Essential Utilities (WTRG) AI Stock Analysis

• Market Cap: $10.39B
• Dividend Yield: 3.49%
• Average Volume (3M): 2.06M
• Price to Earnings (P/E): 15.8
• Beta (1Y): 0.09
• Revenue Growth: 20.70%
• EPS Growth: 14.59%
• Country: US
• Employees: 3,291
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.38
• Shares Outstanding: 280,468,660
• 10 Day Avg. Volume: 2,300,155
• 30 Day Avg. Volume: 2,059,546
• PEG Ratio: 1.00
• Price to Book (P/B): 1.60
• Price to Sales (P/S): 4.77
• P/FCF Ratio: -17.78
• Enterprise Value/Market Cap: 1.75
• Enterprise Value/Revenue: 7.78
• Enterprise Value/Gross Profit: 13.10
• Enterprise Value/Ebitda: 13.72
• 1Y Price Target: $45.33
• Price Target Upside: 19.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 3

• Rating: 69 Neutral
• Price Target: $42.00 ▲(11.11% Upside)

Essential Utilities' strong financial performance and positive earnings call are key strengths, supported by robust profitability and strategic investments. However, technical indicators suggest a neutral trend, and cash flow management remains a concern. The valuation is reasonable, with a solid dividend yield providing additional investor appeal.

Positive Factors

Revenue Growth

Strong revenue growth driven by favorable rate outcomes and cost management indicates robust market demand and effective pricing strategies, supporting long-term financial health.

Infrastructure Investment

Significant infrastructure investment underscores the company's commitment to long-term growth and service reliability, enhancing competitive positioning in the utility sector.

Dividend Growth

Consistent dividend growth reflects strong cash generation and management's confidence in future earnings, appealing to income-focused investors and supporting stock stability.

Negative Factors

Cash Flow Management

Persistent negative free cash flow indicates potential cash management issues, which could limit the company's ability to fund operations and investments without external financing.

Regulatory Challenges

Regulatory hurdles and project delays can impact operational efficiency and growth, posing risks to revenue stability and strategic initiatives in key regions.

Interest and Inflation Pressures

Rising interest rates and inflationary pressures can increase operational costs and reduce profit margins, challenging the company's ability to maintain cost efficiency.

Essential Utilities Business Overview & Revenue Model

Company Description

Essential Utilities, Inc., through its subsidiaries, operates regulated utilities that provide water, wastewater, or natural gas services in the United States. It offers water services through operating and maintenance contract with municipal authorities and other parties. The company also provides non-utility raw water supply services for firms in the natural gas drilling industry; and water and sewer line protection solutions, and repair services to households through a third-party. It serves approximately 7.5 million residential water, commercial water, fire protection, industrial water, wastewater, and other water and utility customers in Pennsylvania, Ohio, Texas, Illinois, North Carolina, New Jersey, Indiana, Virginia, West Virginia, and Kentucky under the Aqua and Peoples brands. The company was formerly known as Aqua America, Inc. and changed its name to Essential Utilities, Inc. in February 2020. Essential Utilities, Inc. was founded in 1886 and is headquartered in Bryn Mawr, Pennsylvania.

How the Company Makes Money

Essential Utilities generates revenue primarily through the sale of water and natural gas services to its customers. The company earns money by charging customers for the consumption of water and natural gas, which is regulated by state public utility commissions. Key revenue streams include monthly billing for residential and commercial services, as well as capital recovery through infrastructure investments. Additionally, Essential Utilities benefits from rate increases approved by regulatory bodies, which allow the company to recoup costs associated with maintaining and upgrading its systems. Significant partnerships with local governments and municipalities also contribute to its earnings, as these agreements often include long-term contracts for service provision.

Essential Utilities Financial Statement Overview

Summary

Essential Utilities demonstrates strong growth and profitability with robust revenue increases and efficient operations. However, high leverage and negative Free Cash Flow present potential risks. Overall, the company is well-positioned for growth, but careful management of capital expenditures and debt levels is crucial for financial stability.

Income Statement

Essential Utilities shows strong financial performance with consistent revenue growth and improving margins. The TTM (Trailing-Twelve-Months) Gross Profit Margin stands at 59.24%, and Net Profit Margin at 27.16%, reflecting efficient cost management. Revenue has grown by 8.21% from the previous annual period, indicating a positive growth trajectory. The EBIT and EBITDA Margins are robust at 38.36% and 56.34%, respectively, showcasing operational efficiency. However, some volatility in revenue from 2022 to 2023 warrants attention.

Balance Sheet

The balance sheet represents a stable financial position with a Debt-to-Equity Ratio of 1.20, which is manageable within the industry context. The Return on Equity (ROE) is strong at 9.49%, demonstrating efficient use of equity capital. The Equity Ratio of 35.25% indicates a solid equity base, albeit with high leverage. The company's asset base is growing, supporting its long-term stability.

Cash Flow

Cash flow analysis shows a mixed picture with a Free Cash Flow to Net Income Ratio of -0.84 in the TTM period, indicating significant capital expenditures. Operating Cash Flow to Net Income Ratio is 1.35, suggesting good cash generation from operations. However, negative Free Cash Flow points to potential liquidity challenges if capital investments do not translate into future growth.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.34B	2.09B	2.05B	2.29B	1.88B	1.46B
Gross Profit	1.39B	1.22B	1.13B	1.07B	987.30M	768.34M
EBITDA	1.33B	1.25B	1.06B	1.01B	927.66M	710.47M
Net Income	645.77M	595.31M	498.23M	465.24M	431.61M	284.85M
Balance Sheet
Total Assets	18.55B	18.03B	16.84B	15.72B	14.66B	13.71B
Cash, Cash Equivalents and Short-Term Investments	25.07M	9.16M	4.61M	11.40M	10.57M	4.83M
Total Debt	7.77B	7.73B	7.09B	6.84B	6.02B	5.73B
Total Liabilities	11.83B	11.83B	10.95B	10.34B	9.47B	9.02B
Stockholders Equity	6.72B	6.20B	5.90B	5.38B	5.18B	4.68B
Cash Flow
Free Cash Flow	-477.76M	-559.40M	-265.52M	-462.46M	-375.84M	-327.62M
Operating Cash Flow	915.75M	770.34M	933.59M	600.31M	644.68M	508.02M
Investing Cash Flow	-1.41B	-1.16B	-1.22B	-1.18B	-1.06B	-4.33B
Financing Cash Flow	504.50M	397.48M	281.36M	578.83M	417.12M	1.96B

Essential Utilities Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 37.80
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For WTRG, the sentiment is Neutral. The current price of 37.8 is below the 20-day moving average (MA) of 38.25, below the 50-day MA of 38.09, and above the 200-day MA of 37.37, indicating a neutral trend. The MACD of -0.32 indicates Positive momentum. The RSI at 46.86 is Neutral, neither overbought nor oversold. The STOCH value of 39.66 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for WTRG.

Essential Utilities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SBS	76 Outperform	16.81B	8.64	25.94%	2.18%	30.74%	143.94%
WTRG	69 Neutral	$10.39B	15.84	10.02%	3.49%	20.70%	14.59%
CWT	69 Neutral	2.73B	19.96	8.20%	2.67%	0.62%	-24.24%
HTO	68 Neutral	1.71B	15.98	7.01%	1.73%	12.40%	11.98%
AWR	66 Neutral	2.77B	22.05	12.82%	2.65%	8.55%	13.57%
AWK	66 Neutral	27.57B	24.70	10.14%	2.33%	13.37%	13.29%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%

Essential Utilities Corporate Events

Essential Utilities Invests in Pennsylvania Data Center Project

On August 27, 2025, Essential Utilities announced its investment in a 1,400-acre data center project in Greene County, Pennsylvania, through its subsidiary Aqua Infrastructure, LLC. The project will include the construction of an 18 MGD water treatment plant and will be powered by natural gas combined cycle combustion turbines, supplemented by battery storage. Essential’s subsidiary Peoples Natural Gas will provide consulting and energy management services. This initiative aligns with Pennsylvania’s favorable business climate for energy and AI projects and underscores Essential’s commitment to innovation and regional economic development.

The most recent analyst rating on (WTRG) stock is a Buy with a $44.00 price target. To see the full list of analyst forecasts on Essential Utilities stock, see the WTRG Stock Forecast page.

Essential Utilities Issues $500M Senior Notes Offering

On August 7, 2025, Essential Utilities, Inc. issued $500 million in 5.250% Senior Notes due 2035, under an indenture agreement with U.S. Bank Trust Company, National Association. The notes, which will mature on August 15, 2035, were part of a registered public offering and include terms for early redemption and events of default. The offering, closed on the same date, was underwritten by BofA Securities, Wells Fargo Securities, and Huntington Securities, with the company agreeing to indemnify the underwriters against certain liabilities.

The most recent analyst rating on (WTRG) stock is a Buy with a $46.00 price target. To see the full list of analyst forecasts on Essential Utilities stock, see the WTRG Stock Forecast page.