Companhia De Saneamento Basico Do Estado De Sao (SBS)
NYSE:SBS
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Companhia De Saneamento
(NYSE:SBS)
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Rating:68Neutral
Price Target:
$37.00
▲(9.86% Upside)
Action:DowngradedDate:03/19/26
The score is anchored by solid financial profitability but moderated by 2025 revenue/margin compression, higher leverage, and softer cash-flow conversion. Valuation is a clear positive (low P/E and ~4% yield), while technicals are neutral with longer-term trend support but limited near-term momentum.
Positive Factors
Strong Regulated Profitability
Sabesp's regulated margins (2025 net ~22%, EBIT ~32%) reflect durable earnings power from concession economics and scale. Strong profitability supports sustained cash generation, a healthy ROE (~20%), and the ability to fund reinvestment and distributions over the medium term.
Negative Factors
Top-line Weakness and Margin Compression
A ~9% revenue decline in 2025 and sharp gross margin compression reduce earnings resilience. If top‑line weakness persists or the customer mix remains more subsidized, margin erosion could undermine internal cash generation and raise dependence on external funding for capex.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong Regulated Profitability
Sabesp's regulated margins (2025 net ~22%, EBIT ~32%) reflect durable earnings power from concession economics and scale. Strong profitability supports sustained cash generation, a healthy ROE (~20%), and the ability to fund reinvestment and distributions over the medium term.
Read all positive factors
Companhia De Saneamento (SBS) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$24.05B
Dividend Yield2.22%
Average Volume (3M)1.46M
Price to Earnings (P/E)10.8
Beta (1Y)0.49
Revenue Growth-10.23%
EPS Growth-26.87%
CountryUS
Employees10,552
SectorUtilities
Sector Strength65
IndustryRegulated Water
Share Statistics
EPS (TTM)0.53
Shares Outstanding704,906,800
10 Day Avg. Volume933,873
30 Day Avg. Volume1,463,247
Financial Highlights & Ratios
PEG Ratio-0.79
Price to Book (P/B)2.11
Price to Sales (P/S)2.39
P/FCF Ratio11.27
Enterprise Value/Market Cap6.40
Enterprise Value/Revenue4.12
Enterprise Value/Gross Profit11.24
Enterprise Value/Ebitda10.83
Forecast
1Y Price Target
$36.60Price Target Upside8.67% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering1
EPS Forecast (FY)1.87
Revenue Forecast (FY)$4.86B
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 drainag...
How the Company Makes Money
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Companhia De Saneamento Earnings Call Summary
Earnings Call Date:Nov 11, 2024
(Q3-2024)
| % Change Since: |
Next Earnings Date:May 07, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there were positive developments in revenue and EBITDA growth, operational cash generation, and new strategic directions post-privatization, significant challenges remain. These include regulatory impacts, transition costs, and construction delays. The company is focused on overcoming these hurdles with a new management team and investment strategies.Positive Updates
Revenue and EBITDA Growth
Net revenue increased by 7%, and EBITDA grew by 17% driven by a 2% increase in volume and pricing adjustments.
Negative Updates
Impact of Regulatory Adjustments
Revenue impacted by regulatory adjustments, including a 1% tariff reduction post-privatization.
Read all updates
Q3-2024 Updates
Positive
Negative
Revenue and EBITDA Growth
Net revenue increased by 7%, and EBITDA grew by 17% driven by a 2% increase in volume and pricing adjustments.
Read all positive updates
Company Guidance
During the Q3 2024 earnings call for SBSP3.SA, the management team provided comprehensive guidance on several financial metrics and strategic initiatives. Daniel Szlak, the CFO, detailed a 7% increase in net revenue, translating into a 17% rise in EBITDA, driven by a 2% growth in volume and pricing adjustments. The company reported a gross revenue impact of approximately BRL 8.8 billion due to deferred revenue adjustments under IFRS 12. Operational cash generation stood at BRL 1.6 billion, reinvested into the asset base. The privatization transition incurred non-recurring costs, yet the company saw a 6.4% tariff readjustment, netting a positive effect of around 5%. Additionally, SABESP completed BRL 1.4 billion in investments this quarter, with expectations to reach BRL 6.5 to 7 billion by year-end, despite transitioning from public to private procurement processes. The call also highlighted the company's strategic focus on universal sanitation, cost control, and an efficient capital structure, aiming to leverage a planned BRL 60 billion investment over five years.Companhia De Saneamento Financial Statement Overview
Summary
Income Statement
74
Positive
Balance Sheet
62
Positive
Cash Flow
66
Positive
| Breakdown | Dec 2025 | Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 37.34B | 36.15B | 25.57B | 22.06B | 19.49B |
| Gross Profit | 13.68B | 19.54B | 9.52B | 7.70B | 6.69B |
| EBITDA | 14.20B | 18.11B | 8.96B | 7.94B | 6.16B |
| Net Income | 8.30B | 9.58B | 3.52B | 3.12B | 2.31B |
Balance Sheet | |||||
| Total Assets | 106.22B | 80.97B | 61.47B | 57.21B | 53.17B |
| Cash, Cash Equivalents and Short-Term Investments | 12.37B | 5.38B | 3.27B | 3.55B | 3.15B |
| Total Debt | 39.99B | 25.26B | 19.54B | 18.96B | 17.72B |
| Total Liabilities | 63.84B | 44.04B | 31.61B | 29.87B | 28.23B |
| Stockholders Equity | 42.38B | 36.93B | 29.86B | 27.33B | 24.93B |
Cash Flow | |||||
| Free Cash Flow | 7.93B | 7.30B | 4.71B | 3.89B | 3.86B |
| Operating Cash Flow | 8.21B | 7.40B | 4.85B | 3.97B | 3.91B |
| Investing Cash Flow | -15.41B | -9.98B | -4.91B | -2.88B | -2.66B |
| Financing Cash Flow | 10.12B | 3.42B | -977.84M | 60.30M | -929.02M |
Companhia De Saneamento Technical Analysis
Positive
33.68
Price Trends
29.25
Positive
26.82
Positive
24.20
Positive
Market Momentum
1.34
Negative
71.35
Negative
91.71
Negative
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 33.68 is above the 20-day moving average (MA) of 30.31, above the 50-day MA of 29.25, and above the 200-day MA of 24.20, indicating a bullish trend. The MACD of 1.34 indicates Negative momentum. The RSI at 71.35 is Negative, neither overbought nor oversold. The STOCH value of 91.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for SBS.
Companhia De Saneamento Risk Analysis
Companhia De Saneamento disclosed 39 risk factors in its most recent earnings report. Companhia De Saneamento reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Companhia De Saneamento Peers Comparison
UnderperformOutperform
Sector (66)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
71 Outperform | $11.52B | 17.43 | 9.18% | 3.48% | 21.35% | 20.96% | |
68 Neutral | $24.05B | 10.77 | 20.64% | 2.22% | -10.23% | -26.87% | |
67 Neutral | $1.03B | 26.96 | 9.08% | 2.67% | 6.24% | 3.35% | |
66 Neutral | $26.80B | 22.91 | 10.34% | 2.51% | 12.29% | 13.13% | |
66 Neutral | $17.65B | 18.10 | 5.60% | 3.62% | 6.62% | 11.55% | |
65 Neutral | $3.11B | 21.42 | 13.10% | 2.64% | 10.28% | 13.56% | |
58 Neutral | $2.80B | 20.13 | 7.68% | 2.88% | -2.60% | -33.78% |
* Utilities Sector Average
SBS
Companhia De Saneamento
33.68
16.64
97.65%
AWR
American States Water
75.44
-2.19
-2.81%
AWK
American Water
134.41
-8.87
-6.19%
WTRG
Essential Utilities
39.59
1.06
2.74%
CWT
California Water Service
45.11
-4.31
-8.71%
MSEX
Middlesex Water Company
51.95
-9.29
-15.18%
Companhia De Saneamento Corporate Events
Sabesp Proposes 1-for-5 Stock Split Ahead of April 28 Shareholder Vote
Mar 30, 2026
On March 27, 2026, Sabesp’s board approved submitting to shareholders a proposal for a stock split of all its common shares at a 1:5 ratio, to be voted on at an Extraordinary General Meeting scheduled for April 28, 2026. The split would incr...
SABESP Files 2025 Audited Financial Statements with SEC
Mar 17, 2026
Companhia de Saneamento Básico do Estado de São Paulo (SABESP) is a Brazilian basic sanitation utility that provides water supply, sewage collection and wastewater treatment services in the state of São Paulo. The company operates u...
Sabesp Boosts 2025 Earnings Quality and Doubles Capex to Advance Sanitation Expansion
Mar 17, 2026
For the year ended 2025, Sabesp reported earnings per share of R$12.37 versus R$14.02 in 2024, or R$10.90 versus R$6.00 when excluding financial asset effects, while adjusted 4Q25 EPS rose to R$3.93 from R$2.10 a year earlier. The utility stepped ...
Sabesp Buys Fund Holding Strategic EMAE Stake in R$171.6 Million Deal
Mar 16, 2026
On March 12, 2026, Sabesp announced it had signed an agreement to acquire 100% of the quotas of Oceania Fundo de Investimento em Ações from África Fundo de Investimento Multimercado Responsabilidade Limitada for R$171.6 million in c...
Sabesp Board Approves R$6.29 Billion Debenture Offering to Professional Investors
Feb 11, 2026
On February 10, 2026, Sabesp’s board of directors approved the company’s 38th issuance of simple, non-convertible, unsecured debentures, in up to five series, for a total of R$ 6.29 billion. The securities will be publicly distributed ...
Sabesp Doubles 2025 Investments to R$15.2 Billion and Surpasses Sanitation Expansion Targets
Feb 4, 2026
In 2025, Sabesp invested a preliminary, unaudited total of R$15.2 billion in water supply and sewage infrastructure, more than doubling the R$6.9 billion invested in 2024, with a marked acceleration in the second half of 2025. These investments en...
Sabesp Files Mandatory Tender Offer for Remaining EMAE Common Shares After Control Acquisition
Feb 2, 2026
On February 2, 2026, Sabesp announced that, following its January 21, 2026 closing of the acquisition of control of Empresa Metropolitana de Águas e Energia S.A. (EMAE), it has filed with the Brazilian Securities and Exchange Commission (CVM)...
Sabesp Moves to Acquire 90% Stake in Mirassol Water Concessionaire Sanessol
Jan 28, 2026
On January 27, 2026, Sabesp signed a share purchase agreement with Iguá Saneamento for the acquisition of common shares representing 90% of Sanessol S.A., the concessionaire responsible for public water and sewage services in Mirassol, Sã...
Sabesp Secures US$1.5 Billion Loan and Blue Bond Structure to Finance São Paulo Sanitation Expansion
Jan 28, 2026
On January 27, 2026, Sabesp announced that it had signed a US$1.5 billion loan agreement with the Inter-American Investment Corporation, split into a US$150 million A Loan maturing in 2038 and a US$1.35 billion B Loan with tranches maturing in 203...
Sabesp Closes R$682 Million Acquisition of Controlling Stake in EMAE
Jan 23, 2026
On January 21, 2026, Sabesp completed the acquisition of 11,009,550 common shares of Empresa Metropolitana de Águas e Energia (EMAE) from Vórtx Distribuidora de Títulos e Valores Mobiliários, representing about 74.9% of EMAE...
Sabesp Clears Key Antitrust and Regulatory Hurdles for EMAE Control Deal
Jan 21, 2026
On January 20, 2026, Sabesp announced that Brazil’s antitrust authority CADE unanimously rejected an appeal by Phoenix Água e Energia S.A., thereby confirming its prior decision to approve without restrictions Sabesp’s acquisition...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.