of analyst forecasts on H2O America stock, see the HTO Stock Forecast page.