Companhia De Saneamento (SBS) AI Stock Analysis

• Market Cap: $18.24B
• Dividend Yield: 2.03%
• Average Volume (3M): 933.14K
• Price to Earnings (P/E): 14.3
• Beta (1Y): 0.46
• Revenue Growth: -10.23%
• EPS Growth: -26.87%
• Country: US
• Employees: 10,552
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.60
• Shares Outstanding: 683,509,900
• 10 Day Avg. Volume: 1,124,720
• 30 Day Avg. Volume: 933,142
• 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: 1.17
• Enterprise Value/Revenue: 0.52
• Enterprise Value/Gross Profit: 1.47
• Enterprise Value/Ebitda: 1.46
• 1Y Price Target: N/A
• Price Target Upside: N/A
• 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 ▲(19.74% 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 (SBS) is a leading utility company specializing in water and wastewater management services. Operating primarily in the sanitation sector, SBS offers a range of services including the treatment, distribution, and supply of potable water, as well as the collection and treatment of sewage. The company is committed to enhancing public health and environmental sustainability through innovative solutions and infrastructure development.

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 with a high EBIT margin and robust net profit margin. The company efficiently utilizes equity, as indicated by a strong ROE. However, a decline in revenue growth poses potential challenges.

Income Statement

Companhia De Saneamento shows strong profitability with a high EBIT margin of 45.46% and a net profit margin of 27.76% in the TTM. However, the revenue growth rate has declined by 11.91% in the TTM, indicating potential challenges in maintaining revenue levels.

Balance Sheet

The company maintains a moderate debt-to-equity ratio of 0.77, suggesting a balanced approach to leveraging. The return on equity is robust at 29.06%, indicating efficient use of equity to generate profits. However, the equity ratio is not explicitly provided, which limits a full assessment of asset financing.

Cash Flow

The cash flow statement reflects strong cash generation with a free cash flow growth rate of 19.28% in the TTM. The operating cash flow to net income ratio is healthy at 0.81, showing good cash conversion. The free cash flow to net income ratio is 0.30, indicating room for improvement in converting net income to free cash flow.

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: 24.22
• 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 24.22 is below the 20-day moving average (MA) of 25.95, below the 50-day MA of 24.79, and above the 200-day MA of 21.15, indicating a bullish trend. The MACD of 0.48 indicates Negative momentum. The RSI at 64.41 is Neutral, neither overbought nor oversold. The STOCH value of 78.74 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
AWR	73 Outperform	$2.82B	21.60	13.73%	2.64%	10.28%	13.56%
WTRG	72 Outperform	$11.14B	16.33	10.29%	3.44%	21.35%	20.96%
SBS	71 Outperform	$18.24B	14.32	16.99%	2.03%	-10.23%	-26.87%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	66 Neutral	$2.69B	19.76	8.19%	2.74%	-2.60%	-33.78%
AWK	65 Neutral	$25.56B	22.97	10.46%	2.48%	12.29%	13.13%
MSEX	55 Neutral	$939.81M	21.51	9.27%	2.69%	6.24%	3.35%

Companhia De Saneamento Corporate Events

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.

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.

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.

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.

SABESP Acquires Majority Stake in EMAE to Boost Water and Energy Integration

On October 5, 2025, SABESP announced the acquisition of a significant stake in EMAE, acquiring 74.9% of common shares and 66.8% of preferred shares. This strategic move, subject to regulatory approval, will allow SABESP to control 70.1% of EMAE’s total share capital. The acquisition is expected to enhance SABESP’s water management capabilities and integrate EMAE’s power generation assets, supporting financial stability and sustainable value creation. This development strengthens SABESP’s position in addressing climate change challenges and meeting the growing demand for essential services.