Pure Cycle (PCYO) AI Stock Analysis

• Market Cap: $280.17M
• Dividend Yield: N/A
• Average Volume (3M): 46.66K
• Price to Earnings (P/E): 20.4
• Beta (1Y): 0.66
• Revenue Growth: -9.25%
• EPS Growth: 12.89%
• Country: US
• Employees: 39
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.19
• Shares Outstanding: 24,090,605
• 10 Day Avg. Volume: 55,734
• 30 Day Avg. Volume: 46,656
• PEG Ratio: 1.48
• Price to Book (P/B): 1.70
• Price to Sales (P/S): 9.32
• P/FCF Ratio: 65.88
• Enterprise Value/Market Cap: 0.93
• Enterprise Value/Revenue: 8.83
• Enterprise Value/Gross Profit: 14.98
• Enterprise Value/Ebitda: 12.36
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 74 Outperform
• Price Target: $13.00 ▲(14.04% Upside)

PCYO scores well primarily on financial strength (very conservative balance sheet and strong reported profitability), supported by generally constructive technicals and a positive earnings call with reiterated FY2026 guidance. The main constraints on the score are cash-flow predictability/earnings conversion, valuation that is not obviously cheap (P/E ~20.6), and business timing volatility (notably oil & gas water and dependence on longer-dated interchange-driven upside).

Positive Factors

Balance sheet strength

Exceptionally low leverage and a large equity base provide durable financial flexibility for Pure Cycle. This supports continued investment in water infrastructure, land development and share repurchases while reducing bankruptcy risk and enabling the company to fund multi-year projects without reliance on external debt.

Recurring revenue growth

A 22% CAGR in metered water customers strengthens the recurring revenue mix, improving predictability and supporting stable cash flows over time. Durable customer growth in utilities underpins long-term service fees and creates a base for cross-selling rentals and development-related utility services.

Significant unused capacity

Very low utilization versus installed water capacity gives Pure Cycle scalable supply to capture new residential, commercial or industrial demand without heavy incremental capex. This latent capacity is a structural advantage that can accelerate revenue growth as regional demand or large customers materialize.

Negative Factors

Cash flow volatility

Moderate cash conversion and historical volatility in operating and free cash flow reduce confidence in earnings sustainability and the company’s ability to self-fund development. Irregular cash generation can constrain timing of capex, development milestones and limit organic funding for commercial build-outs over multi-year horizons.

Interchange permitting dependency

A material portion of future commercial value and public‑improvement receivables depends on interchange permitting and construction. Delays or municipal setbacks would push out realization of higher‑margin commercial revenues and materially extend the timeline for value capture tied to Phase 3 development.

Industrial water revenue lumpiness

Reliance on oil & gas water deliveries creates quarter-to-quarter revenue swings and forecasting difficulty. Structural cyclicality in fracking activity can amplify volatility in margins and cash flow, complicating capital planning and reducing predictability of utility segment contributions over multi-year timelines.

Pure Cycle Business Overview & Revenue Model

Company Description

Pure Cycle Corporation (PCYO) is a water resource management company based in the United States, primarily focused on the development of water supply and wastewater treatment solutions. The company operates in the water utilities sector and specializes in providing high-quality water services to municipalities and residential communities. Its core products and services include water supply, treatment, and distribution, as well as wastewater management, ensuring sustainable and efficient water use in various markets.

How the Company Makes Money

Pure Cycle generates revenue through multiple streams, primarily by charging municipalities and residential developers for water supply and treatment services. The company often enters into long-term contracts with these clients, providing stable and recurring revenue. Additionally, PCYO may earn money through the sale of water rights and by providing consulting services related to water management. Significant partnerships with local governments and developers enhance its market reach and provide opportunities for project-based revenue. The company's earnings are also influenced by regulatory factors and demand for water resources in its operational regions.

Pure Cycle Financial Statement Overview

Summary

Strong overall financial quality driven by an exceptionally conservative balance sheet (very low leverage) and strong reported profitability. The main offset is weaker and more volatile cash-flow conversion and historical cash-flow inconsistency, which reduces confidence in earnings durability.

Income Statement

TTM (Trailing-Twelve-Months) revenue grew ~13% with very strong profitability (gross margin ~59% and net margin ~57%), and EBIT margin remains healthy. However, growth has been choppy across recent annual periods (including revenue declines in 2023 and 2025 annual data), and some historical margins look unusually elevated, suggesting earnings can be influenced by non-recurring items and may be less predictable than a typical steady regulated profile.

Balance Sheet

Balance sheet is a clear strength: leverage is extremely low (TTM debt-to-equity ~0.003) with a large equity base and expanding asset/equity levels over time. Returns on equity are solid in TTM (~11.9%) and have generally improved versus earlier years, though they have varied meaningfully year to year, indicating profitability can swing even with low balance-sheet risk.

Cash Flow

Cash generation is the main mixed area. In TTM (Trailing-Twelve-Months), operating cash flow is positive (~$6.5M) and free cash flow is positive (~$3.0M), but free cash flow declined (~-19%) and cash conversion is only moderate (operating cash flow is ~0.57x net income and free cash flow is ~46% of net income). Prior years show material volatility, including periods of negative operating cash flow and negative free cash flow, which raises confidence risk around the durability of cash generation.

Breakdown	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	26.09M	28.75M	14.59M	23.00M	17.13M
Gross Profit	16.03M	19.76M	8.04M	16.37M	10.72M
EBITDA	20.19M	18.17M	8.58M	14.92M	28.36M
Net Income	13.11M	11.61M	4.70M	9.62M	20.11M
Balance Sheet
Total Assets	162.28M	147.35M	133.22M	129.23M	117.18M
Cash, Cash Equivalents and Short-Term Investments	21.93M	22.11M	26.01M	34.89M	20.12M
Total Debt	6.79M	7.04M	7.28M	4.10M	121.00K
Total Liabilities	19.54M	17.65M	14.98M	16.23M	14.44M
Stockholders Equity	142.74M	129.70M	118.23M	113.00M	102.74M
Cash Flow
Free Cash Flow	3.69M	-461.00K	-10.15M	11.78M	560.00K
Operating Cash Flow	13.16M	2.21M	-2.34M	17.45M	3.46M
Investing Cash Flow	-9.65M	-4.73M	-9.24M	-6.67M	-2.90M
Financing Cash Flow	-491.00K	-612.00K	2.85M	3.99M	87.00K

Pure Cycle Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 11.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• 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 11.4 is above the 20-day moving average (MA) of 11.18, above the 50-day MA of 11.26, and above the 200-day MA of 10.70, indicating a bullish trend. The MACD of 0.04 indicates Negative momentum. The RSI at 58.52 is Neutral, neither overbought nor oversold. The STOCH value of 85.96 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	74 Outperform	$280.17M	20.45	9.62%	―	-9.25%	12.89%
ARTNA	70 Outperform	$352.70M	15.60	9.25%	3.87%	5.80%	12.33%
YORW	69 Neutral	$489.91M	24.38	8.58%	2.68%	3.63%	-5.82%
CWCO	68 Neutral	$596.79M	35.62	8.10%	1.40%	-17.62%	-54.25%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
GWRS	58 Neutral	$254.44M	54.13	6.30%	3.56%	7.06%	-38.94%
CDZI	55 Neutral	$575.12M	-14.15	-136.36%	―	188.33%	4.12%

Pure Cycle Corporate Events

Pure Cycle Adds Maran Representative to Board, Forms Committee

On January 14, 2026, Pure Cycle entered into a cooperation agreement with major shareholder Maran Capital Management, which holds about 14.7% of its common stock, to expand its board from seven to eight directors and appoint Maran President Daniel J. Roller as an independent director following the 2026 annual meeting. Roller, deemed independent under Nasdaq rules, was appointed that day, named chair of a newly formed Strategy and Capital Allocation Committee and added to the Nominating and Corporate Governance Committee, with Maran agreeing to customary standstill and voting commitments through a defined period and gaining the right to recommend a replacement director under certain circumstances. At the January 14, 2026 annual meeting, shareholders elected all incumbent director nominees, ratified the appointment of Forvis Mazars as auditor for fiscal 2026, approved executive compensation on an advisory basis, and backed holding say-on-pay votes annually, reinforcing the existing governance framework as the company brings in an influential shareholder representative to help shape strategy and capital allocation around its water, land development and rental assets.

The most recent analyst rating on (PCYO) stock is a Buy with a $12.50 price target. To see the full list of analyst forecasts on Pure Cycle stock, see the PCYO Stock Forecast page.

Pure Cycle Posts Strong Quarterly Growth Driven by Sky Ranch

On January 7, 2026, Pure Cycle reported results for the quarter ended November 30, 2025, posting net income of about $4.6 million, up 16% from a year earlier, on revenue of $9.1 million, a 59% increase, marking its 26th consecutive profitable quarter and earnings of $0.19 per diluted share. Growth was driven largely by land development revenue at Sky Ranch, where the company completed remaining lots in Phase 2C, advanced Phase 2D with new homebuilder partners, and began platting 159 lots in Phase 2E, even as EBITDA declined 12% and water deliveries to oil and gas customers fell due to reduced drilling activity; Pure Cycle also expanded its single-family rental portfolio to 19 homes, continued share repurchases supported by $17.1 million in cash and $14.8 million in working capital, and highlighted coming community enhancements, including a charter high school and a new I-70 interchange, underscoring its strategy to balance growth in recurring utility and rental revenues with ongoing residential and commercial build-out at Sky Ranch.

The most recent analyst rating on (PCYO) stock is a Buy with a $13.00 price target. To see the full list of analyst forecasts on Pure Cycle stock, see the PCYO Stock Forecast page.

Pure Cycle Reports Fiscal Year 2025 Financial Results

On November 12, 2025, Pure Cycle Corporation announced its financial results for the fiscal year ending August 31, 2025, reporting a net income of $13.1 million, a 13% increase from the previous year. The company achieved this growth through its strategic partnerships with national homebuilders at Sky Ranch and a significant increase in oil and gas royalty income. Despite a 9% decrease in overall revenue, Pure Cycle’s diversified business model, including land development and water utilities, continues to deliver high-margin recurring revenues, positioning it as a leading land developer in the region.

The most recent analyst rating on (PCYO) stock is a Buy with a $12.50 price target. To see the full list of analyst forecasts on Pure Cycle stock, see the PCYO Stock Forecast page.