Companhia De Saneamento (SBS) AI Stock Analysis

• Market Cap: $17.16B
• Dividend Yield: 2.22%
• Average Volume (3M): 1.07M
• Price to Earnings (P/E): 14.0
• Beta (1Y): 0.45
• Revenue Growth: -10.23%
• EPS Growth: -26.87%
• Country: US
• Employees: 10,552
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.58
• Shares Outstanding: 703,773,860
• 10 Day Avg. Volume: 857,259
• 30 Day Avg. Volume: 1,069,517
• PEG Ratio: 0.04
• Price to Book (P/B): 1.64
• Price to Sales (P/S): 1.68
• P/FCF Ratio: 8.31
• Enterprise Value/Market Cap: 1.25
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 1.47
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: $29.50
• Price Target Upside: 20.31% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 71 Outperform
• Price Target: $29.00 ▲(18.27% Upside)

The overall stock score is driven by strong financial performance and positive technical indicators. The company's stable balance sheet and robust cash flow generation are significant strengths. While valuation is reasonable, the recent decline in revenue growth is a concern that needs addressing to sustain long-term growth.

Positive Factors

Regulatory Rate Adjustment

The approved rate adjustment enhances SBS's revenue potential, supporting financial performance and market positioning in the regulated sector.

Asset Base Validation

Validation of the Regulatory Asset Base ensures financial clarity and supports strategic planning, crucial for future investments and operational strategies.

Strategic Acquisition

The acquisition of EMAE enhances SBS's water management and energy integration capabilities, supporting long-term growth and sustainability.

Negative Factors

Revenue Decline

A decline in revenue growth poses challenges for sustaining long-term growth, necessitating strategic initiatives to reverse this trend.

Decreased Return on Equity

A decrease in ROE indicates reduced efficiency in generating shareholder returns, potentially impacting investor confidence and financial health.

Net Income Decrease

A decrease in net income affects profitability, highlighting the need for strategic adjustments to improve financial performance and stability.

Companhia De Saneamento Business Overview & Revenue Model

Company Description

Companhia de Saneamento Básico do Estado de São Paulo – SABESP provides water and sewage services to residential, commercial, industrial, and governmental customers. It provides water supply, sanitary sewage, urban rainwater management and drainage, urban cleaning, and solid waste management services, as well as related activities, including the planning, operation, maintenance, and commercialization of energy. As of December 31, 2021, the company provided water services through 9.8 million water connections to approximately 27.8 million people; sewage services through 8.4 million sewage connections to approximately 24.6 million people; and operated 88,904 kilometers of water pipes and water transmission lines, as well as 61,122 kilometers of sewer lines. It also offers water and/or sewage services to four other municipalities through special purpose companies. The company was founded in 1954 and is headquartered in São Paulo, Brazil.

How the Company Makes Money

SBS generates revenue primarily through the sale of water and sanitation services to residential, commercial, and industrial customers. The company operates on a regulated pricing model, where rates are set by government authorities based on operational costs and infrastructure investments. Key revenue streams include monthly billing for water consumption, sewage treatment fees, and various connection and service fees. Additionally, SBS may engage in public-private partnerships and government contracts for infrastructure projects, which contribute to its earnings by providing funding for expansion and modernization of services.

Companhia De Saneamento Financial Statement Overview

Summary

Companhia De Saneamento demonstrates strong profitability and cash flow generation, despite recent challenges in revenue growth. The balance sheet remains stable with a reasonable leverage level. The company should focus on reversing the revenue decline to sustain long-term growth.

Income Statement

The income statement shows a mixed performance. The TTM data indicates a decline in revenue growth by 11.9%, which is concerning. However, the company maintains strong profitability with a net profit margin of 20.8% and an EBIT margin of 35.7% in the TTM period. The historical data shows fluctuating revenue growth with a peak in 2024, but the recent downturn suggests potential challenges in maintaining growth.

Balance Sheet

The balance sheet reflects a stable financial position with a manageable debt-to-equity ratio of 0.82 in the TTM period. The equity ratio remains healthy, indicating a solid asset base. Return on equity has decreased from 25.9% in 2024 to 18.2% in the TTM period, suggesting a decline in efficiency in generating returns for shareholders.

Cash Flow

Cash flow analysis reveals a strong free cash flow growth of 19.3% in the TTM period, indicating robust cash generation capabilities. The operating cash flow to net income ratio is 0.70, showing a good conversion of income to cash. However, the free cash flow to net income ratio is relatively low at 4.1%, suggesting potential reinvestment or capital expenditure needs.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	41.21B	36.15B	25.57B	22.06B	19.49B	17.80B
Gross Profit	14.55B	19.54B	9.52B	7.70B	6.69B	6.62B
EBITDA	14.69B	18.11B	8.96B	7.94B	6.16B	4.12B
Net Income	8.03B	9.58B	3.52B	3.12B	2.31B	973.32M
Balance Sheet
Total Assets	95.99B	80.97B	61.47B	57.21B	53.17B	50.42B
Cash, Cash Equivalents and Short-Term Investments	11.65B	5.38B	3.27B	3.55B	3.15B	3.81B
Total Debt	34.93B	25.26B	19.54B	18.96B	17.72B	17.26B
Total Liabilities	53.28B	44.04B	31.61B	29.87B	28.23B	27.62B
Stockholders Equity	42.71B	36.93B	29.86B	27.33B	24.93B	22.79B
Cash Flow
Free Cash Flow	10.08B	7.30B	4.71B	3.89B	3.86B	4.94B
Operating Cash Flow	10.12B	7.40B	4.85B	3.97B	3.91B	4.98B
Investing Cash Flow	-15.44B	-9.98B	-4.91B	-2.88B	-2.66B	-6.77B
Financing Cash Flow	7.90B	3.42B	-977.84M	60.30M	-929.02M	-66.35M

Companhia De Saneamento Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 24.52
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For SBS, the sentiment is Positive. The current price of 24.52 is above the 20-day moving average (MA) of 23.92, above the 50-day MA of 24.33, and above the 200-day MA of 21.17, indicating a bullish trend. The MACD of <0.01 indicates Negative momentum. The RSI at 54.34 is Neutral, neither overbought nor oversold. The STOCH value of 59.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SBS.

Companhia De Saneamento Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
AWK	73 Outperform	$25.23B	22.44	10.46%	2.51%	12.29%	13.13%
SBS	71 Outperform	$17.16B	14.00	16.99%	2.22%	-10.23%	-26.87%
AWR	70 Outperform	$2.82B	21.69	13.73%	2.64%	10.28%	13.56%
WTRG	66 Neutral	$10.89B	15.89	10.29%	3.48%	21.35%	20.96%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	65 Neutral	$2.60B	19.06	8.19%	2.88%	-2.60%	-33.78%
MSEX	59 Neutral	$934.86M	21.70	9.27%	2.67%	6.24%	3.35%

Companhia De Saneamento Corporate Events

Sabesp Approves R$1.8 Billion Interest on Equity and R$2.81 Billion Capital Increase

At a board meeting held on December 18, 2025, Sabesp’s directors unanimously approved the payment of R$1.798 billion in interest on equity to shareholders, reinforcing the company’s shareholder remuneration policy for the 2025 fiscal period. The board also approved a R$2.81 billion increase in capital stock via the capitalization of profit reserves, achieved through the issuance of 20,264,000 new common shares to existing shareholders at a ratio of 0.029646975 share per share held as of December 23, 2025, a move that strengthens Sabesp’s equity base while rewarding investors with additional shares and potentially improving the company’s financial flexibility and capital structure.

The most recent analyst rating on (SBS) stock is a Buy with a $29.00 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.

SABESP Announces 10.6% Rate Adjustment Amid Financial Rebalancing

On December 2, 2025, SABESP announced a rate adjustment authorized by ARSESP Resolution No. 1,748/2025, resulting in a 10.6% increase in the equilibrium rate. This adjustment is attributed to factors such as lag in RAB recognition, operational expenses, and inflation, among others. The average rate applied to users will see a 6.5% increase, incorporating inflation and tax adjustments. This change reflects SABESP’s efforts to balance financial sustainability with service delivery, impacting stakeholders by potentially altering service costs and company profitability.

The most recent analyst rating on (SBS) stock is a Buy with a $29.50 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.

SABESP Announces Rate Adjustment Following ARSESP Resolution

On December 2, 2025, SABESP announced that ARSESP Resolution No. 1,748/2025 has been published, allowing the company to implement an average rate adjustment of 6.5% for its services, effective January 1, 2026. This adjustment represents a 10.6% increase in the equilibrium rate, which is expected to impact the company’s financial performance and market positioning. SABESP has committed to providing further clarifications on the rate adjustment and will keep stakeholders informed of any developments.

The most recent analyst rating on (SBS) stock is a Buy with a $29.50 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.

SABESP’s Regulatory Asset Base Validated for 2023 and 2024

On November 24, 2025, SABESP announced the validation of its Regulatory Asset Base (RAB) for 2023 and 2024 by the São Paulo State Public Services Regulatory Agency. The RAB for 2023 was validated at R$78.5 billion, while the RAB for 2024 was set at R$88.0 billion. This validation reflects adjustments for factors such as asset revaluation and inflation, impacting the company’s financial planning and regulatory compliance. The announcement is significant for stakeholders as it provides clarity on SABESP’s asset valuation, which is crucial for future investment and operational strategies.

The most recent analyst rating on (SBS) stock is a Buy with a $29.50 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.

SABESP Reports Strong Asset Growth in Q3 2025

SABESP reported its financial results for the quarter ending September 30, 2025, showing a significant increase in total assets to 95.98 billion reais from 80.98 billion reais at the end of 2024. Despite a decrease in net income from the same period last year, the company maintained a strong financial position with a net income of 2.16 billion reais for the quarter. This financial performance reflects SABESP’s ongoing efforts to enhance its operational efficiency and market positioning, which are crucial for its stakeholders.

The most recent analyst rating on (SBS) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.

Sabesp Reports Strong Q3 2025 Performance with Record Investments

In its third-quarter 2025 earnings report, Sabesp announced an adjusted earnings per share of R$1.88, up from R$1.72 in the same period last year, driven by operational improvements and increased investments. The company invested R$4.0 billion in the quarter, the highest ever for a single period, to support its universalization goals, resulting in significant progress in expanding water and sewage connections. Despite a decrease in net income due to changes in customer mix and financial asset bifurcation impacts, Sabesp’s strategic focus on infrastructure and operational efficiency has reinforced its market position and commitment to social impact.

The most recent analyst rating on (SBS) stock is a Buy with a $26.00 price target. To see the full list of analyst forecasts on Companhia De Saneamento stock, see the SBS Stock Forecast page.