Pure Cycle (PCYO) AI Stock Analysis

• Market Cap: $263.64M
• Dividend Yield: N/A
• Average Volume (3M): 79.16K
• Price to Earnings (P/E): 18.8
• Beta (1Y): 0.77
• Revenue Growth: 58.77%
• EPS Growth: 116.91%
• Country: US
• Employees: 39
• Sector: Utilities
• Sector Strength: 80
• Industry: Regulated Water
• EPS (TTM): 0.03
• Shares Outstanding: 24,076,305
• 10 Day Avg. Volume: 44,869
• 30 Day Avg. Volume: 79,157
• PEG Ratio: 1.64
• Price to Book (P/B): 1.86
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 38.13
• 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's strong financial performance and promising earnings outlook underpin a favorable stock score. While technical indicators suggest cautious optimism, the company’s valuation remains fair. Key strengths include the company's robust margins, low leverage, and strategic growth initiatives, which are slightly offset by moderate technical signals and the absence of a dividend.

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. 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 exhibits a strong financial profile with consistent revenue and profit growth, robust margins, and a solid balance sheet with low leverage. Effective cash management and operational efficiency are evident, although there's room for improvement in return on equity.

Income Statement

Pure Cycle demonstrates strong financial performance with consistent revenue growth, notably a 3.9% increase in TTM revenue compared to the previous year, and a substantial gross profit margin of 65.8% in the TTM period. The company also maintains healthy profitability with a net profit margin of 51.1% and an EBIT margin of 37.6%. These metrics indicate robust operational efficiency and profitability.

Balance Sheet

The balance sheet reflects a solid financial position with a low debt-to-equity ratio of 0.0023, suggesting minimal reliance on debt financing. The equity ratio stands at 89.8%, indicating strong equity financing. However, the return on equity is moderate at 11.4%, suggesting room for improvement in generating returns from shareholders' equity.

Cash Flow

Cash flow analysis reveals positive developments with a significant turnaround in free cash flow, growing from a negative position to $6.49 million in the TTM period. The operating cash flow to net income ratio is favorable at 0.53, showing efficient cash conversion. Additionally, free cash flow to net income ratio of 0.43 indicates strong cash generation relative to net income.

Breakdown
TTM	Sep 2024	Sep 2023	Sep 2022	Sep 2021	Sep 2020
Income Statement		Total Revenue
29.91M	28.75M	14.59M	23.00M	17.13M	25.86M
	Gross Profit
19.68M	19.76M	8.04M	16.37M	10.72M	7.54M
	EBIT
11.25M	12.24M	2.07M	10.10M	5.27M	4.36M
	EBITDA
21.62M	18.17M	8.58M	14.92M	28.36M	10.64M
	Net Income Common Stockholders
14.18M	11.61M	4.70M	9.62M	20.11M	6.75M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
16.80M	22.11M	26.01M	34.89M	20.12M	21.80M
	Total Assets
149.66M	147.35M	133.22M	129.23M	117.18M	89.76M
	Total Debt
7.01M	7.04M	7.28M	4.10M	121.00K	120.28K
	Net Debt
-9.79M	-15.07M	-18.74M	-30.80M	-20.00M	-21.68M
	Total Liabilities
15.24M	17.65M	14.98M	16.23M	14.44M	7.72M
	Stockholders Equity
134.41M	129.70M	118.23M	113.00M	102.74M	82.04M
Cash Flow		Free Cash Flow
6.55M	-461.00K	-10.15M	11.63M	560.00K	12.09M
	Operating Cash Flow
8.12M	2.21M	-2.34M	17.45M	3.46M	20.72M
	Investing Cash Flow
-8.66M	-4.73M	-9.24M	-6.67M	-2.90M	-3.45M
	Financing Cash Flow
-617.00K	-612.00K	2.85M	3.99M	87.00K	44.78K

Pure Cycle Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.03
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For PCYO, the sentiment is Positive. The current price of 11.03 is above the 20-day moving average (MA) of 10.36, above the 50-day MA of 10.42, and below the 200-day MA of 11.22, indicating a neutral trend. The MACD of 0.13 indicates Negative momentum. The RSI at 62.89 is Neutral, neither overbought nor oversold. The STOCH value of 94.06 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for PCYO.

Pure Cycle Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
PCYO	77 Outperform	$263.64M	18.76	11.12%	―	58.77%	116.91%
ARTNA	74 Outperform	$351.35M	16.40	9.04%	3.50%	8.31%	21.97%
CWCO	69 Neutral	$428.80M	16.23	7.83%	1.58%	-31.57%	-18.12%
Sector *	63 Neutral	$8.57B	10.13	4.66%	4.38%	3.79%	-12.91%
GWRS	61 Neutral	$287.69M	44.53	9.11%	2.88%	3.94%	-8.78%
YORW	58 Neutral	$481.83M	24.05	8.63%	2.57%	3.45%	-19.90%
CDZI	50 Neutral	$232.53M	―	-84.03%	―	283.67%	-11.36%

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.