Pure Cycle (PCYO) AI Stock Analysis

• Market Cap: $237.39M
• Dividend Yield: N/A
• Average Volume (3M): 43.08K
• Price to Earnings (P/E): 17.0
• Beta (1Y): 0.81
• Revenue Growth: 58.77%
• EPS Growth: 116.91%
• Country: US
• Employees: 39
• Sector: Utilities
• Sector Strength: 85
• Industry: Regulated Water
• EPS (TTM): 0.03
• Shares Outstanding: 24,076,305
• 10 Day Avg. Volume: 54,327
• 30 Day Avg. Volume: 43,077
• PEG Ratio: N/A
• Price to Book (P/B): N/A
• Price to Sales (P/S): 8.86
• Price to Cash Flow (P/CF): 11.40
• P/FCF Ratio: 12.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

Pure Cycle exhibits solid financial health with strong revenue and profit growth and a solid balance sheet. However, technical indicators show bearish sentiments, suggesting caution in the short term. While the P/E ratio is reasonable, the lack of dividends may deter income-focused investors. Positive earnings call and strategic focus bolster the long-term outlook, despite seasonal challenges and segment-specific weaknesses.

Pure Cycle Business Overview & Revenue Model

Company Description

Pure Cycle Corporation (PCYO) operates in the water and land resource sectors, focusing on providing innovative solutions for water and wastewater services primarily in Colorado. The company is engaged in a range of activities including the development and management of water rights, and the provision of water and wastewater services to residential and commercial customers. Additionally, Pure Cycle is involved in real estate development, leveraging its land holdings to create sustainable communities.

How the Company Makes Money

Pure Cycle Corporation generates revenue through multiple streams. The primary source of income is the provision of water and wastewater services to its customers, which include residential, commercial, and industrial clients. These services are offered under long-term contracts, providing a stable revenue base. The company also derives income from its real estate activities by developing and selling residential and commercial land parcels. Furthermore, Pure Cycle holds valuable water rights, which it can lease or sell to municipalities and other entities, contributing significantly to its earnings. Strategic partnerships with local governments and real estate developers also play a crucial role in the company's ability to monetize its assets effectively.

Pure Cycle Financial Statement Overview

Summary

Pure Cycle demonstrates strong financial health with robust profitability, a solid balance sheet, and improving cash flow generation. The company exhibits good growth potential, though it faces some volatility in revenue and continued investment outflows that require careful management.

Income Statement

Pure Cycle has shown strong revenue growth, with a significant increase from the previous periods. Gross and net profit margins are strong, indicating efficient cost management and profitability. The EBIT and EBITDA margins are also robust, reflecting solid operational performance. However, the revenue growth rate has been volatile over the years, which may indicate potential fluctuations in income streams.

Balance Sheet

The balance sheet shows a solid equity base with a low debt-to-equity ratio, indicating financial stability and low leverage risk. The return on equity is healthy, suggesting good returns to shareholders. The equity ratio is strong, demonstrating a high proportion of assets financed by equity rather than debt. However, there is a slight increase in liabilities that should be monitored.

Cash Flow

The company has improved its free cash flow position, transitioning from negative to positive, indicating better cash generation capabilities. The operating cash flow to net income ratio is favorable, showing good conversion of income into cash. However, the cash flow from investing activities remains negative, reflecting ongoing investment that could strain cash reserves if not managed.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
29.11M	28.75M	14.59M	23.00M	17.13M	25.86M
	Gross Profit
19.78M	19.76M	8.04M	16.37M	10.72M	7.54M
	EBIT
12.21M	12.24M	2.07M	10.10M	5.27M	4.36M
	EBITDA
20.59M	18.17M	8.58M	14.92M	28.36M	10.64M
	Net Income Common Stockholders
13.48M	11.61M	4.70M	9.62M	20.11M	6.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
2.91M	22.11M	26.01M	34.89M	20.12M	21.80M
	Total Assets
107.14M	147.35M	133.22M	129.23M	117.18M	89.76M
	Total Debt
60.52M	7.04M	7.28M	4.10M	121.00K	120.28K
	Net Debt
59.63M	-15.07M	-18.74M	-30.80M	-20.00M	-21.68M
	Total Liabilities
62.12M	17.65M	14.98M	16.23M	14.44M	7.72M
	Stockholders Equity
45.01M	129.70M	118.23M	113.00M	102.74M	82.04M
Cash Flow		Free Cash Flow
6.98M	-461.00K	-10.15M	11.63M	560.00K	12.09M
	Operating Cash Flow
9.11M	2.21M	-2.34M	17.45M	3.46M	20.72M
	Investing Cash Flow
-8.89M	-4.73M	-9.24M	-6.67M	-2.90M	-3.45M
	Financing Cash Flow
-519.00K	-612.00K	2.85M	3.99M	87.00K	44.78K

Pure Cycle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.01
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCYO, the sentiment is Negative. The current price of 10.01 is below the 20-day moving average (MA) of 10.45, below the 50-day MA of 11.00, and below the 200-day MA of 11.21, indicating a bearish trend. The MACD of -0.25 indicates Positive momentum. The RSI at 40.54 is Neutral, neither overbought nor oversold. The STOCH value of 19.25 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for PCYO.

Pure Cycle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ARTNA	76 Outperform	$355.35M	17.52	8.69%	3.44%	9.20%	18.90%
PCYO	75 Outperform	$237.39M	17.03	11.12%	―	58.77%	116.91%
GWRS	66 Neutral	$281.87M	43.12	12.03%	2.97%	-0.63%	-28.00%
CWCO	63 Neutral	$380.52M	23.75	9.01%	1.71%	-25.66%	-5.11%
Sector *	63 Neutral	$9.19B	11.97	6.86%	4.40%	4.23%	-11.24%
YORW	61 Neutral	$504.35M	24.74	8.99%	2.51%	5.53%	-14.72%
CDZI	41 Neutral	$212.64M	―	-84.24%	―	382.57%	5.98%

Pure Cycle Corporate Events

Pure Cycle Reports Positive Q2 2025 Financial Results

On April 9, 2025, Pure Cycle Corporation announced its financial results for the three and six months ended February 28, 2025, marking its twenty-third consecutive quarter of positive net income. The company continues to progress in the development of the Sky Ranch community, with significant advancements in various phases of construction and an increase in royalty revenues from its oil and gas interests. Despite seasonal slowdowns, Pure Cycle reported revenues of $4.0 million and $9.7 million for the quarter and year-to-date, respectively, and maintained a strong balance sheet with $16.8 million in cash and equivalents. The company’s strategic focus remains on growth and shareholder returns, with ongoing investments in development projects and a share repurchase program.

Spark’s Take on PCYO Stock

According to Spark, TipRanks’ AI Analyst, PCYO is a Neutral.

Pure Cycle Corporation shows strong financial performance, with notable revenue and profit growth. However, technical indicators suggest bearish market sentiment, which could affect short-term stock performance. While the company’s valuation appears fair, the lack of a dividend may limit its appeal to income investors. The recent positive earnings call highlights growth prospects, but potential weaknesses in key segments need monitoring.

To see Spark’s full report on PCYO stock, click here.