Essential Utilities (WTRG) AI Stock Analysis

• Market Cap: $11.23B
• Dividend Yield: 3.2%
• Average Volume (3M): 2.14M
• Price to Earnings (P/E): 16.5
• Beta (1Y): -0.07
• Revenue Growth: 21.35%
• EPS Growth: 20.96%
• Country: US
• Employees: 3,291
• Sector: Utilities
• Sector Strength: 65
• Industry: Regulated Water
• EPS (TTM): 0.33
• Shares Outstanding: 282,975,130
• 10 Day Avg. Volume: 2,851,556
• 30 Day Avg. Volume: 2,137,469
• 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: 1.71
• Enterprise Value/Revenue: 8.07
• Enterprise Value/Gross Profit: 13.54
• Enterprise Value/Ebitda: 14.14
• 1Y Price Target: $43.71
• Price Target Upside: 10.24% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 7
• EPS Forecast (FY): 2.12
• Revenue Forecast (FY): $2.35B

• Rating: 74 Outperform
• Price Target: $44.00 ▲(10.97% Upside)

Essential Utilities' strong financial performance and positive earnings call are key strengths, supported by reasonable valuation metrics. However, technical indicators suggest potential bearish momentum, and cash flow management remains a concern.

Positive Factors

Revenue Growth

The strong revenue growth indicates successful rate case outcomes and increased demand, supporting long-term financial stability and expansion.

Infrastructure Investment

Significant infrastructure investments ensure long-term service reliability and capacity expansion, enhancing competitive positioning.

Merger with American Water

The merger with American Water creates a leading utility with enhanced scale, operational efficiencies, and market reach, strengthening market position.

Negative Factors

Negative Free Cash Flow

Persistent negative free cash flow suggests cash management issues, which could limit future investment capacity and financial flexibility.

Regulatory Challenges

Regulatory hurdles could delay projects and impact revenue growth, posing risks to operational and financial performance.

Interest and Inflation Pressures

Rising interest and inflation rates increase operational costs, potentially squeezing margins and affecting long-term profitability.

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 profitability and operational efficiency, with solid revenue growth and margins. However, leverage remains a concern, and cash flow management requires attention due to persistent negative free cash flow.

Income Statement

Essential Utilities shows strong profitability with a consistent increase in gross profit margin and net profit margin over the years. The TTM data reflects a gross profit margin of 59.41% and a net profit margin of 27.62%, indicating efficient cost management and profitability. Revenue growth has been positive, with a 3.57% increase in the TTM period, although it has fluctuated in previous years. EBIT and EBITDA margins are robust, demonstrating strong operational performance.

Balance Sheet

The company's balance sheet reflects a moderate level of leverage with a debt-to-equity ratio of 1.16 in the TTM period, which is slightly improved from previous years. Return on equity is healthy at 10.11%, indicating effective use of equity to generate profits. The equity ratio is stable, suggesting a balanced capital structure, though the company should monitor its debt levels to maintain financial stability.

Cash Flow

Operating cash flow is strong, with a significant increase in the TTM period, resulting in a high operating cash flow to net income ratio of 1.53. However, the company faces challenges with negative free cash flow, which has been a consistent issue, indicating potential cash management concerns. The free cash flow to net income ratio is negative, highlighting the need for improved cash flow management.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	2.38B	2.09B	2.05B	2.29B	1.88B	1.46B
Gross Profit	1.42B	1.22B	1.13B	1.07B	987.30M	768.34M
EBITDA	1.36B	1.25B	1.06B	1.01B	927.66M	710.47M
Net Income	668.45M	595.31M	498.23M	465.24M	431.61M	284.85M
Balance Sheet
Total Assets	18.89B	18.03B	16.84B	15.72B	14.66B	13.71B
Cash, Cash Equivalents and Short-Term Investments	6.40M	9.16M	4.61M	11.40M	10.57M	4.83M
Total Debt	7.98B	7.73B	7.09B	6.84B	6.02B	5.73B
Total Liabilities	12.08B	11.83B	10.95B	10.34B	9.47B	9.02B
Stockholders Equity	6.82B	6.20B	5.90B	5.38B	5.18B	4.68B
Cash Flow
Free Cash Flow	-464.63M	-559.40M	-265.52M	-462.46M	-375.84M	-327.62M
Operating Cash Flow	952.18M	770.34M	933.59M	600.31M	644.68M	508.02M
Investing Cash Flow	-1.46B	-1.16B	-1.22B	-1.18B	-1.06B	-4.33B
Financing Cash Flow	504.94M	397.48M	281.36M	578.83M	417.12M	1.96B

Essential Utilities Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 39.65
• 50DMA: Positive
• 100DMA: Positive
• 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 Positive. The current price of 39.65 is below the 20-day moving average (MA) of 40.22, above the 50-day MA of 39.30, and above the 200-day MA of 38.11, indicating a neutral trend. The MACD of -0.13 indicates Positive momentum. The RSI at 49.42 is Neutral, neither overbought nor oversold. The STOCH value of 51.54 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for WTRG.

Essential Utilities Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SBS	74 Outperform	$17.41B	8.82	30.12%	2.14%	30.74%	143.94%
WTRG	74 Outperform	$11.23B	16.46	10.29%	3.20%	21.35%	20.96%
AWR	71 Outperform	$2.85B	21.95	13.73%	2.66%	10.28%	13.56%
HTO	67 Neutral	$1.69B	15.04	7.65%	1.70%	11.39%	13.86%
Sector *	66 Neutral	$17.65B	18.10	5.60%	3.62%	6.62%	11.55%
CWT	66 Neutral	$2.77B	20.33	8.19%	2.57%	-2.60%	-33.78%
AWK	65 Neutral	$25.56B	22.96	10.46%	2.36%	12.29%	13.13%

Essential Utilities Corporate Events

Essential Utilities Merges with American Water Works

On October 26, 2025, Essential Utilities, Inc. and American Water Works Company, Inc. entered into an Agreement and Plan of Merger, with Essential becoming a wholly owned subsidiary of American Water. The merger, unanimously approved by both companies’ boards, aims to create a leading U.S. water and wastewater utility with a combined market capitalization of approximately $40 billion. This strategic move is expected to enhance operational efficiency, expand customer reach, and provide long-term growth opportunities for employees while maintaining commitments to community support and water affordability. The merger is also anticipated to be accretive to American Water’s earnings per share in the first year post-transaction, supporting long-term growth targets for earnings and dividends.

The most recent analyst rating on (WTRG) stock is a Buy with a $43.00 price target. To see the full list of analyst forecasts on Essential Utilities stock, see the WTRG Stock Forecast page.

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.

Essential Utilities Reports Robust Q2 2025 Performance

Essential Utilities, Inc. is a major publicly traded provider of water, wastewater, and natural gas services in the United States, focusing on sustainable growth and operational excellence. In the second quarter of 2025, Essential Utilities reported strong financial performance with earnings per share rising to $0.38 from $0.28 in the same period last year, driven by increased rates and revenue growth across its business segments. The company also raised its quarterly dividend by 5.25% and invested significantly in infrastructure, including a notable acquisition of the Beaver Falls Wastewater System. Key financial metrics showed a revenue increase of 18.5% to $514.9 million, with net income climbing to $107.8 million. The company continues to expand its footprint through acquisitions and infrastructure investments, planning to invest $7.8 billion through 2029 to enhance its water and gas systems. Looking ahead, Essential Utilities aims to surpass its earnings guidance for 2025 and maintain a strong growth trajectory, supported by strategic investments and acquisitions.

Essential Utilities, Inc. Reports Strong Earnings Growth

Essential Utilities, Inc. Reports Strong Earnings Growth Amid Operational and Economic Challenges