Pure Cycle (PCYO) AI Stock Analysis

• Market Cap: $238.58M
• Dividend Yield: N/A
• Average Volume (3M): 46.70K
• Price to Earnings (P/E): 17.6
• Beta (1Y): 0.73
• Revenue Growth: 40.29%
• EPS Growth: 124.50%
• Country: US
• Employees: 39
• Sector: Utilities
• Sector Strength: 76
• Industry: Regulated Water
• EPS (TTM): 0.09
• Shares Outstanding: 24,074,305
• 10 Day Avg. Volume: 56,558
• 30 Day Avg. Volume: 46,695
• PEG Ratio: -3.12
• Price to Book (P/B): 1.78
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 44.34
• Enterprise Value/Market Cap: 0.96
• Enterprise Value/Revenue: 1.98
• Enterprise Value/Gross Profit: 12.51
• Enterprise Value/Ebitda: 2.81
• 1Y Price Target: $11.50
• Price Target Upside: 13.64% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 0

• Rating: 68 Neutral
• Price Target: $11.00 ▲(8.70%Upside)

Pure Cycle's overall score reflects a strong financial foundation, highlighted by robust profitability and low leverage. However, bearish technical indicators and moderate valuation temper the outlook. Positive sentiment from the earnings call and strategic corporate initiatives contribute to growth potential, but operational challenges, such as permitting delays, pose risks.

Pure Cycle Business Overview & Revenue Model

Company Description

Pure Cycle Corporation designs, constructs, operates, and maintains water and wastewater systems in the Denver metropolitan area and Colorado Front Range in the United States. It operates in two segments, Wholesale Water and Wastewater Services, and Land Development. The company engages in the wholesale water production, storage, treatment, and distribution systems; wastewater collection and treatment systems; development of master-planned community; and oil and gas leasing business. It serves domestic, commercial, and industrial customers in the Denver metropolitan region. Pure Cycle Corporation was founded in 1976 and is based in Watkins, Colorado.

How the Company Makes Money

Pure Cycle Corporation generates revenue through multiple streams, primarily focusing on water and wastewater services and real estate development. The company earns money by providing water and wastewater services to municipal, commercial, and industrial customers. This includes water delivery, wastewater treatment, and infrastructure management. Revenue is also derived from its real estate development activities, where the company develops and sells residential and commercial land plots, leveraging its extensive land holdings. Additionally, Pure Cycle may form strategic partnerships or joint ventures to enhance its service offerings and expand its market reach, contributing to its overall earnings. The integration of water resource management with real estate development allows Pure Cycle to capitalize on the growing demand for sustainable infrastructure solutions in water-scarce regions.

Pure Cycle Financial Statement Overview

Summary

Pure Cycle exhibits strong financial health with impressive profitability and efficient operations. While there is a slight concern over recent revenue contraction, the company maintains a robust balance sheet with minimal leverage and strong equity support. Cash flow generation is improving, yet there is potential for enhanced cash conversion efficiencies.

Income Statement

Pure Cycle has demonstrated commendable financial performance with a strong gross profit margin of 66.41% and a robust net profit margin of 54.94% for TTM, signaling efficiency in converting sales into actual profit. However, the revenue growth trajectory shows a decline of 4.52% in the past year, indicating potential challenges in top-line expansion. Despite this, the company maintains healthy EBIT and EBITDA margins of 34.66% and 75.53% respectively, reflecting solid operational efficiency.

Balance Sheet

The company's balance sheet is strong, with a low debt-to-equity ratio of 0.0026, underscoring minimal leverage risk. The equity ratio of 90.07% signifies a solid asset base funded largely by equity, enhancing financial stability. Return on equity stands impressively at 11.03%, indicating effective utilization of shareholder funds to generate profits.

Cash Flow

The cash flow statement reveals positive developments, with a significant improvement in free cash flow to $5.48M, demonstrating 1290% growth from a negative base last year. The operating cash flow to net income ratio of 0.45 and free cash flow to net income ratio of 0.36 indicate effective cash generation relative to net income, though there is room for better alignment.

Breakdown	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement
Total Revenue	28.75M	14.59M	23.00M	17.13M	25.86M
Gross Profit	19.76M	8.04M	16.37M	10.72M	7.54M
EBITDA	18.17M	8.58M	14.92M	28.36M	10.64M
Net Income	11.61M	4.70M	9.62M	20.11M	6.75M
Balance Sheet
Total Assets	147.35M	133.22M	129.23M	117.18M	89.76M
Cash, Cash Equivalents and Short-Term Investments	22.11M	26.01M	34.89M	20.12M	21.80M
Total Debt	7.04M	7.28M	4.10M	121.00K	120.28K
Total Liabilities	17.65M	14.98M	16.23M	14.44M	7.72M
Stockholders Equity	129.70M	118.23M	113.00M	102.74M	82.04M
Cash Flow
Free Cash Flow	-461.00K	-10.15M	11.63M	560.00K	12.09M
Operating Cash Flow	2.21M	-2.34M	17.45M	3.46M	20.72M
Investing Cash Flow	-4.73M	-9.24M	-6.67M	-2.90M	-3.45M
Financing Cash Flow	-612.00K	2.85M	3.99M	87.00K	44.78K

Pure Cycle Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 10.12
• 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 10.12 is below the 20-day moving average (MA) of 10.40, below the 50-day MA of 10.45, and below the 200-day MA of 11.25, indicating a bearish trend. The MACD of -0.13 indicates Positive momentum. The RSI at 44.99 is Neutral, neither overbought nor oversold. The STOCH value of 17.00 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	71 Outperform	$343.97M	16.15	9.04%	3.65%	8.31%	21.97%
CWCO	69 Neutral	$473.04M	17.95	7.83%	1.58%	-31.57%	-18.12%
PCYO	68 Neutral	$238.58M	17.56	10.47%	―	40.29%	124.50%
GWRS	61 Neutral	$281.92M	44.62	9.11%	2.95%	3.94%	-8.78%
YORW	58 Neutral	$446.55M	22.89	8.63%	2.80%	3.45%	-19.90%
Sector *	57 Neutral	AU$887.24M	4.31	-2.37%	5.07%	21.41%	-109.15%
CDZI	53 Neutral	$243.99M	―	-84.03%	―	283.67%	-11.36%

Pure Cycle Corporate Events

Pure Cycle Reports Strong Quarterly Financial Results

On July 9, 2025, Pure Cycle Corporation announced financial results for the three and nine months ended May 31, 2025, reporting a net income of $2.3 million for the quarter, marking its 24th consecutive profitable quarter. The company continues to develop its Sky Ranch community, with significant progress in various phases, and anticipates delivering finished lots by the end of fiscal 2025. Despite market volatility, Pure Cycle’s focus on entry-level lots and strategic partnerships with national homebuilders have positioned it well in the Denver market. The company also reported increased royalty revenues from its oil and gas interests and emphasized its strong balance sheet and capital management strategy aimed at growth and shareholder returns.